Investment experts caution that loosening access to early release of superannuation could make it easier for people to fall prey to exploitation or abuse. The debate follows Pauline Hanson's call to "lighten up" the rules, while the Coalition considers revisiting early access for first-home buyers.
Current rules for early withdrawal
Australians can apply to the Australian Taxation Office (ATO) to access super early for "compassionate" reasons, subject to strict eligibility. The ATO lists five main grounds: medical treatment or transport for you or your dependant; accommodating a disability; palliative care for a terminal illness; funeral expenses for a dependant; and preventing foreclosure or forced sale of your home. For medical treatment, access can cover life-threatening conditions, acute or chronic pain, or mental illness.
Early access is also possible for "severe financial hardship"—for example, if you are on income support and cannot pay urgent living expenses. You can apply directly to your fund for up to $10,000, provided you have received an eligible income support payment for at least six months and have no other way to pay. This can be done once a year.
How common is early access?
Early access is rare but rising. In 2024-25, 63,300 individuals were granted early access for compassionate reasons, mostly for medical treatment. This compares with roughly 14 million people with at least one super account who are not past retirement age. More than $1.4bn was withdrawn early under compassionate grounds that year, averaging about $22,400 per person.
The total approved for compassionate early release climbed about 40% on 2023-24 and was nearly double the $762m accessed in 2022-23, according to the ATO. The Australian Prudential Regulation Authority reports that a little over $1bn was paid out for severe financial hardship in 2024-25, also increasing rapidly in recent years.
Should it be easier?
Bob Breunig, director of the ANU's tax and transfer policy institute, opposes loosening rules. "We shouldn't allow early release," he says. "Super does two really good things. First, it forces people to save who would not otherwise save." Second, it has delivered a fiscally sustainable retirement system at a time when other countries struggle to pay pensions for ageing populations. "All of those countries would happily take our system, and we don't want theirs," he adds.
Jessica Spence, director of policy at Super Consumers Australia, says there is always room for improvement. "Certainly if you make the rules more straightforward then it will be easier for people to access their money, but they may have less in retirement - at the end of the day, that's the main trade-off," she says. The Super Members Council calculated that a 30-year-old who withdrew $20,000 during the Covid-era early release scheme could have about $93,600 less at retirement. Spence also warns that relaxing rules can make it easier for people to fall prey to exploitation or abuse, citing estimates that tens of thousands of women may have been coerced into withdrawing super during the pandemic, and a 2024 investigation by Super Consumers and Choice revealing operators coaching people into accessing super for non-essential dental work for a fee.
Are there any benefits?
There is evidence that many Australians retire with more than they need for a comfortable retirement. Breunig agrees with analysis from the Grattan Institute that the compulsory super contribution rate of 12% is too high. He does not back easier early access, but says, "I would be a fan of reducing the super guarantee to 9% to 10%." Alternatively, he suggests keeping 9% for preservation and making 3% a general saving that could be used for other reasons.
