At the time of IFA going to print, Superannuation and Corporate Law Minister Nick Sherry informed the industry of a number of options for bushfire victims to access their insurance benefits and superannuation savings.
While superannuation savings are not usually accessible before an individual reaches the age of 55, under limited, prescribed circumstances, the law allows early access, Sherry said.
“A person should contact their superannuation fund directly to apply to access their superannuation in circumstances such as severe financial hardship,” he said.
These grounds include mortgage assistance in the case of threat of foreclosure, certain medical expenses, modifications to a home or vehicle in the case of severe disability, and expenses associated with a dependant’s death or funeral.
Sherry said he had spoken with the Australian Prudential Regulation Authority (APRA) regarding providing priority to certain requests.
“I have also asked APRA to prioritise any access requests arising from an area where the natural disaster relief and recovery arrangements apply. This will include Victorian bushfire-related and Queensland flood-related applications for early access to superannuation on specified compassionate grounds,” he said.
In his announcement, Sherry called upon those in the industry to be aware that many of those affected by the bushfires and the flooding might not recall what kind of cover their insurance policy included.
“At such a time, some people may not immediately recall that they are likely to have TPD and death insurance via their superannuation fund. I strongly encourage those that are able to consider this option. Claims should be made directly to a person’s super fund,” he said.
“I have also spoken with Pauline Vamos, chief executive of the Association of Superannuation Funds of Australia, who has confirmed super funds will do everything they can to assist.”
As well as Sherry offering his support, Australia’s banking and investment firms have offered their backing in the form of donations.
Westpac, National Australia Bank, Commonwealth Bank of Australia, ANZ, AMP, Bendigo and Adelaide Bank, and Axa Asia Pacific have pledged $5.2 million to those affected by the disaster.
It is interesting that superannuation has been brought back into the spotlight in such a positive way.
While many during the past 12 months may have begrudged market turmoil for eating away at their superannuation savings, for some, the availability of their superannuation may be a saving grace.
After everything these people have gone through, at least there is comfort to know that their super can offer some form of comfort and protection.
