How to access another $10,000 in superannuation fast
Two million Australians rushed to access their superannuation early as part of virus stimulus rules and soon many people will be able to withdraw a further $10,000. Here’s how.
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Cash-strapped Australians have a second opportunity to tap into their superannuation from July 1 but are being warned of the ramifications if they do so.
Under the Federal Government’s early access to superannuation scheme that started in April, more than 2.2 million applications have been approved and $18.5 billion has been withdrawn.
The average amount accessed per person is about $8400.
Eligible applicants who have suffered a significant hit to their income have been able to access $10,000 this financial year and another $10,000 from this Wednesday – the start of the new financial year.
But Industry Super Australia’s chief executive officer Bernie Dean said while some people needed to urgently access their super it must be thought through carefully.
“We are encouraging people to think carefully about tapping into their super, especially if they have done so already,” he said.
“It does come with a pretty hefty price tag … but we recognise that young people don’t necessarily think about the long-term.
“We also recognise they may not be in a position to make up the lost ground themselves.”
To make sure your application is processed quickly firstly check you have sufficient funds to withdraw from your account – the best way to do this is to login online via our fund’s member portal.
Check your Australian bank account details are also up to date – only Australian accounts are accepted.
Be aware you are only able to submit one application for COVID-19 early release of super per financial year and applications do take time to process.
The Australian Prudential Regulation Authority said it can take up to four business days for the ATO to process an application.
Then from here funds have a guidance that the approved application must be processed within five business days, however in some instances it can take longer.
Once this is completed the money is transferred to the member.
But Mr Dean warned draining super balances could also “wipe out” a person’s insurance cover and leave Australians exposed if something went wrong, for example if they became injured or sick.
Figures from the MoneySmart calculator show for a 30-year-old withdrawing $10,000 now, once they retire at age 67 it would be equivalent to $21,500 in lost savings.
The Association of Superannuation Funds of Australia’s chief executive officer, Dr Martin Fahy, said Australians should consider all their options before tapping into super.
“We encourage people to prioritise the Federal Government’s assistance, JobSeeker and JobKeeper, and really only access early release as a last resort,” he said.
“Look to take up the reliefs that are available from financial institutions and landlords.
“Drawing down on your super early will have a substantial impact on your long-term retirement savings and the more you take out the greater that impact will be.”
But for those who do decide to withdraw up to $10,000, Dr Fahy said they needed to be “cautious and prudent with the money they do draw down”.
“Look to try and make those funds last as long as possible,” he said.
“Use them only for the essentials. It should be there as a buffer to meet financial commitments in the coming weeks and months.”
ELIGIBILITY REQUIREMENTS
• Eligible citizens and permanent residents of Australia or New Zealand can access $10,000 in the 2019-20 financial year and $10,000 in 2020-21 financial year.
• Eligible temporary residents can only apply once to access up to $10,000 in the 2019–20 financial year. They cannot apply again.
• Applications can be submitted online through the myGov website.
• Applications for the second tranche close on September 24.
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