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Mortgage stress handbook

10. Getting your superannuation

You may be able get access to your superannuation when you are behind on your home loan. Certain conditions apply and there is no guarantee you will be successful in your application to get access to your superannuation.

Dos and Don’ts

  • Negotiate a financial hardship arrangement with your lender through the complaint resolution scheme, AFCA (see Chapters 6 and 7)
  • Get advice on whether accessing your superannuation is advisable in your situation.
  • Rely on getting your superannuation to solve all your problems
  • Access your superannuation when you need to sell your home anyway (see Chapter 8)
  • Negotiate a repayment arrangement that depends on getting your superannuation (as it may not happen)
  • Think that the lender will not proceed with legal action because you are accessing your superannuation


Your superannuation is usually protected from bankruptcy until it has been withdrawn from your super fund. If you owe more in debts than your house is worth, you should think seriously about leaving your superannuation in your superannuation fund so that it will be protected in the event that your house is sold for a significant shortfall and you end up bankrupt.

The amount you can withdraw is generally limited to the amount equal to 3 months repayments and 12 months interest.

You also need to pay tax on any amount you withdraw, reducing the amount available to pay the mortgage.

From 1 July 2018 responsibility for the administration of the early release of superannuation on compassionate grounds transferred from the Department of Human Services to the Australian Taxation Office (ATO). You will be required to have a MyGov account to complete the process. You can get one here: my.gov.au

Accessing your super

  1. Contact your superannuation fund and check that they will release your superannuation on compassionate grounds if approved by the ATO.
  2. You will need a letter from your lender (Local Council or other creditor) on its letterhead to upload to the ATO, which:
  • is dated
  • is no more than 30 days old on the date you submit it
  • states the following:
  1. There is an overdue amount
  2. The lender will sell your home if you do not pay it
  3. The address of the home
  4. The total amount for 3 months of loan repayments
  5. The total amount for the next 12 months of loan interest
  6. The name of the lender
  7. The account number of the loan

Submit your application to the ATO with supporting documentation using the my.gov.au website. If the ATO approves the release, you will need to send the original ATO letter to your superannuation fund. You will also need to comply with your superannuation funds’ requirements. This may include a separate form and identification verification.

You will need to pay tax on any amount you withdraw, reducing the amount available to pay the mortgage.

Some problems that may occur when trying to access your superannuation:

  • The lender will not agree
  • The lender agrees not to exercise its power of sale by a certain date but your superannuation is not released by that date
  • ATO will not approve the release
  • There is a delay in ATO processing your application
  • There is a delay by the lender in giving the required information and confirmation
  • A delay means that the amount released is not enough to cover your arrears

Remember Remember

The best way to avoid problems with getting your superannuation is to make a hardship arrangement that does not depend on successfully accessing your superannuation.

This chapter has explained the basis for accessing your superannuation in order to prevent your home being repossessed. There are other grounds that may apply, for example:

  • You have been receiving eligible Centrelink payments for over 6 months; and/or
  • You have medical grounds for accessing your superannuation including illness or to care for someone who is ill.

See www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/Early-access-to-your-super/