Young people $100k worse off in retirement

The shadow assistant treasurer, Stephen Jones, said instead of receiving timely government support, “young Australians have borne the brunt of this crisis and will be forced to continue to pay the cost in years to come”.

The Labor Party, which opposed the early access to superannuation, forecasts Australians under 35 will lose $51 billion in retirement due to the scheme. 

According to the estimates, after factoring for inflation and the cost of living, a 25-year-old who withdraws $20,000 will be $80,000-$100,000 worse off in retirement. A 35-year-old who withdraws $20,000 will lose at least $65,000 at retirement. 

Meanwhile, Australians under the age of 50 are predicted to lose at least $83 billion in retirement.

More than half a million Australians (606,000) were said to have emptied their super accounts, with 494,000 of them being under 35 years old.

Mr Jones, Labor MP and shadow assistant treasurer, also noted the possibility of fraud under the scheme, saying the government is still yet to reveal how many fraudulent claims have been made or what is being done to compensate victims after their accounts have been wrongly raided.

“In May, the scheme was frozen when the AFP uncovered evidence that sophisticated criminal were using the scheme to steal super from unsuspecting Australians,” Mr Jones said.

“Hundreds of other Australians may have also faced the same issues. It is not clear how many have been hit by super thieves – because the threat was not detected by the ATO, but by an employee at a super fund.”

Government ministers are also yet to reveal how many fraudulent claims have been made or what the government is doing to compensate victims after the ATO directed their super fund to make a payment to a fraudulent account.

Mr Jones also argues that there is an alarming trend of super funds being plunged directly into online gambling.  

In June, the ATO announced it would commence investigations into individuals who had accessed the scheme on incorrect grounds.

“Poor communication and misleading promotion of the scheme – including by government senators – may mean that some have accessed the scheme incorrectly. This could leave well-intentioned individuals struggling with the costs of the coronavirus pandemic facing fines of up to $12,600,” Mr Jones concluded.

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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.

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