More than one million Australians tap super twice

Over $29.4bn has now been withdrawn early from super funds, new figures show, but the total is tipped to reach $42bn.

Latest estimates are that $42bn will be withdrawn from super accounts under the early release scheme.

More than $29.4 billion has now been withdrawn from Australia’s superannuation sector as part of the government’s COVID-19 temporary early release scheme, with 1.04 million Australians having now tapped their super fund twice for extra cash.

In the week to July 26, super funds paid out $1.4 billion to 173,000 members, according to the latest weekly data released by the Australian Prudential Regulatory Authority, which showed that a total of 2.9 million people have now accessed their super fund once.

The early release scheme allows people hit with financial hardship as a result of the coronavirus crisis to withdraw up to $20,000 from their superannuation over two financial years.

Treasury had estimated that $29.5 billion would be withdrawn from Australia’s super system as a result of the scheme, but that estimate was revised up to $41.9 billion after it was extended to the end of the year, as the coronavirus outbreak in Victoria continued to worsen.

Analysis of Australia’s banking sector has indicated that about 58 per cent of the early release payments have either been saved, placed in offset accounts to reduce mortgage interest payments or put towards debt repayment.

The prudential regulator said that 96 per cent of applications received since inception had been paid, up from 94 per cent a week ago, as funds continue to process the large volume of applications received in early July.

Last week, the Australian Taxation Office flagged a crackdown on members withdrawing super where they weren’t eligible, warning of a higher tax rate of tax or a fine.

AustralianSuper, the nation’s biggest superannuation fund, remains the hardest hit fund by the scheme, paying out nearly $4 billion to members. Sunsuper, Retail Employees Superannuation Trust and Hostplus have all paid out more than $2.5 billion.