Early super withdrawals pass $10bn

The amount Australians have been paid early from their super accounts has reached $10.6bn, from nearly 1.6m applications.

Aave super, or keep up with mortgage payments? Illustration: John Tiedemann

The amount of money Australians have withdrawn early from their super funds has surpassed $10 billion, with major industry funds the most affected by the rising claims.

Figures released by the Australian Prudential Regulatory Authority reveal that as of May 17, $10.6bn of super had been paid to members claiming financial hardship during the coronavirus pandemic.

The banking and superannuation regulator says 1.59 million applications have been lodged with the Australian Taxation Office, with 1.41 million Australian already paid. Nearly 10 per cent of applications have yet to be processed.

The average payment request is for $7510.

The early release of super was made possible by the federal government as a financial support measure during the COVID-19 crisis, enabling savers to request up to $10,000 in both the current and upcoming financial years.

The ATO eligibility requirements are that a person must have experienced a loss of employment or reduced income during the shutdown.

According to APRA data, 94 per cent of claims are being paid within five business days. The average turnaround of payment is 3.3 days.

Industry funds are seeing significant outflows, with five major funds representing approximately $5bn.

The country’s largest industry fund, Australian Super, has dished out $1.4bn to 181,671 members. Sunsuper has released $1.07bn to more than 150,000 account holders.

Sunsuper previously said its account base has been hit hard, due to high proportions of members working in industries that have come to a halt during the shutdown.

Sunsuper is also the default fund for Virgin Australia employees.

Hostplus, which brands itself as the hospitality and recreation fund, has handed approximately $1.05bn to members.

Retail industry fund REST has paid $953.2 to 132,589 account holders and Cbus has released $573,000 in super.