Almost 2 million payments have now been made under the early superannuation access scheme, with the total approaching $15 billion.

APRA data published on Monday, 15 June, showed that early super payments up to 7 June had totalled at $14.8 billion, with 1.98 million applications out of 2.12 million having been paid out. 

Over the week to 7 June, super funds made payments to 167,000 members, for a total value of $1.3 billion – the same amount that had been paid the week prior. 

According to BetaShares CEO Alex Vynokur, the vast majority of withdrawals are for younger Australians, meaning they will miss out on long-term compounding.

“Superannuation funds should not be used as an ATM when times get tough. I understand that these are unprecedented times and many Australians are facing real financial difficulties,” Mr Vynokur said.

“But it is a shortsighted policy that will result in a short-term sugar hit to those affected at the expense of their super balances in 20 or 30 years’ time.” 

“The data tells us that the vast majority taking up this offer are under the age of 30. They have at least 30 years of compounded earnings they are missing out on by taking money out now.”

Mr Vynokur also highlighted how much of the funds have been wasted by Australians who have used it on discretionary spending.

“Recent data from AlphaBeta shows the majority of the money being withdrawn from super funds is being spent on debt repayments and gambling. This is extremely concerning and shows a major lack of financial education and financial literacy among working age Australians,” he noted.

However, AustralianSuper’s chief investment officer, Mark Delaney, believes the early access to superannuation scheme has been a success.

During a recent Bloomberg seminar, Mr Delaney said: “I think early access has gone really well. AustralianSuper has had over 300,000 requests, they have been processed quickly and we have paid out $2.2 billion to people who need that money.”

In addition, Mr Delaney conceded that while it is helping Australians in the short term, it has come at the consequence of longer-term saving.

“It is something that [members] will have to be conscious about and rebuild as quickly as possible, but it has gone well,” he said.

Did you enjoy this article? You may also be interested in:

• It’s not for the government to tell people how to spend their money: Hume

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• Why an income stream could lessen your superannuation anxiety

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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