Retirement
Super should be a last resort
A superannuation industry body is urging Australians facing financial hardship to access all other sources of income support measures before tapping into their super.
Super should be a last resort
A superannuation industry body is urging Australians facing financial hardship to access all other sources of income support measures before tapping into their super.
The Australian Institute of Superannuation Trustees’ (AIST) CEO Eva Scheerlinck has conceded that the organisation is “acutely aware of the significant upcoming need for a large number of members of our funds to be provided with income support due to the impacts of COVID-19 on their income”.
However, she said the federal government announcement regarding new superannuation early release provisions would have “potentially far-reaching implications both on individual Australians and the broader national economy”.
In a fact sheet from the Treasury outlining the early access to superannuation measures, the government said it has recognised that “for those significantly financially affected by the coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings to retirement”.
The move forms part of the government’s second stimulus package announced on Sunday.
“To ensure good long-term outcomes for all Australians as well as the wider economy, accessing superannuation should be done as a last resort,” Ms Scheerlinck flagged.
In addition, “the mechanism by which members’ savings are accessed should avoid locking in current losses for members, and be administratively tenable”, Ms Scheerlinck said.
The CEO said the AIST will be working closely with member funds, the government and regulators to address administratively challenges and risks that “will need to be overcome and mitigated for income support measures to be implemented in an orderly and effective way”.
Since the new measures will significantly broaden the eligibility requirements for the early release of super, Ms Scheerlinck said they can only be effectively administered by the ATO.
The new policy allows individuals affected by the coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
The AIST said it is working with member funds to explore other opportunities with superannuation to assist the community in “these difficult times”.
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