Coronavirus: Aussies funnel $5bn of early super into savings
More than a third of people who claimed early access to super seem to have used it for purposes other than immediate hardship.
More than a third of Australians who have claimed emergency early access to their retirement savings have instead funnelled as much as $5bn into their savings, suggesting a large portion have used the government’s measure for purposes other than immediate hardship.
The latest Australian Bureau of Statistics survey on the impact of the COVID-19 crisis on households also revealed that 57 per cent of respondents planned or had drawn on their retirement savings to pay household bills, mortgage, rent and other debts.
However, 36 per cent said they had not used super money as an emergency measure, instead telling the ABS they planned or had added it to savings.
So far there has been $14bn pulled out of super accounts since the scheme was announced on March 22. The ABS survey suggests $8bn of that has gone to paying bills, while just over $5bn has shored up applicants’ savings.
Around 1.5 million Australians have taken advantage of the early access scheme, which the Morrison government announced on March 22 as an additional measure to cushion the financial blow on households from the pandemic. The scheme allows two withdrawals of $10,000, spread between the last three months of this June financial year and the first three months of the next.
Crucially, the scheme relies on a self-assessment to gauge eligibility, and there is evidence that applicants may be using the scheme for purposes other than financial hardship.
This week The Australian revealed that $100 million had been pulled out of federal government and military default retirement funds, despite public servants not numbering among the hundreds of thousands of those who have lost jobs in March and April.
The ABS survey also revealed that three quarters of those who had applied for the scheme had already received their money by mid-May. Based on $14bn withdrawn so far, it suggests a further $4.5bn in money applied for but not yet paid out.
Treasury estimates that $27bn will eventually be withdrawn from Australia’s retirement pool.
Earlier this month the Australian Taxation Office suspended payments to applicants for a day after it discovered evidence of people allegedly defrauding the scheme.
The ABS said that the surveyed results on early access to super had a particularly wide margin for error of more than 10 per cent.
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