Australians are rushing to access super early but many balances are falling, leaving less cash
Desperate Australians are rushing to access their superannuation to help cope during the COVID-19 but many are ending up with smaller balances as applications get processed.
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Exclusive: Desperate Aussies raiding their superannuation are battling the clock as sharemarket falls eat away their money quicker than they can get to it.
Members hit financially hard by the coronavirus are complaining they cannot get their cash fast enough as they rush to access up to $10,000 this financial year.
Latest figures showed 527,000 applications for early access to super, on hardship grounds, have already been approved by the Australian Taxation Office totalling $4.4 billion.
Self-employed Lawrence Walker, 51, who runs Frankston Window and Cleaning Service has rushed to access his super from his Colonial First State account.
He said his overall super balance had drastically fallen in recent weeks.
“About two or three weeks ago I had $20,000 in super and now that’s dropped to just $16,000,” Mr Walker said.
“I can’t believe my balance has dropped four grand.”
Mr Walker received his money on Friday and immediately put it towards paying down a longstanding credit card debt totalling $14,000 and attracting interest of around 20 per cent.
This will help ease the financial pressure he is under, since demand for his business fell.
“Every time I went food shopping I was just shovelling expenses onto my credit card, I was using it just for living,” Mr Walker said.
Adelaide cleaner Candie Hiern, 30, who has super with Hostplus said her balance had also been plummeting.
“While I’m waiting for the fund to release my money my balance keeps dropping,” she said.
“I applied for $9200 but each day my balance keeps drops, they are holding money and I’m losing out.”
InvestSMART’s chief market strategist Evan Lucas said the volatile sharemarket has hit super fund balances in recent months.
“Markets are moving around every day, these are unprecedented and accessing your super early before retirement is extraordinary,” he said.
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“People’s balances will constantly be moving and super was not intended to be withdrawn all in one go and away you go.”
The All Ordinaries Index dropped by up to 37 per cent from late February through to late March before bouncing back slightly, while US shares fell up to 34 per cent during the same period.
Many Australians’ super balances are invested in domestic and global shares.
Superannuation Minister Senator Jane Hume said it was a “very challenging time for all Australians” but said super 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.
It expected most funds will process the early access to super applications within five days of receiving them from the ATO.
Eligible Australians who have lost their jobs or had a significant drop to their income can yield $10,000 this financial year and another $10,000 next financial year.