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Melly1987

Early superannuation release

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Hi all! 

I am new here, on behalf of my husband. 

I am about to send all of the quotes for his surgery to human services, for early release of his super annuation.

Once they're sent, what happens next?. Is his superannuation automatically released once approved, or do we have to contact his super annuation fund?. I am so confused. Scared of buggering it all up. 

The obesity clinic gave hardly any information. I have had to figure it all out myself. Any pointers would be most helpful. 

Thank you ❤

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Sorry, yes. Private health insurance. No, we are under pressure financially and unable to pay for private health insurance at this time. We've been considering it for years. With all of our other insurances, utility bills and such. It just isn't an option. Every cent is accounted for.  

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If its approved they'll send you a letter confirming that, which you then forward to the super fund with an application to withdraw that amount. Keep in mind you're asking for a specific amount but what is withdrawn needs to include tax so it'll be an additional 22% on top of what you're asking for, and if you're on any kind of government benefits you need to declare the super as income at tax time :) 

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Thank you!. 

We aren't on any benefits. However, we do receive family tax. Would the super for tax reasons,  need to be claimed because of that?. 

 

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It may not affect your benefit come tax time, its just something to be mindful of in that it always has to be declared as income :) they tax it correctly when they deduct it so you shouldn't owe anything, but if it puts you into the next tax bracket for income where you might miss entitlements its good to be aware

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I am about to send everything off. His firms from his doctors are done, also the quotes, all printed. But since you say they take 22% for tax, how to I add extra to assure we have the correct amount in the end. I estimated we could be taxed 6,000$. I phoned around, no one has information. I expected more help from obesity surgeries, regarding what to do exactly. But I just can't find firm information.  Seems to have worked differently for everybody.  

 

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Edited: Deleted incorrect calculation.  Refer below

There is another issue that you may need to be aware of...that the amount of super withdrawn is also included in assesseble income at tax return time.  Now while 22% tax has already been paid, if the super amount takes the asessable income into the next tax bracket there will likely be extra tax to pay (oops I see that was already covered above).

One thing I am not clear on is whether even if the next tax bracket doesn't come into play at tax return time, whether any additional tax is taken regardless of the 22% paid to bring the tax up to your tax margin, but I am thinking it isn't - but this will be clarified for you if the application is approved, I understand that all this information is provided to you in the letter of authorisation.

Note that from 1 July the ATO is going to be taking over the assessment of early release of super on compassionate grounds (this includes medical expenses).

If you need any  more help with grossing up the expenses, private message me if you like.

 

 

Edited by CarolC

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When I accessed my super, I was able to fill in a box that was the ‘net amount’ I wanted (ie after tax) and then they worked out the rest. I went through qsuper though, not sure if your super company will do the same? 

 

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I have messaged Melly, but for anyone else I realised that I put the wrong calculation on the thread.  What it should if you need $15000 after tax is to divide 15000 by 0.78 which gives 19230.77.  Then if you multiply that by 0.22 the tax is 4230.77 leaving $15000.

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Hey Melly, did you lodge your early release application before the cut off date with centrelink?  I lodged a few days before the cut off (I was undecided whether I would go through with the early release application due to the overall taxation issue so dithering).  I then went to cancel the application after the cut off date but it was no longer available on mygov website under centrelink.  I remember a note saying that any applications received before the cut off but undetermined would not be assessed by centrelink/human services.  So I thought no need to cancel and forgot all about it.

To my surprise today I received a phone call from department of human services saying my application was approved!

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Even though I was in two minds about using super because of the tax, once it was approved, I decided to go ahead with the early release, funds hit my bank account Friday just gone.  For the $12,000 received - $15,384 was deducted from my super.  I am partially self funding the rest, I did have a loan aproved for the procedure but will not draw down on it now.  I am amazed, how quickly it was all processed.  To cover off on the extra tax payable I will have my employer deduct extra tax each pay.

Good luck to anyone considering applying for early release of super, remember now its with the ATO not via centrelink.

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