21 September 2023
Facing the loss of your regular income can be difficult for you, your family and any others you support financially. To help you (or someone close to you), here’s some simple information about how to protect your financial wellbeing and your super savings after being made redundant.
Find and combine lost super
Fewer accounts could save fees and make admin easier. Search for any lost super you may have and consider combining it so your super is in one place1.
Check your insurance cover
If your account is not receiving contributions, your insurance cover may cease after 16 months. It's worth using this time to check your insurance needs.
Access super early
In certain circumstances, such as severe financial hardship, you may be eligible to access some of your super early.
Administration and investment fees will continue to be deducted from your super balance to maintain your account.
The difference between redundancy and being stood down
You might be wondering what the definition of redundancy is, compared to the meaning of being asked to stand down.
By definition, redundancy (or retrenchment) occurs when what you do at the place you work is no longer required to be done – or can be made part of someone else’s job – due to operational changes in the business.
If you’re made redundant, you could be eligible to receive a ‘redundancy payout’ based on how long you’ve been at the business.
Being stood down
Being stood down is a little different. It means there’s not enough work for your employer to give you so they’re asking you to take temporary leave without pay. This is usually due to circumstances out of their control, such as the COVID-19 pandemic.
Employment awards, agreements or contracts may have other terms (with different rules) on standing down employees.
If your employer approves a request for annual leave during a stand down period, you’ll be paid for that annual leave under the employee rights set out by the Fair Work Act.
You’ll also accrue annual leave and personal carer’s leave during a stand down – and could be eligible for government entitlements in the form of a JobSeeker Payment (formerly known as Newstart).
2 actions to take with your super when you’ve been made redundant or stood down
1. Search for lost super and consider combining multiple accounts1
As at 30 June 2022, there was $13.16 billion2 in lost and unclaimed super held by the Australian Taxation Office (ATO). If some of that money is yours, now is the time to claim it.
Having more than one account means you could be paying multiple sets of fees and charges, which can chip away at your balance. By consolidating your super, you can put all of it in one place with one super fund, making it easier to manage.
2. Consider pausing any personal contributions
If you’re making after-tax super contributions, you may consider putting them on hold while you’re not working. If you’re an AustralianSuper member and need to cancel any regular debits for contributions to your super account, please contact us so we can help.
What happens to my insurance if I’m not working?
If you’re an AustralianSuper member, you may have insurance cover through your super account – including Death, Total & Permanent Disablement (TPD) and Income Protection3.
If you’ve lost your job, any insurance cover you have through your AustralianSuper account will continue for 16 months, even if you’re not having money paid into your super account.
However, if you’re still unable to receive or make a contribution after 16 months, your cover will stop. But we’ll be in touch well before this happens to help you understand other ways you may be able to keep your cover.
Now might be the right time to review your insurance and, if you think it’s necessary, adjust the level of cover to suit your needs. Just remember, if you cancel or change your insurance and reapply for cover later, you’ll need to provide health information for the Insurer to consider.
If you're not sure how much cover you may need and how much it might cost, AustralianSuper's insurance calculator can help you figure this out.
If you’re an AustralianSuper member and aren’t sure if you have insurance or how much cover you have, login to your account.
Can you claim Income Protection if you’ve lost your job?
Income Protection insurance through your super is designed to protect your income if you become disabled or ill and are temporarily unable to work. It doesn’t cover loss of income due to redundancy or being stood down.
Can you access your super early to make up for lost income?
Super is a long-term investment for your retirement, so you need to meet certain conditions if you need to access it earlier.
In many cases, you can only access your super if you’ve reached your preservation age – the age at which you can legally be paid your super. If this applies to you, you may want to consider retiring early and turn your super into a regular income – just like when you were earning a regular wage.
If you haven’t reached your preservation age, you can only access your super early if you have less than $200 in your account after leaving an employer, or if you qualify in other circumstances including:
- Severe financial hardship. If you’re struggling financially and unable to meet immediate living expenses for you and your family, you may be able to access some or all of your super before your preservation age.
- Compassionate grounds. This includes money to pay for medical expenses for you or your dependants, partial payment of home loans to avoid foreclosure, or modification of a home or vehicle for you or your dependants suffering a severe disability.
- Terminal illness or permanent incapacity. If you are diagnosed with a terminal illness or have physical or mental health issues that are likely to stop you from working again, you may be able to claim some or all of your super.
- Permanently leaving Australia. If you’re a temporary resident who has earned super while working and living in Australia, you can apply to have your super paid as a Departing Australia Superannuation Payment.
Will your super account remain open if you’re not receiving employer contributions?
Your account will remain active with AustralianSuper even if you’re not working, unless your account balance is below $6,000 and within the last 16 months:
- we haven’t received a contribution to your account; and
- you haven’t changed your insurance cover, switched your investments, made or amended a binding beneficiary nomination on your account or told us in writing that you don’t want to be transferred.
If your account meets the above criteria, it will be transferred to the Australian Taxation Office (ATO). One way to make sure your account stays with AustralianSuper is to complete the Authorisation for ATO declaration form and send it back to us.
Do you still have to pay for your super account if you're not receiving employer contributions?
While you’re not in employment and figuring out your next move, we’re still here to support you and manage your super. While your account remains active, we’ll continue to work hard to invest your super and you’ll still be entitled to get help and guidance from the AustralianSuper team. This means admin and investment fees will continue to be deducted from your balance.
If your account balance is less than $6,000 at the end of the financial year, certain fees and costs charged to you in relation to administration and investments are capped at 3% of your account balance. Any amount charged in excess of that cap will be refunded directly to your account.
If you have insurance through your super, you’ll also keep paying for this while your cover is still active.
Help you need, when you need it
AustralianSuper provides a range of support and advice options to help you make the most of your super no matter your current circumstances. From articles and fact sheets to calculators and webinars, we’re committed to helping you better understand and make the most of your super.
1. Before making a decision to combine your super, consider any fees or charges that may apply, and the effect a transfer may have on benefits in your other fund such as insurance cover. We recommend you consider seeking financial advice.
2. Total of lost and unclaimed super as at 30 June 2022. Source: Australian Tax Office (ATO): Super data update: lost, unclaimed, multiple accounts and consolidations.
3. AustralianSuper insurance is provided by TAL Life Limited (the Insurer) ABN 70 050 109 450, AFSL 237848.