What financial hardships qualify for a hardship distribution?
The Plan uses the IRS’s definition of financial hardship. They are defined in the IRS regulations as:
- Payment of un-reimbursed medical expenses incurred by the Participant, his/her spouse or dependent children, not covered by an Employee Welfare Plan, governmental plan or other third party funding.
- Payment of tuition and related educational fees, and room and board expenses, for the next twelve months of post-secondary education for the Participant or the Participant’s spouse or dependent.
- Payment necessary to prevent foreclosure on a mortgage on the Participant’s principal residence or eviction from the Participant’s primary residence.
- The purchase of a primary residence.
- Funeral expenses of an immediate family member, (spouse, child or parent) of the Participant.
- Repair expenses for damages to principal residence incurred as a result of sudden catastrophic events (i.e, hurricanes, floods) that qualify as a casualty loss under IRS rules.
I have not had voluntary deductions from my weekly paychecks, but my employer is contributing $0.80 per hour to my Annuity & Savings Account. Can I make a hardship withdrawal?
You must have a voluntary account balance. Employer contributions are not eligible for hardship withdrawal.
I am in financial trouble, and I have a large balance in my Annuity & Savings Plan. Can I make a hardship withdrawal?
A Participant cannot withdraw from the voluntary account balance just because money is needed. A hardship withdrawal may only be made for the six financial hardships described above.
I am behind in my rent or mortgage, but I have not gotten an eviction or foreclosure notice. Can I come in with my statement of account?
You must have an eviction notice or a foreclosure notice. The notice must actually use the word 'foreclosure' or the word 'eviction' and give a set deadline date or a number of days until action will be taken. Simply being behind on mortgage or rent payments does not qualify.
I am facing foreclosure, and I am also very behind in all my bills. Can I make a hardship withdrawal?
Only the amount to avoid eviction or foreclosure or one of the other financial hardships is eligible. If a person is behind on a car loan, credit union loan, utility bills, etc. those items do not qualify.
My roof needs to be replaced due to age, and my wood trim is rotting due to the rain. Does this qualify for a casualty hardship?
A casualty is defined under IRS rules as a sudden and unexpected event. A gradual weakening of a building due to normal wind and weather conditions is not a casualty. Rotting wood or mold are not considered casualties as they did not occur suddenly. However, a roof damaged by a falling tree suddenly IS considered a casualty. IRS guidelines require a denial of coverage by the homeowner’s insurance company to be submitted with a hardship application.
What forms do I need to bring with me? Back to Top
- Hardship statement, with the box checked for one of the six financial hardships,
- Spousal waiver in front of a notary, if married.
- Foreclosure/eviction or one of the other ‘worksheets’ and
- All the required proof as explained on the "Worksheet."
Where can I get a hardship distribution application?
Forms for a hardship application may be printed from the HRSA-ILA website or by calling the IVR phone system at 757-423-3090 or by calling Participant Services at 757-457-7090.
I am married. Does my spouse need to come with me?
No, as long as the notarized Spousal Waiver is brought to the appointment.
Why do I have to wait 24 hours to get an appointment?
Twenty-four hours is needed to obtain the amount of your voluntary contributions from MassMutual and to check your application to verify that you have submitted all required information and forms.
After my hardship distribution is approved, how long does it take to get my money?
You will receive your distribution in the mail within eight business days from the time your application is approved by HRSA-ILA.
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