Record low early access super paid out for latest weekly data

The weekly amount paid out under the government’s COVID-19 early access of super scheme is at a record low.

The week to May 3 marked the largest weekly amount, when $6.3bn was paid out to fund members.

The weekly amount of superannuation being paid out under the COVID-19 early release scheme has fallen to a second consecutive new low as fewer and fewer Australians tap their retirement savings for cash.

The scheme, which allows Australians who have had their incomes reduced during the pandemic access up to $20,000 of their super in two tranches of $10,000 – once last financial year and once this financial year – has now seen a total of 4.1 million fund members access $31.7 billion of their retirement savings early.

Data from the Australian Prudential Regulation Authority shows that just $600m was paid out to applicants to the scheme in the most current reported period – the week to August 16, supplanting the $710m doled out a week earlier as the record low payout figure.

The week to May 3 marked the largest weekly amount, when $6.3bn was paid out to fund members.

However, unless the weekly amount paid out slows further still, the scheme is still on track to exceed the federal government’s total withdrawal target of $41.9bn by the December 31 cut-off date for new applications.

The latest reported week was also the first time new applications exceeded “repeat” applications made by people who accessed their super during the first tranche.

Of the 70,000 applications that were received in the week to August 16, 40,000 were first-time applications, while 30,000 were “repeat” applications.

The average amount paid out to repeat applicants remained significantly higher than that paid out to initial applicants, at $8468 and $7402 respectively.

There have been 3.1m initial applications made and 1.2m repeat applications made overall, while industry funds still represent the part of the industry hardest-hit by the scheme.

Industry fund giant AustralianSuper has paid out roughly $4.29bn to more than half a million of its members, while Sunsuper, has paid out more than $3bn to 425,000 members.

Retail workers fund REST super has paid out $2.8bn to more than 391,000 members while Cbus, which looks after the retirement savings of those in the construction industry, has paid out $1.9bn to more than 230,000 members.

The retail fund that has paid out the most is BT’s retirement wrap fund, which has paid out more than $1.47bn to 184,000 members.

Industry super CEO Bernie Dean told The Australian that the scheme has impacted the youth disproportionately.

“More than 600,000 Australians, the vast majority under 35 years-old, have drained their super accounts and simply can’t access any more savings – this is a tragedy waiting to happen for future generations facing higher taxes and less in retirement,” he said.

“Workers need the legislated super rise to proceed to help rebuild their retirement savings, otherwise they risk facing the grim choice of working longer into their 70s or retiring in poverty.”

Mr Dean also said he expected the number of applications to pick up one more when the government’s JobKeeper and JobSeeker payments are reduced in September.

“The scheme has helped those in hardship, but the lack of enforced eligibility criteria has meant it is largely a stimulus measure, so the real test will come in September when the JobKeeper and JobSeeker payments are reduced and we might see a spike in first-time applicants being forced to raid their retirement savings.”