Superannuation withdrawal scheme hits 3m+ applications
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The superannuation withdrawal scheme is still being taken advantage of more than six months since it began.
People eligible for the superannuation withdrawal scheme had to have been made redundant, had their income reduced by a fifth, be unemployed or receiving government payments.
The latest analysis from New Industry Super Australia estimates 23 per cent of Australian workers have accessed super early.
A spokesperson for Industry Super told Stockhead this equated to 3.2 million withdrawals, averaging $7,674 per person.
In some states the rate was even higher with Queensland seeing a 30 per cent withdrawal rate. Western Australia witnessed a 24 per cent withdrawal rate but had the nation’s highest average application figure at $7,948.
The government initially estimated $29bn would be withdrawn but it is now predicting it will reach $42bn.
The outflows come despite COVID-19 restrictions easing in many states, except Victoria, since July.
The superannuation withdrawal scheme will come to an end in December.
Industry Super says it cannot come soon enough and even implied it should be canned early.
“Now as the country’s health crisis has improved, and the economy begins its march to recovery, there is no reason to continue the emergency early access to super scheme,” the industry body said.
“For those doing it tough, there are existing hardship provisions which are a more appropriate scheme to get funds to members who had fallen on hard times.”
Chief executive Bernie Dean said the best solution would be to stick with the scheduled superannuation guarantee rise.
Employer superannuation payments will increase to 10 per cent next year and then increase by 0.5 per cent each year until it hits 12 per cent.
But Reserve Bank Governor Phillip Lowe said in August the planned rise shouldn’t proceed. He argued it would reduce wages, cut consumer spending and could ultimately cost jobs.
Only a week later Josh Frydenberg hinted the promised rise could indeed be delayed.
But Dean believes the government should stick to its plan of raising the level of super paid to employees.
“The best way to repair the retirement savings of workers and avoid having to hike taxes is to stick to the scheduled super rate increase,” he said.