Can you access your super savings early? And are there consequences?

Superannuation

You can access your super early in certain circumstances, but it will erode your retirement savings. (Unsplash: Fabian Blank)

Australians are generally required to keep their super locked away until retirement, with early access allowed only in a narrow set of circumstances.

But exactly when and why people should be able to dip into their retirement savings has become a renewed political battleground recently.

One Nation leader Pauline Hanson has called the current system "broken" and argued that Australians who are facing mortgage and cost-of-living pressures should have greater access to their super.

Liberal senator Andrew Bragg has also recently renewed his long-running criticism of compulsory superannuation, telling the ABC last week: "[Super] is one of the biggest public policy failures since Federation."

"It hasn't helped the budget, and it has not really helped many people get off the pension. What it has done is it has created a huge viper's nest for banks and financiers and unions to pilfer," he told the ABC.

The superannuation industry has traditionally resisted proposals to use compulsory super more broadly for housing and cost-of-living relief, arguing that early withdrawals would erode retirement savings without addressing the underlying problems.

"Raiding super doesn't actually fix cost-of-living pressures; it just shifts it from now, when people are working, to retirement, when they aren't," said the Association of Superannuation Funds of Australia's chief executive, Mary Delahunty.

So when can you access your super early? What are the rules?

What are the superannuation withdrawal rules as they stand?

The simplest rule is that once you turn 65, you can access your super even if you are still working.

People can also access their super earlier if they have reached their preservation age and retired. Preservation age depends on when you were born, ranging from 55 for people born before July 1, 1960, to 60 for anyone born from July 1, 1964.

Millions of Australians could have no say in who inherits their super. Here’s how to check if you’re one of them.

In practical terms, the preservation age for younger Australians is now 60.

Someone who has reached preservation age but continues working can also potentially start a transition-to-retirement income stream, which allows them to draw some income from their super without fully retiring.

Canstar data insights director Sally Tindall encourages people to obtain advice if they are looking to access their super early.

Ms Tindall said that would include advice on whether you needed to pay tax on that money, and what impact that money might have on things, such as support payments you received.

Can you access super if you're at risk of losing your home?

People at risk of losing their principal home through foreclosure or forced sale may also be able to access their super early, but the eligibility rules are strict.

Australian Taxation Office (ATO) data shows 12,500 applications were lodged on these grounds in 2024–25 financial year, but just 1,200 were approved, allowing $20.9 million in super to be released.

To qualify, applicants generally need to show that their mortgage payments are overdue, that the lender will foreclose or exercise its power of sale if the debt is not paid, and that they do not have the financial capacity to meet the expenses another way.

There are also limits on how much is released.

Ms Tindall said accessing super should be considered a last resort.

"It can be many months, often years, of conversation with the bank to see whether you can get back on track, and if you do access this super early, again it might impact the tax you pay, and it could potentially impact any Centrelink support payments."

What about medical treatment?

The release of super on compassionate grounds last financial year was mainly for medical reasons, according to the ATO.

The number of people accessing their super early on medical grounds has skyrocketed since 2018-19, rising by 167 per cent, according to Canstar analysis.

Australians were allowed to withdraw $1.37 billion from their superannuation accounts for medical costs last financial year, in another jump from previous years.

Dental treatment was by far the biggest medical category.

The ATO received 47,630 dental applications and approved 34,050, covering 32,850 individuals and a total of $817.6 million in the last financial year. That was up from $526.4 million the previous financial year.

Other major medical categories included:

Access is only available where the eligibility requirements are met, including where the person cannot otherwise afford the expense.

Applicants generally need to provide an itemised quote or unpaid invoice and two medical reports, including one from a relevant specialist, as well as any other supporting documents required for their circumstances.

Earlier this year, the ATO and Australian Health Practitioner Regulation Agency warned Australians to be cautious about accessing super for medical and dental treatment, amid concerns some health practitioners and third parties were encouraging people to inappropriately tap their retirement savings.

Are there consequences to withdrawing from your super early in life?

Experts say early withdrawals from super will erode your retirement savings, leading to compounding losses over your lifetime and possible financial problems later in life.

During the 2020 pandemic, then-prime minister Scott Morrison allowed millions of Australians who were financially impacted by COVID-19 to draw down on their super.

Eligible individuals could apply for the program between April 20 and December 31, 2020, to access:

Amounts released under the early super release scheme were tax‑free and did not need to be included on your tax return.

The controversial coronavirus measure allowing Australians affected by the pandemic to tap into their retirement savings will close from New Year's Day.

The ATO received more than 4.5 million applications for the scheme (for 3.05 million people) worth a total of $37.8 billion.

There were 4.5 million approved applications to release super from Australian Prudential Regulation Authority (APRA) regulated super funds, totalling $37.4 billion, and 40,000 approved applications from self‑managed super funds (SMSFs), totalling $395 million.

The vast majority of people who accessed the scheme had an annual income below $90,000.

In 2024, an analysis from the Super Members Council found the COVID‑era early release super scheme could hit Australian taxpayers with a bill of up to $85 billion, mostly due to higher pension costs for those who withdrew their savings and who would now need to rely more heavily on government support in retirement.

Its analysis showed that a 30‑year‑old who withdrew $20,000 from their super could be left with about $93,600 less at retirement, leaving them dramatically worse off.

It said about 725,000 Australians "effectively wiped out their superannuation accounts" and, of those people, 45 per cent were aged 25 and under, and 70 per cent were aged 30 and under.

"Compound earnings make up three‑quarters of a super balance at retirement, making it difficult to recoup those losses," it said.

"People who accessed their super before retirement are projected to need to draw more heavily on an age pension, which hikes the pension bill for future taxpayers."

Super Members Council chief executive Misha Schubert said it would have "devastating consequences" for some people.

"In the early stages of the COVID pandemic, before government assistance kicked in with JobKeeper, many Australians were encouraged to sacrifice their retirement savings to support themselves," she said.

"Tragically, that will now leave many people significantly poorer in retirement.

These are the devastating consequences of schemes that break super's preservation rules. People are left with far less money at retirement, and the next generation — our children and grandchildren — will have to pay higher taxes to pick up the bill for higher pension costs," she said.

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