Looking To Access Your Superannuation On Compassionate Grounds?
Here’s What You Need To Know
Superannuation isn’t just for retirement. While that’s the ideal scenario, in moments of genuine need, it can offer a powerful source of support.
If you’re navigating financial hardship, accessing your superannuation on compassionate grounds may be a vital step in restoring your independence, reclaiming your financial freedom, and moving into a more prosperous season of life.
In this blog, we’re walking you through the essentials, from eligibility to next steps, so you can make informed decisions about accessing your superannuation when it matters most — because we believe that understanding your options is the first step toward taking control of your finances.
Here’s What You Need To Know
Superannuation isn’t just for retirement. While that’s the ideal scenario, in moments of genuine need, it can offer a powerful source of support.
If you’re navigating financial hardship, accessing your superannuation on compassionate grounds may be a vital step in restoring your independence, reclaiming your financial freedom, and moving into a more prosperous season of life.
In this blog, we’re walking you through the essentials, from eligibility to next steps, so you can make informed decisions about accessing your superannuation when it matters most — because we believe that understanding your options is the first step toward taking control of your finances.
First off, what does “compassionate grounds” actually mean?
There are only a few specific situations where you or your dependent may be able to access your superannuation early for compassionate reasons. The ATO will only approve early release if it's to help cover a genuine and immediate financial need that can’t be met any other way.
You may be eligible to access your super for expenses relating to:
Preventing foreclosure or the forced sale of your home
Palliative care for yourself or a dependent with a terminal illness
Funeral or burial expenses for a dependent
Modifying your home or vehicle due to a severe disability (for yourself or a dependent)
Medical treatment that’s not available through the public health system
Medical transport related to a serious illness or condition
To access your superannuation early on compassionate grounds, the ATO requires you to meet five very specific conditions:
1. You Must Be an Australian or New Zealand Citizen or Permanent Resident
If you're currently a temporary resident, you’re not eligible to apply.
If you used to be a temporary resident but aren’t currently a citizen or permanent resident, you're also ineligible. However, you might qualify for a Departing Australia Superannuation Payment (DASP).
2. The Expense Must Fall Under an Approved Compassionate Ground
Each compassionate ground has its own criteria, and you’ll need to show that the specific situation applies to you.
For example, if you're applying for a medical treatment, it must be:
Not available through the public system (e.g. not covered by Medicare)
Recommended by at least two qualified medical practitioners
Necessary to treat a life-threatening illness, alleviate chronic pain, or manage an acute mental illness
3. The Expense Must Be Unpaid or Paid Using Borrowed Money That You Still Owe
The ATO won’t approve access to reimburse yourself for out-of-pocket expenses that have already been fully paid.
If the expense hasn’t been paid yet, you’ll need to provide an unpaid invoice or quote.
If you’ve already paid the expense using borrowed funds (e.g. a personal loan or credit card), you may still be eligible to access your superannuation, but only to repay the loan/credit card, and you’ll need to provide supporting documentation (like a loan agreement or bank statement).
4. You Must Show You Can’t Afford to Pay Without Using Your Superannuation
You’ll need to demonstrate that the expense cannot be reasonably paid through other means. That includes:
Personal savings
Selling assets, shares, or investments
Accessing other financial support, such as the National Disability Insurance Scheme (NDIS)
Borrowing money or redrawing from a mortgage
Important to note: If you've tried to borrow money and now can't repay it, this may still support your eligibility.
5. You Must Provide All Required Documents
Your application must be backed by detailed evidence. This typically includes:
Quotes or invoices for the expense
Supporting letters from medical practitioners (where applicable)
Proof of financial hardship or inability to cover the expense
Evidence of your relationship to the dependent (if the expense relates to them)a
One of the most common reasons Australians apply to access their superannuation early on compassionate grounds is to prevent the foreclosure or forced sale of their home.
If you’ve fallen behind on your mortgage and are at risk of losing your principal place of residence, you may be able to apply to release part of your super to help cover those overdue repayments. That being said, the ATO has strict rules around this too.
Here’s what you need to know:
Eligibility Requirements for Mortgage Assistance
To qualify, you must demonstrate all of the following:
The home is your principal place of residence (not an investment property or holiday home)
You’re in arrears and facing the threat of foreclosure or sale
The money will be used solely to prevent the sale or foreclosure, not for general living expenses or future repayments
Required Documents
Your application must include:
A formal letter from your mortgage lender, stating that your home is at risk of being sold due to missed repayments
A statement of arrears showing the exact amount outstanding
Evidence that you’re unable to pay the arrears through other means (savings, sale of assets, etc.)
Proof that the home is your primary residence
Here’s a quick step-by-step on the process of accessing your superannuation —
One, check your eligibility. We discussed this earlier in the blog.
