External
Departmental Instruction

DATE OF ISSUE:  11 DECEMBER 1997

Subject: EARLY RELEASE OF SUPERANNUATION BENEFITS

Purpose of Instruction

The purpose of this Departmental Instruction (DI) is to inform on further changes to eligibility criteria required for income support recipients who apply for the early release of their superannuation benefits.  These new changes are effective from 9 December 1997.

BACKGROUND

July 1997 changes are described in DI C38/97

Departmental Instruction C38/97 described the changes to the Superannuation Industry (Supervision) (SIS) Regulations to enable Superannuation funds and Retirement Savings Account providers to release 'preserved' benefits in cases of severe financial hardship, to people receiving income support payments including service pension or income support supplement.

Under the 1 July 1997 changes, the SIS regulations allow the trustees of superannuation funds and RSA providers to administer an objective test to determine severe financial hardship.  This test relies on DSS or DVA to provide a letter confirming that the person has been receiving income support payments for a particular period, subject to their age.

Further changes from 9 December 1997

Further amendments to the SIS regulation, effective from 9 December 1997 provide, amongst other things, for a reduction in the period for which some applicants must be in continuous receipt of Commonwealth income support.

What the DI covers

This DI describes the 9 December 1997 changes, and provides revised standard letters as a result of those changes.

REVISED HARDSHIP CRITERIA UNDER SIS REGULATIONS

Revised criteria for early release of superannuation benefits

The following table shows these revised criteria.  Under the changed regulations, applicants of any age may now qualify for early release of their superannuation benefits after a shorter period of income support, if they meet the mandatory trustee administered subjective test.

Age

Criteria from 1 July 1997

Amended Criteria from 9 December 1997

Below
55 years, 39 weeks
  • Receipt of a specified Commonwealth income support payment for a continuous period of 52 weeks immediately prior to the date of application
  • Receipt of a specified Commonwealth income support payment for a continuous period of 26 weeks immediately prior to the date of application;
    and
    satisfaction of a mandatory trustee administered subjective test. (No input required from DVA to decide this.)

Age
55 years 39 weeks and over
  • Receipt of specified Commonwealth income support payment for a cumulative period of 39 weeks since 55 years of age;
    and
    not gainfully employed on either a part-time or full time basis at the date the application is made to the trustee or RSA provider.
  • Receipt of specified Commonwealth income support payment for a cumulative period of 39 weeks since 55 years of age;
    and
    not gainfully employed on either a part-time or full time basis at the date the application is made to the trustee or RSA provider.

or

  • Receipt of income support for a cumulative period of 26 weeks after the person turned 55 years of age;
    and
    satisfaction of a mandatory trustee-administered subjective test.  (No input is required from DVA to decide this test.)

ISSUE OF ADVICE LETTERS TO APPLICANTS

New and amended standard letters

Standard letters from DVA and DSS to confirm the applicant meets the income support requirements have been amended as required by the new regulations.

Provide a letter to applicants with DVA   qualification

Appropriate standard letters should be provided to applicants seeking the early release of their superannuation.  Note that for people who have received income support payments for a continuous period of 26 weeks, the revised letter is not age specific.

The standard letters will be entered onto the shared drive as follows:

         Standard letter system

         IS Misc

         Statement for early release of superannuation

Description

Template Name

Applicants any age,

income support payment requirements met under the 26 weeks receipt of income support payment criterion.

EARLY SUPER

Any age

Has 26 weeks

Applicants aged 55 years and 39 weeks or more,

income support payment requirements met under 39 weeks income support payments criterion.

EARLY SUPER

55y 39w plus

Has 39 weeks

Applicants aged 55 years and 39 weeks or more,

income support payment requirements not met

EARLY SUPER

55y 39w plus

Not eligible

Applicants aged less than 55 years and 39 weeks,

income support payment requirements not met

(ie, < 26 weeks continuous income support payments)

EARLY SUPER

Under 55y 39w

Not eligible

Copies of these letters are at Attachment A.

Advise applicants of impact on entitlement

The standard letters advise applicants that their entitlement to income support may be affected if superannuation benefits are released.  However, where possible,  staff should also personally advise applicants to check their continuing entitlement to income support payments, and that the money they receive may be subject to the income and assets tests.


Nominated staff to issue letters

No delegation is required by a DVA officer to provide applicants with the letter so it may be issued by any DVA officer.  However, in practice it is up to the State Offices to nominate who should sign the letters.

Publicity

As this is not a DVA or DSS initiative, no active publicity is necessary.  The ISC will provide any necessary publicity through the superannuation trustees.

CONTACT OFFICERS

National Office

Any questions about the early release of superannuation should be directed to:

Name

Position

Telephone

John Bruce

Assistant Director

02-6289 6441

Annette Smith

Policy Officer

02-6289 6776

R J HAY

A/G BRANCH HEAD

INCOME SUPPORT

      December 1997


ATTACHMENT A: Standard letters under 'IS Misc'

Standard letter system

IS Misc Template

EARLY SUPER

Any age
Has 26 weeks

{Customer's name}

{Customer's address}

Dear {Title} {Name}

RELEASE OF SUPERANNUATION BENEFITS ON HARDSHIP GROUNDS - INCOME SUPPORT REQUIREMENTS MET

I am writing in response to your request for a letter in support of your application for release of superannuation benefits on grounds of financial hardship.

