Pauline Hanson is targeting superannuation. Should it be easier to access your savings?

Who can withdraw from their superannuation?

You can apply to the Australian Taxation Office to dip into your savings early for “compassionate” reasons, as long as you meet strict rules.

The ATO lists five main grounds of eligibility:

• medical treatment or transport for you or your dependant;

• accommodating a disability for you or your dependant;

• palliative care for a terminal illness for you or your dependant;

• funeral expenses for your dependant; and

• preventing foreclosure or the forced sale of your home.

For medical treatment, access can be for treating a life-threatening injury or illness, or alleviating acute or chronic pain or mental illness.

You may also qualify for early access for “severe financial hardship” – for example, if you are on income support and cannot pay for urgent living expenses.

You apply directly to your super fund for up to $10,000 and to qualify you must have been receiving an eligible income support payment for at least six months and have no other way of paying.

You can apply for this once a year.

Bob Breunig, the director of the ANU’s tax and transfer policy institute, does not agree with suggestions that rules around early release should be loosened.

“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.”

The second is that it has delivered us a fiscally sustainable retirement system at a time when other countries, especially in places like Europe, are struggling to pay for the pensions of rapidly ageing populations.

“All of those countries would happily take our system, and we don’t want theirs,” he says.

How common is early access to superannuation?

It’s rare, but is on the rise.

According to the ATO, 63,300 individuals in 2024-25 were granted early access for compassionate reasons, the vast majority to pay for a medical treatment.

To put that into context, there are roughly 14 million people with at least one super account who are not past retirement age.

The sums were not trivial – more than $1.4bn was withdrawn early under compassionate grounds in that financial year. That suggests the average amount was about $22,400.

The total amount approved for early release for compassionate reasons is also climbing quickly. It was up 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 the amount of early release of super payments for severe financial hardship. A little over $1bn was paid out to fund members under this category in 2024-25, and has also increased rapidly over recent years.

So should it be easier to get early release of super?

Jessica Spence, the director of policy at Super Consumers Australia, says there’s always room for improvement in the super system.

“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,” Spence says.

The Super Members Council calculated that a 30-year-old who withdrew $20,000 from their super during the Covid-era special early release scheme could be left with about $93,600 less at retirement.

And Spence also warns relaxing the rules around early access can make it easier for people to fall prey to exploitation or abuse.

There were estimates that during the pandemic, tens of thousands of women may have been coerced by abusive partners into withdrawing from their retirement savings.

And outside of the crisis, a joint investigation by Super Consumers and Choice in late 2024 revealed that unscrupulous operators were coaching people into how to get access to super for non-essential dental work for a hefty fee.

Spence said that had grift had moved into other medical areas such as hair plugs.

Are there any benefits for easier access to super?

There is evidence that many Australians are retiring with more money than they need to pay for a comfortable retirement.

Breunig agrees with analysis from experts such as the Grattan Institute that the compulsory super contributions rate of 12% is too high.

In this context, there is some merit to the argument that people are being forced to save too much for retirement, and not letting Australians use their incomes in their 30s and 40s when they need it to pay for homes and families.

So while Breunig does not back making it easier to pull money out of money early, “I would be a fan of reducing the super guarantee to 9% to 10%”.

“Or, if you couldn’t do that, keep 9% for preservation [only for retirement] and make 3% a general saving that could be used for other reasons.”