The federal government’s decision to ease the rules around early access to retirement savings as a result of terminal illness has drawn praise from industry bodies.
Assistant Treasurer Josh Frydenberg recently announced from 1 July, individuals with two medical certificates confirming they had been diagnosed with less than two years to live could seek to access their superannuation benefits.
Currently the law only allows early access to superannuation benefits for those people with less than one year left to live.
The Association of Superannuation Funds of Australia (ASFA) congratulated the government on the move.
“This is important as it will allow people to access their super to help fund treatment options that are not subsidised, and are often too costly for people to afford without accessing these savings,” ASFA chief executive Pauline Vamos said.
“People in the final year of their lives also often suffer from rapidly decreasing health, which makes it difficult for them to travel or participate in activities that allow them to enjoy the precious time they have left with their family and friends.
“Increasing the life expectancy period to two years will provide more people with the financial means to make the most of this time.”
The Financial Services Council (FSC) echoed the sentiments, saying flexible early release arrangements for superannuation were needed as the community developed a better understanding of the varied circumstances of the general public.
“The 12-month restriction is arbitrary and may prevent individuals with a terminal illness from readily accessing their superannuation when they need it,” FSC chief executive Sally Loane said.
“The FSC supports increasing this threshold to 24 months to accommodate a range of personal circumstances and illnesses.”