Public servants, army rush to cash out super, claiming hardship

Default super fund for federal public servants, military personnel has paid out $100m under hardship scheme.

Nearly 12,600 applications have been lodged with the federal government’s $48bn Commonwealth Superannuation Corporation for the assistance program.

The default superannuation fund for federal public servants and military personnel has paid out more than $100m under the early release of super scheme, which is aimed at providing a financial lifeline for those hit by the coronavirus downturn.

Nearly 12,600 applications have been lodged with the federal government’s $48bn Commonwealth Superannuation Corporation for the assistance program. Workers must declare financial hardship from being stood down or suffering a reduction in pay to access super early.

Australian Prudential Regulatory Authority figures show that the CSC — which is the registered licensee for a number of government super funds — has paid out $102m to its members.

In total $10.6bn has been paid out to 1.59 million applicants, with industry funds covering the retail, hospitality and tourism industries making up the bulk of payouts.

Early release of super was part of a package of financial support measures introduced by the federal government at the start of the COVID-19 crisis, enabling fund members to withdraw up to $10,000 in the 2019-20 and 2020-21 financial years.

The CSC’s different schemes include super funds dedicated to public sector, defence and military employees. The Australian understands that no federal government agency has publicly announced reduced work hours for staff or undergone significant job cuts.

The Public Sector Superannuation Accumulation Plan is the only fund an employee can hold on to after leaving a government paid role. APRA’s latest data indicates the PSSAP fund has released $30.6m to 3479 account holders since the implementation of the early scheme in April.

The Public Sector Superannuation Scheme, which does not allow members to keep accounts if they leave government work, has paid out about $23.9m to 2652 members, with an average payment of $9015 per person.

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CSC’s Military Superannuation and Benefits Fund has handed back $45.6m to its members, while the Australian Defence Force Superannuation Scheme has paid 284 members close to $2m. Some $70,000 has been released from the Commonwealth Superannuation Scheme to seven account holders. A CSC spokesman declined to comment on the early release of super, but noted the fund provided APRA with figures on a weekly basis. According to CSC’s 2019 annual report, funds under management across the five funds amount to $48.3bn.

The application for the early release of superannuation is a self assessment process, where the applicant determines whether they have met the eligibility requirements of the scheme.

An Australian Taxation Office spokesman said it reviewed applications where it believed a claim had been made on false grounds.

A false claim made under the scheme can attract a fine penalty of up to $12,600.

“We will be reviewing applications and where we have concerns that the claim was not made genuinely, we may apply penalties,” an ATO spokesman said. “The penalties that apply vary based on the facts and circumstances of each case. They can range from monetary penalties through to prosecution in exceptional cases.”