Retirement
Senator defends early access to super scheme
Despite early access to superannuation nearing Treasury limits and reports that members are spending their money on discretionary items, senator Jane Hume has reiterated that the policy has helped millions of Australians.
Senator defends early access to super scheme
Despite early access to superannuation nearing Treasury limits and reports that members are spending their money on discretionary items, senator Jane Hume has reiterated that the policy has helped millions of Australians.
Almost 350,000 Australians have double-dipped into their retirement savings, claiming ongoing financial hardship due to the coronavirus pandemic.
Figures released by the Australian Prudential Regulation Authority show that 345,000 people have made repeat applications to access their superannuation early, for an average payment of $8,904.
The early release of super was implemented by the federal government as a financial measure to support Australians during the coronavirus pandemic.
It gives Australians the ability to request up to $10,000 in both the 2020 and 2021 financial years.
As of 5 July, $19.1 billion had been paid to approximately 2.7 million account holders, with APRA estimating new requests will sap the superannuation sector of roughly $23.3 billion.
Critics have argued that accessing your superannuation should be a “last resort” only, after it was revealed by Industry Super Australia (ISA) that about 480,000 Aussies had completely spent their nest egg and that accessing cash now would have dire long-term consequences for retirement.
A 60 Minutes report showed some Australians who have withdrawn $10,000 from their superannuation splashing the cash on “non-essential luxuries” like plastic surgery and new cars.
One case study on the program, Cassandra Garcia, put the cash towards a “series of surgeries” that included a boob job and liposuction on her torso, legs and chin – purchases that she deemed “essential” to her own self-confidence.
The 60 Minutes story followed an Alpha Beta and Illion report, which found that members were using the additional cash on consumer goods.
A sample of 13,000 people who accessed their super under the early release scheme shows that 64 per cent of spending went on discretionary items such as clothing, furniture, restaurant food, gambling and alcohol.
However, the Assistant Minister for Superannuation, Financial Services and Financial Technology, senator Jane Hume, defended the scheme, which has helped people during a hard time.
“The average home loan at CBA is $450,000, current variable rates are 2.29 per cent – that’s interest of $10,000 so one withdrawal of early release is enough to keep an average family in their home for a year. The vast majority have withdrawn because they are in financial hardship or they have created a buffer in case they are in hardship.
“Along with the number of people that have withdrawn the money, there’s an economic theory called revealed preference, so this revealed preference about ‘when I’m in trouble, I need this money now rather than locking it up for 40 years’, that’s pretty powerful,” she 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