The Government has announced that eligible individuals in financial stress, which is a result of the COVID-19 crisis, will be allowed to access tax-free of up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21, the Treasurer Josh Frydenberg announced at a press conference on Sunday.
The early release of superannuation, a measure which was estimated to cost $1.2 billion over the forward estimates period, is a part of the government’s broader $66.1 billion second economic support package aimed at assisting Australian workers and businesses to help cushion the economic impact of the COVID-19.
According to the new rules, eligible individuals would be able to apply online through myGov for access of up to $10,000 of their super before 1 July, 2020 and would be able to access up to a further $10,000 from 1 July, 2020 for another three months.
Those individuals would not need to pay tax on amounts released and the money they withdraw would not affect Centrelink or Veterans’ Affairs payments.
The Government would be also temporarily reducing superannuation minimum drawdowns requirements for account-based pensions and similar products by 50% for 2019-20 and 2020-21, a measure which would be expected to benefit retirees by providing them with more flexibility as to how they manage their super assets.
The second stage of the Commonwealth government economic plan brings a total to $189 billion, or an equivalent of 9.7% of GDP, which has been so far injected into the economy by all arms of government.
This included earlier announced $17.6 billion for the Government’s first economic stimulus package, $90 billion from the Reserve Bank of Australia (RBA) and $15 billion from the government.
“The next few months are going to be a difficult journey but we all have a role to play to adapt to the changes we are facing, to cushion the impact of what is happening and to pull together so we can bounce back when we get to the other side,” the Treasurer said.