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COVID-19 Early Access to Super - FREE

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PRODUCT INFORMATION

FREE FOR ADVISORS

To assist advisors and their clients during this time, Topdocs will be providing this package free of charge to members of the financial services and legal industries.

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EARLY ACCESS TO SUPER AS A RESULT OF COVID-19

The Topdocs COVID-19 Early Access package can be used with any trust deed, not just the Topdocs trust deed, as long as the deed has the requisite early access to superannuation provisions.

The Topdocs COVID-19 Early Access package can be used with any trust deed, not just the Topdocs trust deed, as long as the deed provides the ability for the trustees to provide early release of superannuation benefits to members on compassionate grounds.

Our order form is fully integrated with BGL Simple Fund 360, Class and SuperMate to make the ordering process quick and easy.

download Review the COVID-19 Early Access order checklist download See the list of documents you will receive

ELIGIBILITY TO ACCESS SUPERANNUATION EARLY

A member must meet certain eligibility criteria in order to access their superannuation prior to them reaching preservation age, and in relation to the release of superannuation as a result of the COVID-19 pandemic, a member will be eligible to apply to the Australian Taxation Office (ATO) to access their superannuation early if they:

  • are unemployed; or
  • are eligible to receive from Centrelink:
    • jobseeker payment
    • parenting payment;
    • special benefit;
    • youth allowance (unless a full time student or new apprentice);
    • farm household allowance; or
  • on or after 1 January 2020:
    • were made redundant, or
    • had their working hours reduced by 20% or more; or
    • being a sole trader, suffered:
      • a business suspension; or
      • a reduction in turnover of 20% or more.

A member may make 2 applications for early release of superannuation benefits, each for a maximum of $10,000.00 as follows:

  • one in the financial year to 30 June 2020; and
  • one in the 2020/21 financial year although the application must be made before 24 September 2020.

An eligible member, prior to requesting a superannuation benefit up to the $10,000.00 limit from their Fund, must make an application to the ATO. If the ATO approves the application, the member will be provided with a determination from the Tax Office confirming the authority for the member to access the benefit.

Where the member’s Fund is an SMSF, this determination should be provided to the trustee of the Fund, along with a request by the member for the benefit amount. Upon receipt of the application, the trustee should confirm acceptance of the application and provide the benefit under the terms of the application. The latter two actions are documented by our COVID-19 Early Access package.

You can read more about applying for early release of superannuation benefits as a result of the COVID-19 pandemic via our article below:

COVID-19 Early Access to Superannuation – SMSF Trustee Considerations

WHY ORDER A TOPDOCS COVID-19 EARLY ACCESS TO SUPER PACKAGE?

  • The documents can be used with any trust deed that permits early release of superannuation on compassionate grounds
  • Your package includes the request for the member to access the superannuation benefit, and the trustee confirmation and resolution confirming their actioning of the request, based on a positive determination from the ATO
  • Access to the package is free for advisors

MORE INFORMATION

You can learn more about the Topdocs COVID-19 Early Access documentation in the RELATED INFORMATION tab.

Should you have any queries or require more information, please call the team at Topdocs on 1300 659 242.

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Should you have any queries or require more information, please call the team at Topdocs on 1300 659 242.

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adviser pricing ^ Adviser pricing is available to accountants, financial planners, SMSF specialists and legal practitioners. This pricing is automatically applied when you join Topdocs and sign into the Document Portal to order your documents.

YOUR DELIVERY OPTIONS

This package is only available as instant email delivery.

Should you have any queries or require more information, please call the team at Topdocs on 1300 659 242.

RELATED INFORMATION

MORE INFORMATION

Outlined below is additional information relating to the document you have chosen.

COVID-19 Early Access to Superannuation – Trustee Considerations ... [more]

Much has been written about the ability of individuals to access a portion of their superannuation - but what must the SMSF trustee consider before paying benefits?

This paper looks at the eligibility of individuals to access their superannuation, the process to do so and the issues which SMSF trustees should consider.

Temporary Early Release

The Government is allowing individuals affected by the COVID-19 pandemic to access up to $10,000.00 of their superannuation benefits in the 2019/20 financial year and up to a further $10,000 in the 2020/21 financial year.

Eligibility

As the release of the benefits is not automatic, application must be made for the release of the benefits. To be eligible to apply for early release of superannuation benefits, an individual must have suffered adverse economic effects as a result of COVID-19.

An individual’s entitlement to apply for early release of superannuation benefits is detailed in a new addition to the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations), at reg 6.19B.

