Retirement
SA’s $2bn superannuation drain puts 34k residence in zero territory
Retirement
SA’s $2bn superannuation drain puts 34k residence in zero territory
More than 34,000 South Australian residences have almost emptied their superannuation coffers, as members take advantage of the government’s early access to superannuation scheme, new research has shown.
SA’s $2bn superannuation drain puts 34k residence in zero territory
More than 34,000 South Australian residences have almost emptied their superannuation coffers, as members take advantage of the government’s early access to superannuation scheme, new research has shown.
In April, the government broke open super’s preservation rules, allowing Australians who had lost their jobs or had their hours reduced to access $10,000 in super before 1 July and a further $10,000 until December, withdrawing a maximum $20,000.
Industry Super Australia (ISA) has released figures showing the damage that the early access to super scheme has done to members in South Australia, with nearly $2 billion drained from their pension funds.
The stats have revealed that 240,000 members dipped into their super, taking out on average $7,868. This, ISA confirmed, has seen 34,000 South Australian residents deplete their entire super savings.
ISA warned members who were forced to dip into their superannuation that they could be dealt a cruel blow if the legislated superannuation increases are revoked.
Analysis shows that if the super rate increase were cut, an average 30-year-old man who took $20,000 from their super would either lose $180,000 from their retirement or be forced to work until 74, while an average 30‑year-old female would need to work an extra eight years or have $150,000 less at retirement.
“Ripping it away from them would be a cruel double blow, it would leave them with far less at retirement and saddle the next generation with a whopping pension,” ISA deputy chief executive Matthew Linden told members.
“Super is not a cookie jar for the government to raid to solve short-term budget problems, nor for housing or to solve stagnant wage growth. Dipping into super early comes at a steep cost for the individual and the future taxpayers. As a society, we shouldn’t be demanding our young people pay the price again.”
Contrary to the super funds, senator Andrew Bragg has praised the “sound judgement” of Australians who have withdrawn their super under the government’s scheme.
“There was an early access scheme where people could take up to 10 grand of their super in one hit and the majority of people and most of the money that was taken out of super was put into people’s mortgages to pay them down,” he said.
“So, people wanted to improve their personal balance sheets. And that shows that people are smarter than the super funds think. I mean, the super funds, they think everyone’s stupid,” Mr Bragg told media.
The senator noted the high cost of housing in Australia, which he believes is becoming more difficult to attain due to the trade-off between a super increase and wage rises.
“It’s OK for the cigar chompers to say that, ‘You know everyone should have both’. But for many people, it’s a real trade-off, so the more flexibility that we can give people, I think is the way to go,” Mr Bragg said.
Mr Bragg called for a form of opt-in super in his maiden speech to Parliament in 2019, where he suggested middle-income earners “could simply tick a box to get a refund when filing an annual tax return”.
Mr Bragg told media that the plan for opt-in was now being “seriously considered” by the government.
“The Prime Minister has done a lot to try and help people get into their first homes. We’ve had a number of first home saver schemes. And one thing we haven’t done yet as far as we could do is to open up to super for first-time deposits, and that’s something that I think we should do, especially for low-income earners,” Mr Bragg concluded.
About the author
About the author
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more