Australians withdrew $20.1 billion in superannuation until June 30
Millions of Australians have rushed to access their superannuation early under the government’s controversial scheme. These are the people most likely to be dipping into their retirement savings.
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Struggling Australians living in the nation’s eastern states made up about 80 per cent of all applicants withdrawing their super early, new data has found.
Four in five cash-strapped Australians who rushed to access their retirement savings prematurely last financial year were from NSW, Queensland and Victoria.
The Australian Taxation Office’s early release of superannuation figures released this week showed that of the first tranche of withdrawals made up until June 30, in these three states applicants withdrew $15.6 billion.
In total 2.453 million applicants took out $20.1 billion.
Under the scheme applicants who suffered a significant income hit or were made redundant were able to access up to $10,000 tax-free until the end of June.
In NSW 738,100 applicants withdrew $5.98 billion, followed by Queensland with 616,800 at $5.19 billion and Victoria with 556,700 applicants who withdrew $4.47 billion.
Those still struggling during the pandemic are able to access up to another $10,000 tax free through until December 31.
Treasury predicts Australians will withdraw $42 billion by the time the scheme closes.
The Australian Institute of Superannuation Trustees’ chief executive officer Eva Scheerlinck said “far more super had been accessed” under the scheme than first forecast by the government.
It was originally tipped $27 billion to be withdrawn but already this amount has been overtaken with more than $34.4 billion withdrawn by 2.79 million individuals to date.
“This will unfortunately have long-lasting consequences for those who can least afford it – women, low paid workers and those who have insecure jobs,” Ms Scheerlinck said.
“The early release scheme has forced many people to choose between poverty now or poverty in retirement.”
Debate continues to rage over where the legislated compulsory superannuation guarantee should rise to 12 per cent by 2025.
It’s scheduled to increase in July 2021 from 9.5 per cent to 10 per cent and then in increments every 12 months, but there’s been a growing group of people including the RBA governor Philip Lowe who have warned against the dangers of increasing the rate.
“It will certainly have a negative effect on wages growth,” he said.
“If this increase goes ahead, I would expect wage growth to be even lower than it otherwise would be.”
The Association of Superannuation Funds of Australia’s chief executive officer Dr Martin Fahy said accessing super early could cause significant financial harm and said the compulsory super rate should climb as planned.
“The unwarranted erosion of the retirement savings of millions of Australians through the early release of super reinforces the need to raise the superannuation guarantee to make sure Australians retire in dignity not despair,” he said.
EARLY RELEASE OF SUPER STATISTICS
State Applications Percentage Amount withdrawn percentage
NSW 738,100 30% $5.98 billion 30%
Qld 616,800 25% $5.19 billion 26%
Victoria 556,700 23% $4.47 billion 22%
WA 279,800 11% $2.37 billion 12%
SA 130,300 5% $1.09 billion 5%
Tasmania 47,700 2% $390 million 2%
NT 34,400 1% $275 million 1%
ACT 23,000 1% $185 million 1%
TOTAL 2,435,100 100% $20.14 billion 100%
Source: Australian Taxation Office, 30/6/2020.