APRA confirms second tranche early release surge

The Australian Prudential Regulation Authority (APRA) has confirmed a second-tranche surge in hardship early release superannuation. 

The APRA data covering the period 29 June to 5 July revealed a significant increase. 

The regulator said there had been 511,000 applications received by funds during the week from 29 June to 5 July which included a mix of applications received in both the 2019/20 and 2020/21 financial years. 

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“It is a significant increase in applications compared to the week of 22 June to 28 June, where 127,000 applications were received by funds, reflecting the start of repeat applications in the 2020/21 financial year,” APRA said. 

“The 511,000 applications received during this reporting week (29 June to 5 July) is lower than the 665,000 applications received during the first week of the early release scheme (20 April to 27 April).” 

“Out of the 511,000 applications received, 165,000 were for members applying for early release for the first time (initial application) and 346,000 were for members applying for the second time (repeat application). The average amount applied for by those making a repeat application was $8,904,” APRA said. 

“The 165,000 initial applications brings the total number of initial applications to 2.7 million since the inception of the scheme. It is important to note that the number of initial applications reflects the number of member accounts that have been accessed across entities with more than four members and exceeds the number of individuals that have made an application due to some individuals seeking withdrawals from more than one superannuation fund.” 

“Over the week to 5 July, superannuation funds made payments to 132,000 members, bringing the total number of payments paid by funds to their members to approximately 2.54 million since inception with some of the payments being repeat payments as a result of the commencement of the second period in which members can make an application. The total value of payments during the week was close to $1 billion, with $19.1 billion paid since inception. The average payment made over the period since inception is $7,511.” 

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It would be interesting to know that if a hypothetical early release had been made available but without any catalyst such as COVID-19 and the associated financial impacts present, how many people would have accessed their super anyway ??
If the figures had still been high but without any real identifiable need for the funds, this would raise significant questions about peoples relationship and attitude with retirement savings.
Maybe one of the larger organisations should conduct a survey asking a large cohort if they still would have accessed their super irrespective of the current pandemic.
We may well be shocked.

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