The government recently announced individuals in financial stress as a result of COVID-19 will be allowed to access up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21.
They will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020, and will also be able to access up to a further $10,000 from 1 July 2020 for another three months.
However, Industry Super Australia said the scheme has the potential to increase the administrative burden on funds, and co-ordination with the government and the Australian Taxation Office will be vital to ensure it operates efficiently.
It also noted that the last thing anyone wants is for stressed members to face prolonged delays for access to their super due to administrative bottlenecks.
“For some members, their short-term financial survival might rely on the ability to access the up to $20,000 from super that the scheme allows,” ISA said.
“But accessing superannuation early should be approached with extreme caution and only as a last resort.”
ISA said its analysis shows that a 20-year-old who accesses the full $20,000 available under the scheme could lose more than $120,000 from their retirement balance; a 30-year-old who accesses $20,000 from super now could lose about $100,000 when they hit retirement; and a 40-year-old could lose more than $63,000.
It also said that the government has provided a significant program of wage stimulus measures, including increasing welfare support payments, which members should consider exhausting before tapping into their super.
Industry Super Australia chief executive Bernie Dean said some members will have lost their jobs or had their hours dramatically reduced.
“Members should tread carefully and only think about cracking open their super after they’ve taken up the extra cash support on offer from the government — super should be the last resort, given the impact it can have on your retirement nest egg,” Mr Dean said.
“Members need to know that taking your super now is like selling a house at the bottom of the market — you’ll lose money you would probably claw back overtime.”
What a pig industry super is. It’s not their money it’s ours. And it’s a gift. People with business pay it.
We needed the money now. Not in 40 years. Industry super are purposely scaring people that the government would wipe the pension.
Easy for some guy that works in a office and never lost 1 cent due to the pandemic to blame the government for trying to help people.
Not only are there ads disgusting, they are also scare tactics that people would need to sell their home.
Goes to show how pathetic industry and what a pig Bernie is.
Industry funds just trying to defend a run on cash reserves.
$20,000 turning into $120,000???? Total rubbish, a lie that has been propagated for too long. It’s the financial planners and super industry employees that benefit from our super. On average over the years, tax, losses and fees have eaten up any annual profit my super has made. My super balance pretty much equates to my 20 years of contributions. Earnings over 20 years have been offset by losses, tax and fees.
you should have used the services of a good financial planner rather than being stuck in your prejudices.
SMSFs are an excellent vehicle for facilitating early access to super – just look at all the trustees who’ve been disqualified!
A 20 year old with 20k in super!!! Maccas pay must have gone up a lost since I worked there