Effectively, the member will be eligible to apply if they:

  • are unemployed; or
  • are eligible to receive from Centrelink:
    • jobseeker payment
    • parenting payment;
    • special benefit;
    • youth allowance (unless a full time student or new apprentice);
    • farm household allowance; or
  • on or after 1 January 2020:
    • were made redundant, or
    • had their working hours reduced by 20% or more; or
    • being a sole trader, suffered:
      • a business suspension; or
      • a reduction in turnover of 20% or more.

A member may make 2 applications for early release of superannuation benefits, each for a maximum of $10,000.00 as follows:

  • one in the financial year to 30 June 2020; and
  • one in the 2020/21 financial year although the application must be made before 24 September 2020.

Application Process

To apply for the early release of their superannuation benefits, whether as a member of an SMSF or a Public Offer Fund, the member is required to complete an application to the Australian Taxation Office (ATO) through their myGov account.

Determination

Once received, the ATO will consider the application and, if approved, will provide a ‘determination’ to the member, confirming the authority to access the benefits, and the amount approved for release.

If the member’s benefits are with a Public Offer Fund, a copy of the determination will be sent to that fund, as well as an authority from the member to release the approved amount. However, if the member’s benefits are held by their SMSF, the ATO determination will be sent only to the member, who should then provide that to the trustee.

Action of the SMSF Trustee

The SMSF trustee should not act until it receives the ATO determination.

As with most trustee actions being contemplated, the trust deed should be reviewed to ensure it contains sufficient power for the trustee to make the payment(s).

In this instance, it is not a matter of whether or not the trustee will act - the ATO determination is a direction to the SMSF trustee, meaning that if the action is not authorised under the trust deed, the deed should be amended by the trustee to ensure it has the necessary authority, in addition to the ATO determination, to pay the benefit.

The Process

Effectively, the standard process is:

  • the member provides the ATO determination to the SMSF trustee; and
  • the trustee makes payment of the authorised amount.

However, as with most benefit payments, documentation is an important component of the process. Other than the ATO determination and a trust deed which empowers the payment, it is important the trustee has a documentation trail confirming the transaction, including:

  • correspondence from the member to the trustee providing:
    • the ATO determination; and
    • their bank account details;
  • a resolution of the trustee noting the ATO determination and resolving to pay the authorised amount to the member’s nominated bank account; and
  • correspondence from the trustee to the member confirming the payment.

Topdocs provides a range of documents, including those mentioned above, for payment of the authorised early release of benefits which we have determined to provide free of charge to advisors and their clients.

Waiting for the ATO determination

A benefit of an SMSF is that it is controlled by the members, in their capacity as trustees or directors of the trustee of the fund.

In the instance of accessing benefits, care needs to be taken not to access benefits before authorised to do so.

In regard to a member accessing benefits under the early access to superannuation provisions, it is very important to note that the trustee must not release benefits until they have received a copy of the ATO determination.

Benefits to be Released

If an SMSF holds unrestricted non-preserved benefits for a member, the member may access those benefits at any time, so authority is not required to access that portion of their benefits.

The authority will, however, be required to access their preserved and restricted non-preserved benefits.

Transition to Retirement Income Stream

Member benefits held in a Transition to Retirement Income Stream (TRIS) in the accumulation phase (a TRIS in retirement phase will comprise unrestricted non-preserved benefits) can be accessed under the early access to superannuation provisions.

Whilst the permitted benefit would be in addition to the maximum 10% income stream payment permitted, for the amount to be paid under the early release provisions the amount would need to be commuted from the TRIS to the accumulation account, and then paid to the member.

Otherwise, there is a risk that the pension standards could be breached through the payment in excess of 10% of the TRIS balance.

Conclusion

Although quite a simple process, the early access to superannuation provisions do contain some traps. In particular:

  • the trustee should wait for the ATO determination before paying the claimed benefit;
  • a determination is not required for benefits in retirement phase (or unrestricted non-preserved benefits in accumulation phase);
  • if the benefits are from a TRIS in accumulation phase, a partial commutation to the accumulation account should take place first;
  • the SMSF trust deed should permit the payment to be made; and
  • the interactions between the member and trustee regarding the early access to superannuation should be documented.

The Topdocs early access to superannuation package provides a full documentation trail for the release of the authorised amount of benefits.

COVID-19 Early Access to Superannuation – SMSF Trustee Considerations

Should you have any queries regarding early access to SMSF benefits as a result of COVID-19, please contact the team at Topdocs on 1300 659 242.