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:
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.
In a Senate submission, the Financial Services Council said super funds should be able to nudge members on engaging with their super and has cautioned against default placements.
The Joint Associations Working Group, which counts FSC in its ranks, has issued an urgent warning to the government.
Senator Jane Hume will join the speaker lineup at the inaugural Australian Wealth Management Summit.
New research from ART has found less than a third of women feel their superannuation is in a good position, reiterating the importance of opening up the advice arena to super funds.
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