Two, gather supporting documents. These will differ depending on which compassionate ground you’re applying for, but they can include quotes or unpaid invoices, medical reports from two registered practitioners, a letter from your lender stating foreclosure is imminent, proof of relationship to dependent, and financial hardship evidence (such as bank statements and asset summaries).
Three, apply through the ATO’s online portal through myGov. To do this, you’ll:
Log into myGov
Link your ATO account (if it’s not already linked)
Navigate to Super > Manage > Compassionate release of superannuation
Fill out the application and upload your documents
Four, wait for the ATO’s decision. The ATO will assess your application and notify you in writing with one of the two outcomes:
APPROVED – your request is valid, and the amount can be released.
REJECTED – your application didn’t meet the criteria (they typically explain why).
Five, request the funds from your superannuation fund. Once approved, your retail or industry fund will receive a copy of the ATO approval and will release the funds directly to you or the service provider (depending on the case). Sometimes, you might need to separately contact your fund to request the payment if it’s not automatic.
If you’re a member and trustee of a self-managed superannuation fund (SMSF), accessing your superannuation on compassionate grounds is a bit more complex than it is for members of retail or industry funds.
That’s because you wear two hats, as both the beneficiary applying for access and the trustee responsible for following the law when releasing funds.
Here’s what you need to know as an SMSF holder in 2025:
You still have to apply through the ATO.
Regardless of your SMSF structure, you can’t bypass the ATO. All early access to superannuation on compassionate grounds must be approved by the ATO, not your accountant, financial advisor, or SMSF auditor.
The application is made via MyGov using the ATO online portal, where you’ll be asked to:
Select the compassionate ground you’re applying under (e.g. medical, mortgage, etc.)
Upload supporting documentation (invoices, quotes, letters, etc.)
Declare that you meet all five ATO eligibility conditions
You will not be given a dollar figure to withdraw, but instead the ATO will either approve or reject the amount you requested, based on the evidence you provide.
The ATO must approve the withdrawal before the SMSF releases funds.
This is the most critical part.
You need to wait until you receive written approval from the ATO before your SMSF can release any money.
As the trustee of your SMSF, it is illegal to release funds early without ATO approval, even if you’re under financial pressure. Doing so could trigger heavy tax penalties, disqualification as a trustee, and your fund being made non-compliant, which may result in nearly half the fund’s assets being taxed.
Once the ATO approves the request, they’ll issue a compassionate release approval letter with details of the approved amount, the purpose for release, and a timeframe for releasing the funds.
The SMSF trustee (you) must action the payment.
Once the ATO gives written approval, you (as the trustee) must:
Release only the amount specified
Make sure it is used solely for the approved purpose (for example, directly to a medical provider or mortgage lender)
Retain detailed documentation showing when, how, and why the funds were paid.
For mortgage-related compassionate grounds, the payment must go directly to the lender, not to your personal account.
In terms of reporting and record-keeping and reporting…
As an SMSF trustee, you’re required to:
Record the payment in your SMSF’s financial records
Make sure the early release is shown in your SMSF annual return (SAR)
Keep copies of the ATO approval letter, invoices, and payment confirmations for audit purposes
Disclose the release to your fund’s auditor at the end of the financial year.
Failing to keep adequate records, even if you had ATO approval, can lead you to compliance issues during an audit.
Here’s some additional tips and considerations for SMSF members:
Don’t prepay the expense, as the ATO generally won’t approve reimbursement unless the funds were borrowed (and still unpaid).
Check your trust deed to make sure your SMSF’s governing rules allow for early release under compassionate grounds.
Consider the impact on your retirement balance, because even if you qualify, accessing superannuation early can greatly reduce your future savings and earnings.
Stay objective as the trustee. While it’s tempting to focus on your personal needs, as a trustee you have a fiduciary duty to act in the fund’s best interest and comply with superannuation laws.
Accessing your superannuation early is a serious financial decision, and rightly so. The ATO’s process is deliberately strict to ensure your retirement savings remain protected, unless there’s a genuine and urgent need for the funds.
That said, if you’ve found your way to this blog and are taking the time to research your options, you’re already demonstrating care and due diligence in navigating what’s best for you and your situation at hand.
If you're uncertain about your eligibility or need support in preparing your SMSF for early release, we’re here to help. At FRE.DM Wealth, our mission is to guide you toward financial freedom — and if accessing your superannuation is a necessary step to help you through a challenging chapter, we’ll work with you to make sure it’s done right.
Reach out via our website or connect with us on Instagram, our DMs are always open. Whatever your circumstances, we’ll meet you with empathy, integrity, respect, and dedication to helping you get back on the path to financial freedom.
