Billions lost in superannuation as coronavirus crisis hits Aussie households

The coronavirus crisis has pushed more than a million Australians into financial hardship.

The latest estimate is a $1.1bn jump in claims since Treasurer Josh Frydenberg’s Tuesday economics speech, which noted that total claims were sitting at around $10.6bn.

More than $11bn has been sapped from the country’s superannuation funds, as deteriorating economic conditions sparked by the coronavirus pandemic pushes more than a million Australians into financial hardship.

Following a national cabinet meeting on Friday, Prime Minister Scott Morrison said early release of super claims stood at roughly $11.7bn.

The latest estimate is a $1.1bn jump in claims since Treasurer Josh Frydenberg’s Tuesday economics speech, which noted that total claims were sitting at around $10.6bn.

Mr Morrison said the head of the Australian Prudential Regulatory Authority, Wayne Byres had updated national cabinet with the most recent figures not exceeding industry forecasts.

“It was noted that this was consistent with Treasury estimate and this was not presenting liquidity issues, the head of APRA has advised us,” Mr Morrison said.

However, an APRA spokesman confirmed with The Australian that the $11.7bn figure is not the regulator’s official number.

APRA is scheduled to release its official statistics on the early release of super on Monday.

The banking and superannuation regulator on May 11, said the total amount paid to super account holders through the scheme was $6.3bn.

It is understood the figures provided to the Prime Minister in Friday’s national cabinet meeting were from the Australian Taxation Office.

The ATO could not confirm if the numbers provided to the national cabinet had come from its estimates or database.

An ATO spokeswoman said its most up-to-date early release of super figures were 1.29 million claims, at a total cost of $10.6bn with an average payment of $8000 per person. Its most recent public figures are based on the Treasury's economic update on May 12.

Published data from APRA has indicated industry super funds have taken a heavy hit from the early release of super scheme, with five major industry funds making up more than half of the total funds paid to members.

The Prime Minister commented that the banking sector has already deferred close to $220bn in home and small business loans, but the shock absorbers within the banking system “have limits” and are “not endless”.

The federal government also flagged that approximately $90.1bn worth of government securities has been raised since its emergency quantitative easing measures were enacted in March. $56.6bn has been through bonds and $33bn from Treasury notes.

“Our ability to raise this finance in such a difficult time is essential to ensure that we can continue to provide those necessary economic supports,” Mr Morrison said.