The Government and superannuation funds need to make clear to super members that there are other hardship programs other than the early access scheme, according to a lawyer.
Berrill and Watson principal, John Berrill, told Super Review that it was clear super members who accessed the first tranche of the government’s scheme for those in financial hardship due to COVID-19 were taking out very specific amounts and were thus clearly paying off debt.
Berrill said there were many other hardship alternatives people could use without tampering with their super.
“All banks have got hardship programs which can get some debts waived, or mortgages deferred, and if people are with an insurance company there are insurance premium deferral payment plans, and tenants can’t be kicked out by a landlord,” he said.
“The National Debt Helpline is also a great resource that people can use to get free financial counselling to help debts get waived and access to discounts.
“A lot of people don’t know about these things and they think they need to get money quick smart and the only way to do it is the early access scheme.”
Berrill noted that banks and insurance companies had been “falling over each other” to be supportive of customers with problems induced by COVID-19.
“The government and the tax office needs run a campaign to tell people there are alternatives and to steer them in the direction or organisations like the National Debt Helpline as taking down $10,000 in super now could cost $50,000 in retirement,” he said.
Super funds would need to notify members prior to members applying for the hardship scheme as it was applied to the Australian Taxation Office rather than the super fund itself.