The whole point of superannuation is to lock money away until you retire but what if you fall on hard times before then? Most super funds will release some of your nest egg before retirement but only if you fall into one of four categories.

The main one is severe financial hardship. The legislation says this is someone who has been receiving a Commonwealth income support payment, such as unemployment benefits, for at least six months and who is unable to meet their reasonable living expenses.

The other categories cover payments to ease health or financial problems, such as critical health treatment, nursing care if you are dying or mortgage repayments if the bank is threatening to repossess your home.

(If you have fallen behind in your mortgage repayments the bank can sell the house to ensure the loan is repaid).

It sounds pretty straightforward and the Australian Prudential Regulation Authority (APRA) says most people can fill out the forms themselves.

Gold Coast businessman Tim Barritt, however, says most people need help to apply for the early release of their superannuation. His company, Super Release, charges up to 10 per cent of the amount released to prepare the application.

Mr Barritt's view is that it is up to the individual to decide whether to pay a fee for someone else to do it, just as people may choose to pay an accountant to do their tax return.

He says he receives 50 to 60 phone calls a day, many from people who are daunted by the forms and the supporting evidence (such as letters from doctors or from the bank) required to apply for early release.

"APRA don't like what we do," he says. "But we have found so many people out there who can't deal with it themselves.

"For mortgage arrears they'll need a letter of default and a letter of foreclosure, for medical treatment they'll need specialists' letters."

Mr Barritt says that Super Release, which has been operating for five years, has helped 6500 people access their super early, including many people who have previously been refused.

His desire to help people get hold of their super landed him in trouble two years ago, when he was convicted of forging documents for an early release application by a client.

Mr Barritt agrees that he "altered some documents" after a client's application was knocked back but he says everything is now done "by the board".

Questions of forgery aside, APRA is taking a keen interest in Mr Barritt's activities.

In a media release issued last month, APRA chief executive Graeme Thompson says: "We are very concerned that companies are charging needy clients fees for making applications for early release of their superannuation benefits. People facing exceptional circumstances may apply directly to the APRA for the early release of superannuation benefits, after checking their fund's regulations. The rules for early release are quite clear. An intermediary is not necessary."

A senior manager at APRA, Roger Brown, says the application process is quite simple and APRA has a call centre to help people fill out the forms.

"We aim to provide a very high level of customer service because people making the application are often quite stressed," he says. "We understand that they need a quick decision, even if the answer is no."

(APRA approval is not required for the severe financial hardship category: the applicant needs a letter from Centrelink stating that they have been on benefits for at least 26 weeks continuously, then it is up to the super fund to decide whether to release funds. All other categories require approval from APRA).

Mr Brown says that APRA's service standard requires 90 per cent of calls to be answered within 10 seconds (by a human). He says that if there is a problem with an application, the assessor will ring the applicant straight away, rather than getting bogged down in letters.

APRA receives about 45 applications a day and about 60 per cent are approved. Mr Brown says more than half involve likely repossession of the family home.

Of Mr Barritt's activities, Mr Brown says: "These intermediaries market themselves as providing a service. Our view is, it is not needed."

Mr Brown also questions Mr Barritt's claim that Super Release has helped clients who have previously been knocked back. "I'm not aware of a single instance where we have refused a benefit and then there has been a successful application through Super Release," he says.

The chief executive of the Association of Superannuation Funds of Australia, Philippa Smith, says her sympathies lie with APRA in its stoush with Mr Barritt.

"Superannuation is accessible - in exceptional circumstances - without a third party," she says.

She urges people to think long and hard before trying to dip into their retirement savings, with or without help from an intermediary.

"The main policy behind superannuation is that it is to help people save enough for their retirement. It's a big issue because we are living longer and social security is not going to be enough."

Ms Smith says a review of the rules governing early release of superannuation was announced last month, to make sure the requirements are fair.

At present, the financial hardship category allows a maximum of $10,000 to be withdrawn in one year, the foreclosure category allows the release of three months' mortgage repayments and 12 months' interest on the outstanding loan, and the illness categories require APRA to determine a single lump-sum amount that is reasonably necessary.

"It's a fine balance," she says. "The most benefit is obtained by leaving the money there (in a super fund). If we allow people to dip into it too easily, it won't meet the primary objective of making more people self-reliant."

When you can apply for the early release of super

• You suffer severe financial hardship;
• Your home is in danger of being repossessed by the mortgagee;
• You need critical medical treatment which is not readily available through the public health system; or
• You have a terminal illness and must pay for palliative care.

Then contact the Australian Prudential Regulation Authority on 1300 131 060 or go to its website at www.apra.gov.au for more information.

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