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Financial Hardship & Your Super

Using Your Nest Egg to Pay Off Bad Debt

Accessing your Super during Financial Hardship

When you hit hard financial times you might be tempted to access your super fund early to help relieve the pressure.

There are certain circumstances under which you can access your Super Fund early.  If you are struggling with medical expenses or face losing your house, you might be able to access your Super.

Some Super Funds will even release a percentage of your super early if you are in severe financial hardship.

But is your current financial situation worth sacrificing a chunk of your retirement plan?

If you use your Super to get out of financial hardship now, you might leave yourself short and end up facing financial hardship again at a time when you can’t afford to get out of it.

There are a number of options available to you right now to help you pay off your debt so you don’t have to dip into your retirement plan.

This article takes a look at how and if you should access your Super early to help with debt.

We also provide you with alternative solutions to financial hardship.

What is Superannuation?


Superannuation is a way for you to save for your retirement. Your Super Fund is set up when you get your first job and your employer will pay contributions to your Super throughout your career.

When you retire, you will have a reasonable financial fund to rely on. You can also make your own contributions to your Super. Depending on your Super Fund, a percentage of your savings might be invested in stocks, in the hope your investments will bring back a higher return and boost your fund.

In Australia, you cannot access your Super before you are 55 years of age. However, each fund may allow you to access your Super early through special concessions.

Early Release of Superannuation

There are hundreds of Superannuation Funds and each of them has their own rules when it comes to releasing super funds early. There are a number of specified compassionate grounds which you can apply to access your Super early.

Specified Compassionate Grounds:


Medical Treatment

To pay for medical or dental treatment for yourself or a dependant. This can also include paying for the transport to the treatment.

Disability Care

To modify your home or vehicle to accommodate a severe disability for yourself or a dependent.

Palliative Care

To pay for palliative care if yourself or a dependent has a terminal medical condition and
expenses associated with the death, funeral or burial of a dependent.

Save Your Home

To prevent your home from being sold by the lender that holds the mortgage.

These specified compassionate grounds may be of assistance when your financial hardship is caused by illness or injury in yourself or a dependent. In addition to these compassionate grounds, some Super Funds might allow you to access your super early in cases of severe financial hardship.

Severe Financial Hardship and your Super

Seek Professional Advice

Depending on your Super Fund, you can apply for early release of your super on the grounds of severe financial hardship.

Not all Superannuation Funds allow you to access your Super early on the grounds of Severe Financial Hardship.

Even if it does, you should pursue all other avenues first and only attempt to access your Super if advised by a Financial Counsellor.

Things to Consider:

  • The early release of superannuation may impact the benefits you receive through Family Tax Benefit, Child Care Benefit or an income support payment, among others.
  • Your Super Fund might charge you fees to release the money early.
  • The money you receive as an early release of your super may be taxed.
  • You might struggle closer to retirement with depleted Superannuation Savings

Applying for early release of your Super


If you are struggling with severe financial hardship and a Financial Counsellor has recommended you try to access your Super early, you need to contact your Super Fund.

Each Fund will have a different procedure to access your Super early. Many of them will ask for a supporting letter from the Department of Human Services as well as ask you to complete forms and sign agreements.

You may need to provide supporting documentation to prove your state of affairs

Alternative Debt Relief Solutions

If it is unrealistic or impossible for you to access your Super early to relieve your debt stress, there are a number of alternative debt relief solutions.  To discuss your options with an expert, you can call Debt Rescue on 1800 00 3328. They will go through your situation and inform you of your options.  You might find there is a simpler way to get out of debt without having to rely on your retirement plan.

Debt Consolidation

Don’t let your debts get out of control, we can help consolidate your debts into one, easy-to-manage repayment. With the help of our affiliate lending partner, we can bring all your debts together into one loan, leaving you with one set of interest and fees.

Debt Agreement

A Part 9 Debt Agreement is a way of reducing your debts, so they are affordable. It is a government legislated agreement outlining a new payment arrangement between you and your creditors. You only pay a fraction of each dollar owed.

Informal Agreement

Informal Agreements are new repayment arrangements for your debts which have been negotiated privately with your creditors. Informal Agreements can be used where you may not qualify for a Part 9 Debt Agreement.


Bankruptcy eliminates your debt and allows you to start fresh. It puts an end to harassing phone calls from your creditors and removes the stress and worry of finding money you don’t have to try to pay off your debt. It’s used as a last resort to get rid of debt.

“Phoning  Debt Rescue  was the best thing we did, everyone is so helpful, guiding people through every stage. Debt Rescue cares for the people who seek their help as they put it to us ‘you will be able to live a decent standard of life again without the hounding of creditors’ and they were correct!”

About Debt Rescue

Debt Rescue has helped tens of thousands of Aussies overcome severe financial hardship  since 2005. We are an Australian owned and operated company and pride ourselves  on providing a caring and customer focused solution to debt relief.

Our Case Managers have decades of financial experience.   We can tailor debt relief strategies for anyone struggling with debt and help them get back on track.

Why We Care

Not enough is being done to tackle the issue of personal debt at its core. It is one thing to provide a range of services to help people pay off their debt, it is another to ensure people are educated and armed with the skills required to live a debt-free life.

Debt Rescue has teamed up with the  SunnyKids Charity to do just that! We help families tackle their debt issues head on so they can focus on providing a safe and nurturing environment for their children to grow.

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