There has been a high-level of enquiries from financial advisers on the Government’s financial relief measures for those affected by COVID-19, including early access to superannuation eligibility, according to the Colonial First State.
The early access to super measure, allowed eligible people to access up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21, as well as providing additional social security support, a support to employers to help them keep more Australians in employment and allowing retirees to preserve capital by reducing the minimum drawdown requirements for account based pensions and term allocated pensions.
CFS Technical Services manager, Craig Day said that it was important that people were fully informed about the policy and consider the potential impacts on their super before they decide to access it.
The main questions being asked by financial advisers regarding the government’s new measures included:
- Understanding the expanded eligibility rules for the JobSeeker payment and entitlement to the coronavirus supplement;
- Which employers will qualify for the JobKeeper payment and what that means for their employees;
- How the reduction in the account based pension minimums will apply for the remainder of 2019-20 and in 20220-21; and
- In what situations members will qualify for early access to their super and where they won’t.
Day stressed that for many Australians this would be the first time they were interacting with the social security system or were able to withdraw money from superannuation.
The firm said it had received a number of questions on how members could register their intention to claim social security benefits so they could qualify for the one or both $750 Economic Support Payments, or the $550 per fortnight coronavirus supplement and that people were also looking on how the partner income affected the applicant’s social security payment rates.
“Getting on top of all these announcements and understanding what they mean for different people in different situations has been incredibly important,” Day said.
Following this, he there could be some unintended consequences for some members.
“For example, fully withdrawing a small balance could result in the inadvertent cancellation of a member’s salary continuance, life and total and permanent disability insurance,” he said.
CFS noted its team of technical superannuation experts were helping advisers understand the latest regulation and law changes.