Retirement
COVID-19 support measures see thousands withdraw super early
The Australian government has confirmed that more than $3.8 billion has been withdrawn from Australian superannuation accounts, with members taking advantage of the government’s early access.
COVID-19 support measures see thousands withdraw super early
The Australian government has confirmed that more than $3.8 billion has been withdrawn from Australian superannuation accounts, with members taking advantage of the government’s early access.
The announcement follows the Morrison government’s recent changes to superannuation policy, which allowed members to withdraw up to $10,000 in this and the next financial year.
“In terms of the early access to super, the ATO – the Australian Taxation Office – has approved 456,000 applications totalling $3.8 billion. Those applications are now with the superannuation funds for their payment over the next five days,” Mr Frydenberg stated.
Prime Minister Scott Morrison announced that the government had hired an additional 3,000 roles at the ATO to help cope with large demand.
Mr Morrison thanked the public for understanding the additional time taken to process claims as they reached a “historic level” throughout the crisis.
“Their patience is helping those staff get through those claims and achieve these highly ramped-up levels of claim processing, which means we can get that support to Australians quicker,” he said.
While the government previously announced that it believes that 1.6 million people will apply for the early access to super scheme, which in total would see $27 billion withdrawn from the system.
Is it worth accessing your superannuation early?
BDO superannuation partner Mark Wilkinson warned against rushing into a decision: “While accessing your super right now might provide some relief if you’re facing significant financial pain, there should be a big, red ‘Proceed With Caution’ sign warning that your future self will pay the price for this move.”
“There have been similar arguments in recent years for accessing super as a way of helping first home buyers get into the market. But the numbers just don’t add up,” Mr Wilkinson said.
“Although $10,000 doesn’t sound like a lot, for a person who is 25 who loses their job due to COVID-19, that $10,000 today could be worth $160,000 when they retire in another 40 years.
“Some people may find the ability to access their retirement savings early necessary, but they should weigh up the long-term effects on their retirement savings by doing this.”
“If you qualify and you do decide to withdraw funds from your super, you need to be mindful that it’s not so easy to replace your retirement savings and you’ll be playing catch-up for a few years to come.”
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