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Condition of release

Compassionate grounds

Section: 7.10

7.10 Compassionate grounds

Early release of superannuation benefits on compassionate grounds is currently governed by Regulations 6.19A of the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations). This sets out the circumstances in which superannuation may be released upon compassionate grounds and works in conjunction with Schedule 1 of those Regulations, which sets out, for certain grounds of release, the maximum amounts and permitted frequency of release. Equivalent regulations are contained in Regulation 4.22A of the Retirement Savings Account Regulations 1997 in respect of Retirement Savings Accounts (RSAs).

A member will be allowed to withdraw some of their superannuation on compassionate grounds. Compassionate grounds include needing money to pay for the following:

  • paying for medical treatment or medical transport. For this to apply, the expenses must relate to life-threatening illness or injury.
  • paying for home or vehicle modifications or the purchase of disability aids due to severe disability
  • paying expenses associated with palliative care
  • enabling the person to make a payment on a loan to prevent the foreclosure of a mortgage on the person's principal residence or payment of council rates to avoid loss of the home
  • paying the expenses associated with the death, funeral or burial of a dependant

To obtain early release of superannuation benefits on compassionate grounds, members apply to the Regulator and provide identity documents, quotes and unpaid invoices for the amount of funds required, and the prescribed documentation specified in the regulations to prove the individual needs the funds requested.

Where the conditions of release are met, the benefit must be released as a single lump sum not exceeding an amount that tis determined in writing by the Regulator to be reasonably required, based on the nature of the hardship and the persons' financial capacity.

Members can apply under multiple grounds, although the documentation required is different for each ground of release. For instance, a person seeking early release for medical treatment must provide written evidence from at least two medical practitioners - one of whom must be a specialist - certifying that the treatment or medical transport.

Medical treatment

Regulation 6.19A(3) describes the medical treatment that is covered:

a. 'is necessary to:

i. treat a life-threatening illness or injury; or

ii. alleviate acute, or chronic, pain; or

iii. alleviate an acute, or chronic, mental disturbance; and

b. the treatment is not readily available to the person, or the dependant through the public health system

Both certificates (i.e. of each registered medical practitioner) must therefore cover both points a. and b. For instance, a 'dental treatment' can be 'medical treatment' for the purposes of sub-regulation 6.19A(1)(a), the evidentiary requirements of sub-regulation 6.19A(3) must be met in such cases by 2 dental practitioners, at least one of whom is a specialist.

Medical transport

What is covered under medical transport?

Regulation 6.19A(7) states that 'medical transport' means transport, for medical attention, by land water or air. The medical attention or treatment must be of the type mentioned in Regulation 6.19A(3)(a) i.e where it is 'necessary to treat a life-threatening illness or injury, or to alleviate acute, or chronic, pain or alleviate an acute, or chronic, mental disturbance.'

Payment for medical transport by taxi, ambulance, plane etc is clearly covered by regulation 6.19A(1)(a). Paragraph (a) could also cover the release of benefits to pay for the purchase of a reliable second-hand motor vehicle, or for repairs to an existing motor vehicle to ensure that it is roadworthy, to transport an applicant or his or her dependant in connection with the necessary medical treatment.

How much should be released?

Trustees will base their information obtained from doctors and service providers as to the nature and frequency of medical treatment required, sufficient to cover the cost of the relevant mode of transport to access the treatment. This could include quotes for the cost of a second-hand vehicle (less trade-in on an existing vehicle if applicable) or the cost of repairs to an existing vehicle, together with an estimate of running costs where applicable.

What if medical treatment or medical transport expenses are to be covered by insurers or by another source? Reg 6.19A91)(a) only enables the release of benefits where they are 'required pay for medical treatment or medical transport'. If the money to pay for these items can be obtained from another source eg an insurer, then the money is not 'required' for medical treatment or transport and a decision and then the trustee may refuse the release of benefits under Reg 6.19A (1)(a).

Palliative care

The purpose of this ground is to allow a release for a member who requires palliative care (in the case of impending death) where they have a medical condition or injury that will result in death, usually within 24 months.

Palliative care expenses may include the reasonable costs of:

  • accommodation in a hospice
  • service providers (such as medical specialists, nurses, support workers, counsellors and health professionals) giving the palliative care
  • carers giving palliative care at home or medication or medical treatment directly related to palliative management

An expense may be consistent with this ground if payment of the expense will assist in managing the symptoms of the member's terminal medical condition.

Schedule 1, item 107 of the Superannuation Industry(Supervision) (SIS) Regs and Schedule 2, item 09 of the Retirement Savings Account (RSA) Regs state that the release should be what is reasonably required. For the most part, trustees can accept the quote(s) that the customer has provided to support their application.

Only unpaid expenses will generally be considered for the early release of superannuation benefits.

Members affected by the adverse economic effects of COVID-19 may apply for early release of benefits from their superannuation account on compassionate grounds. Two releases of up to $10,000 each are permitted - one for applicants made up to 30 June 2020 for the 2019-20 financial year and another for applications made from 1 July 2020 to 31 December 2020 (extended from 24 September 2020) for the 2020-21 financial year.

Source:; ; Regulations 6.19A of the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Monday, July 12, 2021