Early superannuation payments near $16bn, says APRA

A new wave of requests is expected to hit the country’s superannuation sector in the coming 2021 financial year.

AustralianSuper has had the largest number of withdrawal requests, with 283,986 members already being paid a total of $2.13bn.

Early superannuation withdrawals are poised to surpass $16bn, as the sector prepares for a new wave of COVID-19 assistance requests to hit early in the 2021 financial year.

The latest withdrawal figures, released by the Australian Prudential Regulation Authority on Monday, showed $15.9bn has been siphoned from the country’s near $3 trillion retirement pool, by workers claiming financial hardship.

As at 14 June, 2.3 million fund members had applied for withdrawals through the federal government’s COVID-19 support measure, each requesting on average a payment of $7486.

The Morrison government implemented early release in April as a support mechanism for Australians unemployed or experiencing a reduction in working hours.

The scheme was met with scrutiny over its lack of initial documentation needed when applying for hardship, with the online eligibility requirements being a self assessment process.

The Australian Taxation Office on Friday said it would be cracking down on people rorting the system and using it as a way to dodge paying tax at the marginal tax rate, or making false claims.

Where’s the money going?

Five of the country’s largest industry funds continued to make up the bulk of payments made to members. AustralianSuper, Sunsuper, Hostplus, Rest and Cbus represent $7.6bn of total funds paid out.

AustralianSuper has fielded the largest number of withdrawal requests, with 283,986 members already being paid a total of $2.13bn.

AustralianSuper members on average are requesting $7495 with 96.4 per cent of claims being paid within the recommended five-day turnaround period.

Sunsuper has been sapped of $1.6bn from nearly 230,000 members requesting early super payments.

Hospitality workers fund Hostplus has had 227,808 account holders request an average payment of $6849, draining the fund of $1.5bn.

Retail employees fund Rest has paid out $1.45bn to 202,599 members, while 108,774 Cbus members have requested a total of $907m.

Westpac’s wealth management arm BT Super is the hardest hit retail fund with more than $800m being paid out to members.

Two of its investor wealth platforms are among some of the worst performing funds with regard to paying members within five business days.

According to APRA, BT’s Asgard fund has paid 53.8 per cent of members within five days, while its Advance Retirement has paid 32.4 per cent of its members in the recommended time frame.

The Australian has previously reported government employee funds are experiencing high rates of withdrawals, despite no significant job cuts within the public sector.

The Commonwealth Superannuation Corporation, which is the default fund for federal government employees, has dished out nearly $150m since the implementation of the scheme.

The Australian has previously reported that four out of five CSC funds can only be held while a person is actively employed by the federal government.