How to access your super early when times are tough

afr.com:

Cost-of-living pressures and financial stress could make dipping into your superannuation tempting, especially when you have “control of the chequebook” as the trustee of an SMSF.

If you’re considering pulling money out of your SMSF, don’t do it – even if you intend to put it back in.

If you withdraw your super before meeting a condition of release, then you will have accessed it early and that’s illegal. David Rowe

Superannuation law prohibits a fund from providing financial assistance to members or their relatives under any circumstances, including lending money on arm’s length commercial terms.

However, small loans may be made under strict conditions to your business.

Among other restrictions, the loan can only be made to a company or trust with a corporate trustee – not to a sole trader or partnership – and the amount of the loan must be less than 5 per cent of the total fund assets (based on market value).

But where your business is struggling and requires more than a mere cash injection to survive, it could hardly be argued that it’s being made on an arm’s length basis as no prudent person would lend money to a failing business.

Accessing super is only allowed where you have satisfied a “condition of release” – defined circumstances like retirement, attaining age 65, permanent incapacity, terminal illness, reaching preservation age and starting a transition-to-retirement (TTR) pension, or death.

Early release of super also exists for severe financial hardship and on compassionate grounds.

If you withdraw your super before meeting a condition of release, then you will have accessed it early and that’s illegal.

While super law permits you to access your super on the grounds of severe financial hardship, there are