I'm a 40 year old single female (one 16 year old child) who has just been medically retired and have an ongoing compensable claim through Comcare. I don't plan on suing for common law, but will apply for permanent incapacity. I have a 300k mortgage and only $120k in super. My mortgage is now extremely hard to pay due to the compensation payments not being as much as my salary was. I have been told I will pay approximately 40k in taxes to get my super early. But I need to lower my mortgage payments. Is there any other way around this? I don't have perm incapacity insurance with my super fund (Hesta). I'm not entitled to any Centrelink payments either.
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It sounds like you have had a lot going on in life at the moment. Clients of mine who have been through the Comcare claims process have commented it is often not a smooth one. Hope you are holding together okay and have a good support team around you.
Unfortunately your situation is a great lesson for others around why having an appropriate back up plan in place is important. There is never be enough money if the worst happens but it is about having some level of choice. Holding insurance policies for total permanent disability and income protection can provide a source of asset or income if the worst happens. Having your Wills and Enduring Power of Attorney in place builds a strategy to navigate these risks in life.
My suggestion would be to ensure you stay on the front foot with your mortgage provider and keep them informed of your situation. If you can speak to them about options to stop or reduce your repayments in the short term this will give you time to take stock to build a framework to move forward with things.
If keeping your home is important to you, it will be all about mapping out what is possible and realistic based on your future capacity for income and debt reduction. Have a think about what other options you may have in life to generate income in the background to help supplement things. Using the collaborative economy through ‘Uber’ or ‘AirBnB’ could help in the short term.
Superannuation can only be accesses once you trigger a ‘condition of release’. As you mention 'permanent incapacity' is one of those events which allow you access to your super benefits if you meet the requirements.
There is a funky tax calculation which your super fund will do based on service years and potential age to retirement which provides an increased ‘tax free element’. Based on your age, as you are under preservation age, there will be tax payable. I always suggest you get a second opinion on the tax calculation just to check this is correct. Based on your current mortgage, every dollar will count!
You have mentioned a super fund with HESTA. I would also suggest you check out the super seeker feature at www.my.gov.au. You may have some lost super accounts with some basic insurance cover in place. Either may help to boost your asset position.
In a situation like yours it is always my suggestion that you check eligibility for Centrelink Payments. You should also check any services or funding you could receive via the National Disability Insurance Scheme (NDIS), again pending any eligibility requirements.
Make sure you have the right support team around you. Getting quality advice is all about giving yourself as much choice as possible and unpacking the things you don’t know which may be available. The one guarantee in life is unfortunately things will happen that are outside of our control!
Scott Malcolm has been awarded the internationally recognised Certified Financial Planner designation from the Financial Planning Association of Australia and is Director of Money Mechanics. Money Mechanics is a fee for service financial advice firm who partner with clients in Melbourne, Canberra and Sydney to achieve their life and wealth outcomes. We are authorised to provide financial advice through PATRON Financial Advice AFSL 307379.
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