I’m fearful that my contents insurance claim will not fully cover the replacement cost of all the appliances I lost in the recent QLD floods. Am I able to access my super to help pay for new appliances?
- Jamie in Ipswich, QLD
Top answer provided by:
Robert Goudie
Hi Jamie, you have raised a timely question given the current devastation within the country’s northern states.
Gaining early access to your super funds is a complex and rather strict process. In short, it is unlikely a short-term solution, but this of course is dependent on several factors, particularly your age. There is a very specific criteria individuals need to meet in order to access their super early, which are being of preservation age, experiencing severe financial hardship or enduring difficult personal situations which may allow for early access on compassionate grounds. However, there are always options and support available to help get you and your family back on your feet.
‘Preservation age’ is the age in which you can begin to access your super benefits, which is between 55 and 60, depending on your date of birth. If you do not meet the preservation age, there are a few other circumstances where you can access your super early.
‘Incapacity’— if you are not able to work or are forced to work less hours as a result of a medical condition, you may access your super.
‘Terminal medical condition’ — if you are experiencing illness or injury that is likely to result in your death.
‘Severe financial hardship’ allows you to withdraw within $1,000 and 10,000 from your super. In order to access this, you must have been both receiving government support payments for at least 26 consecutive weeks and are not able to meet immediate family living expenses.
Similarly, to gain access to your super on ‘compassionate grounds’, you must need the money to cover expenses such as,
- medical transport or treatment for yourself or you dependent
- to cover a home loan or council rate to ensure you don’t lose your home
- to make changes to your home/vehicle in order to allow for the severe disability of you or your dependent
- palliative care for yourself or your dependent
- payments required for the death, funeral arrangements or burial for your dependent.
As you can gather, there are limited circumstances that allow you to take money out of your super early. This leaves us with a few options to explore if your contents insurance does not cover what you need it to.
The ‘Disaster Recovery Payment’ is a one-off payment of $1,000 per adult and $400 per child in households of severe flood affected areas of Queensland and New South Wales. You can access this by calling Services Australia’s Disaster Assistance (180 22 66) or lodge a claim through myGov.
‘Essential Items Grant’, which may be relevant to your circumstances, aids specifically to replace essential items in the household that have been lost or damaged in a disaster. This can be up to $1,765 for adults and $5,300 for families.
This article from The Sydney Morning Herald may help you navigate and explore your different options in obtaining financial aid to help your recovery post the floods.
In a nutshell, it may be in your best interests to first explore the grants available to Queensland residents before reaching for your super, particularly since it is not such a breezy process.
While the Adviser Ratings Website facilitates the question and answer functionality, all such communications are between users and authorised financial advisers, of which Adviser Ratings has no affiliation. Adviser Ratings is not the advice provider and does not provide financial product advice and only provides information that is general in nature.
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