Nearly 2.5m access early release of super

Nearly 2.5 million Australians are likely to access the early release of super before 30 June and there could be nearly as many again requesting it after the new financial year, according to a report from the Association of Superannuation Funds of Australia (ASFA). 

The ‘Experience to date with the early release of superannuation’ report found Australians under 35 had accessed the scheme in the greatest numbers, while Queensland, WA and Northern Territory residents applied by most. 

The maximum of $20,000 available over two tranches per employee under early release exceeded the total maximum payments per employee for JobKeeper, which was $19,500 but only for six months. 

Over 20% of the labour force and 15% of the total of individuals with a super account were expected to receive early release payments. 

The report also noted that in 2017/18, women aged under 35 had a total of $53.5 billion in super while men had $69.8 billion. 

Compulsory super had resulted in employees under 35 having additional savings approaching $100 billion in total, which was an average of $22,000 per person. 

ASFA chief executive, Dr Martin Fahy, said: “The erosion of retirement balances through the early release scheme reinforces the need to move as soon as possible to a Superannuation Guarantee rate of 12% in order to provide adequate retirement savings for individuals, particularly women and younger Australians”. 




Author

Comments

Comments

Allowing those in need - especially younger members most heavily impacted by the economic effects of Covid-19 - to access up to $20k tax free of their super savings is fantastic. But as we know this will have a detrimental impact to their retirement outcomes due to reducing savings and compounding growth, and is merely kicking the can down the road. I’d love to see a conversation about enabling those withdrawals to be reinvested back into super tax free as well to help protect these vulnerable members retirement outcomes. Super is a tax incentivised savings scheme, and those earning the most are already able to benefit the most. Let’s make sure that the incentives are there for the lower income earners and financially vulnerable, as arguably they need super the most.

Add new comment