Implications of accessing your super early. Accessing your super early will affect your super balance and may affect your future retirement income. If you withdraw super due to severe financial hardship it is taxed as a super lump sum. The minimum amount that can be withdrawn is $0and the maximum amount is $1000.
If your super balance is less than $0you can withdraw up to your remaining balance after tax. You can only make one withdrawal in any 12-month period. The latest APRA figures show there have been around 2. The premise of superannuation fund works on the power of compounding. The higher your super balance, the higher the earnings and investment growth.
An early withdrawal from your super can therefore result in a loss of potential earnings from compounding growth in the long term. Those caught will have the withdrawal amount added to their taxable income, netting the ATO up to of the dollar figure, and penalties up to $1000. The recontributions would be capped at the amount withdrawn under the scheme. Suzi is years old and applies to withdraw some super on compassionate grounds.
Suzi receives a lump sum super benefit of $1000. Her fund tells her this consists of $0tax-free and $10taxable super. The entire taxable super was taxed in the fund.
Withdrawing and using your super. (more…)