Superannuation funds hand over hundreds of millions of dollars in retirement savings due to early release
More than $4.4 billion has been released to Australians who have raced to access their superannuation early. And there’s one key thing you must check before applying for a withdrawal.
Super
Don't miss out on the headlines from Super. Followed categories will be added to My News.
Cash-strapped Australians have rushed to access their retirement savings early and some of the nation’s biggest super funds have already paid out hundreds of millions of dollars.
The early access to super scheme began processing applications just one week ago and already the Australian Taxation Office has received more than 527,000 applications.
Of these a total of $4.4 billion has been released early.
New figures show AustralianSuper – who has more than 2.1 million members – has received more than 85,000 members requesting $650 million – or an average of $7650 each.
AustralianSuper’s Group executive of member experience Shawn Blackmore said today alone they had paid out $319 million to 40,000 members.
But he warned members to check their up-to-date fund balances before applying with the ATO to ensure they had sufficient funds to make withdrawal requests.
“Before applying it is important members log into their online account to check their balance,” Mr Blackmore said.
“If their super balance is less than what they’ve requested, they will only receive the available amount.”
At the time of announcing the new COVID-19 relief scheme Treasurer Josh Frydenberg said it was the “people’s money” and they could access it if they met eligibility requirements.
Applicants can access $10,000 this financial year and another $10,000 next financial year.
New figures from Hostplus – who has more than 1 million members – showed up until Friday they received 84,600 claims under early release and had paid about $603 million.
The average claim was $7130.
But Mr Blackmore warned that super was a long-term investment and accessing super before retirement comes at a significant cost.
“Some of that cost is the foregoing of future earnings for some members, the cost may materially impact their income in retirement,” he said.
“For example, a 25-year-old who withdraws $20,000 could see a reduction of their retirement balance by over $64,000.”
Eligible Australians who have lost their jobs or had a significant drop to their incomes can apply to access super early.
Superannuation Minister Jane Hume told News Corp now was a “very challenging time for all Australians” and for those applying to access super early money was being handed over as quickly as possible.
“I am pleased that money has begun to flow into accounts and I am encouraged the super funds have delivered when their members need it most," she said.
MORE NEWS:
The trap leaving Australians with less superannuation to access
Australians warned not to double-dip in accessing their super early
ASX takes a dive as NAB halts trading
Aussies warned against X-rated COVID-19 cash fix
Funds have an obligation to hand over money to members within five business days of receiving the approved application from the ATO.
To apply for early access visit myGov and click the link “Government support for coronavirus”.
The Federal Government has forecast that 1.6 million Australians will access their super early and withdraw $27 billion.
Originally published as Superannuation funds hand over hundreds of millions of dollars in retirement savings due to early release