Superannuation benefits may be released on grounds of financial hardship to a person where:

  1. the person is in receipt of one of certain types of Social Security or Veterans' Affairs income support payments, and has continuously been in receipt of such a payment for at least the past 26 weeks.   These types of income support include the age service pension and invalidity service pension;
  2. the rules of the superannuation fund or retirement savings account permit release; 
  3. superannuation benefits have not been released on grounds of financial hardship in the previous 12 months; and
  4. the person is able to satisfy their superannuation fund trustee or retirement savings account provider that they are unable to meet reasonable and immediate family living expenses.

Any enquiries on conditions (b), (c) and (d) should be made to your superannuation fund trustee or retirement savings account provider.

This letter confirms that you are currently in receipt of a relevant Commonwealth income support payment, and that you have continuously been in receipt of such a payment for the past 26 weeks.

As the intention of this letter is to reflect your current circumstances, it is only valid for a period of 21 days from the date of this letter.   You need to provide the original of this letter to your superannuation fund trustee or retirement savings account provider to request release of superannuation benefits on hardship grounds.

The release of superannuation benefits may affect your income support payment, so you should discuss this matter with a Departmental Officer before you apply to access your superannuation.  You can speak to a Departmental Officer on the telephone number at the top of this letter.  If you decide to access your superannuation, you should advise the Department when the money has been released.

Yours sincerely

{Name of person issuing the letter}

{Date}


Standard letter system

IS Misc Template:

EARLY SUPER

55y 39w plus

Has 39 weeks

{Customer's name}

{Customer's address}

Dear {Title} {Name}

RELEASE OF SUPERANNUATION BENEFITS ON HARDSHIP GROUNDS - INCOME SUPPORT REQUIREMENTS MET

I am writing in response to your request for a letter in support of your application for release of superannuation benefits on grounds of financial hardship.

Superannuation benefits may be released on grounds of financial hardship to a person aged 55 years and 39 weeks or more where:

  1. the person has received a relevant Social Security or Veterans' Affairs income support payment for a total cumulative period of at least 39 weeks after reaching the age of 55.   These income support payments include the age service pension and the invalidity support pension;
  2. the person is not employed;  and
  3. the rules of the superannuation fund or retirement savings account permit release.

Any enquiries on conditions (b) and (c) should be made to your superannuation fund trustee or retirement savings account provider.

This letter confirms that you have received a relevant Commonwealth income support payment for a total cumulative period of at least 39 weeks after reaching the age of 55.

You need to provide the original of this letter to your superannuation fund trustee or retirement savings account provider to request release of benefits on hardship grounds.

The release of superannuation benefits may affect your income support payment, so you should discuss this matter with a Departmental Officer before you apply to access your superannuation.   You can speak to a Departmental Officer on the above phone number.   If you decide to access your superannuation, you should advise the Department when the money has been released.

Yours sincerely

{Name of person issuing the letter}
{Date}


Standard letter system

IS Misc Template:

EARLY SUPER

55y 39w plus

Not eligible

{Customer's name}

{Customer's address}

Dear {Title} {Name}

RELEASE OF SUPERANNUATION BENEFITS ON HARDSHIP GROUNDS - INCOME SUPPORT REQUIREMENTS NOT MET

I am writing in response to your request for a letter in support of your application for release of superannuation benefits on grounds of financial hardship.

Superannuation benefits may be released on grounds of financial hardship to a person aged 55 years and 39 weeks or more where one or both of the following requirements is met:

  • the person has received a relevant Social Security or Veterans' Affairs income support payment for a total cumulative period of at least 39 weeks after reaching the age of 55.   These income support payments include the age service pension and the invalidity service pension; or

  • the person is in receipt of a Social Security or Veterans' Affairs income support payments, and has continuously been in receipt of such payment for at least the past 26 weeks.

According to our records you do not meet either of the above requirements.  This means that you do not meet the income support payment requirements for release of superannuation benefits on grounds of financial hardship.

If you wish to obtain information on whether you may be able to access your superannuation on other grounds, you should contact your superannuation fund trustee or retirement savings account provider.

Yours sincerely

{Name of person issuing the letter}

{Date}


Standard letter system

IS Misc

Template:

EARLY SUPER

Under 55y 39w

Not eligible

{Customer's name}

{Customer's address}

Dear {Title} {Name}

RELEASE OF SUPERANNUATION BENEFITS ON HARDSHIP GROUNDS - INCOME SUPPORT REQUIREMENTS NOT MET

I am writing in response to your request for a letter in support of your application for release of superannuation benefits on grounds of financial hardship.

Superannuation benefits may be released on grounds of financial hardship to a person aged less than 55 years and 39 weeks where, amongst other things:

  • the person is in receipt of one of certain types of Social Security or Veterans' Affairs income support payments, and has continuously been in receipt of such a payment for at least the past 26 weeks.   These types of income support payments include the age service pension and invalidity service pension.

According to our records you have not received such a payment continuously for the past 26 weeks.   This means that you do not meet the income support payment requirements for release of superannuation benefits on grounds of financial hardship.

If you wish to obtain information on whether you may be able to access your superannuation on other grounds, you should contact your superannuation fund trustee or retirement savings account provider.

Yours sincerely

{Name of person issuing the letter}

{Date}