Superannuation: Under-35s rush to raid up to $20k from their super

More than one million young Australians have rushed to take advantage of this COVID “handout” – but it’s going to come back to bite them.

More than one million Australians have now double dipped to raid their superannuation a second time during the COVID-19 pandemic by withdrawing up to $20,000.

According to the latest figures, Australians have withdrawn a stunning $33 billion in superannuation under the early release scheme since April.

The huge cash claim is equal to the entire COVID-19 cash assistance that the Morrison Government has provided to Victoria during the pandemic which currently stands at $31 billion.

To be eligible for the government’s COVID-19 early release of superannuation scheme, you must: be unemployed, been made redundant, or had your working hours reduced by 20 per cent or more.

Data released by the Australian Prudential Regulation Authority (APRA) on Monday has revealed more than 3 million workers have claimed for the early release of super.

One in three claimants – 1.2 million workers – are “double dipping” by claiming for the early release of superannuation for a second time this year.

That means they have withdrawn up to $10,000 between April and July and then returned in the new financial year for another cash claim of $10,000.

Labor’s superannuation spokesman Stephen Jones told news.com.au that the Morrison Government was allowing a generation of young workers to wipe out their super.

“The majority of those people are aged under 35. They have withdrawn most, if not all, of their super,’’ he said.

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Prime Minister Scott Morrison’s super scheme allowed Aussies to withdraw cash from their retirement nest eggs. Picture: NCA NewsWire / Martin Ollman

Mr Jones said the fact that young workers were being forced to bear a $33 billion burden in helping to prop up the economy during the COVID-19 crisis was wrong.

“The Morrison Government has privatised stimulus by relying on superannuation. They should be looking at extending the JobKeeper and JobSeeker,’’ he said.

“It should taper off but not at a time when unemployment is going up. They cannot rely on superannuation to do the heavy lifting again because some of these workers have wiped out their super.”

More than $1 billion in super payouts were made in the first week of the new financial year, taking total payouts to $19.1bn since the scheme opened in April.

But according to the new figures that number has now jumped to $33 billion suggesting Australians are cashing out their super at a rate of $1 billion a week.

The scheme, launched on April 20, allowed Australians to withdraw up to $10,000 from their superannuation in the last financial year and withdraw a further $10,000 in the current financial year.

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Under-35s are the age group most likely to have rushed to withdraw money from their super. Picture: Supplied

The average amount applied for by applicants was $7,402. But for struggling workers double dipping into super the average amount claimed was higher at $8,426.

But there are concerns that thousands of workers who have applied for the quick cash could have done so illegally because they don’t meet the criteria.

ATO Deputy Commissioner Will Day has previously warned of tough penalties for those who breach the rules.

“We know the overwhelming majority of Australians are honest, and we’ve worked hard to help those people who are impacted by COVID-19 as quickly as possible.”

“We also have an important role to ensure the integrity of the stimulus measures and when we uncover fraud or people seeking to exploit them, we’ll take action, as we know the community would expect us to do.”