Early Release of Superannuation Benefits - guidance for mortgagees (lenders)
A person may seek the early release of superannuation benefits on the ground that a mortgagee (lender) is about to sell their home or foreclose a mortgage over their home.
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This page provides information for mortgagees (lenders) to help you understand what is required to satisfy these grounds.
Under Regulation 6.19A(1)(b) of the Superannuation Industry (Supervision) Regulations 1994 (the Regulations), a person may apply to the Department of Human Services for early release of superannuation benefits on the ground that it is required to make a payment on a loan, to prevent:
(i) foreclosure of a mortgage on the person's principal place of residence; or
(ii) exercise by the mortgagee of an express, or statutory, power of sale over the person’s principal place of residence.
To approve applications on mortgage grounds, we must have the specific information required under Regulations 6.19A(5) and 6.19A(6) before we can be satisfied that a release should be made.
Documentation you need to provide
Documentation you need to provide to apply for an early release of superannuation for a mortgagee (lender).
You will need to provide documentation that states all of the following information:
- advice that, as at a certain date, payment of a specified amount is overdue
- advice that if the mortgagor (borrower) fails to pay the amount due by a certain date, the mortgagee will:
- commence or continue enforcement action to foreclose the mortgage
- exercise an express, or statutory power of sale over the security property of the person's principal place of residence
- the street address of the property
- the amount that is equal to three months repayments under the mortgage
- the amount that is 12 months interest on the outstanding balance of the loan at the time the statement is made
- the mortgagee name and account number for the loan
The information required from the mortgagee may be set out in a single letter or document, or in separate letters or documents, provided we receive it all. Where the property under threat of sale is secured by more than one loan, this information must be provided separately for each loan in arrears.
You may need a statutory notice of default
Documentation from mortgagees must be clear about the mortgagee's intention to continue or commence enforcement action. The best evidence of this is a statutory notice of default. This information can also be provided in a written statement from the mortgagee. This statement must clearly show that the mortgagee does intend to take such action. Using phrases such as 'may proceed', 'may be entitled to commence', or 'reserve the right to proceed' is not considered sufficient. The legislation requires the mortgagee to state that if the borrower fails to pay the overdue amount, the mortgagee will:
- foreclose the mortgage on the person's principal place of residence, or
- exercise its express, or statutory, power of sale over the person's principal place of residence.
Principal place of residence
A person' principal place of residence generally means the residence where a person dwells permanently or has dwelt for a considerable period of time. Rental and investment properties and holiday homes are generally not accepted as being a person's principal place of residence. Where a person has more than one property, both of which are secured by the same loan, it must be clear in your documentation that the property where the person dwells is the property that is facing threat of sale.
Responsibility to repay the mortgage
A release may only be approved for a person who is responsible for paying the mortgage over their principal place of residence. Where the responsible party listed on the mortgage is in the name of a trust or company, a release cannot be made.
More information about the early release of superannuation
For more information on the early release of superannuation please call 1300 131 060.