Federal Government’s action will double early release drawdowns

The Federal Government has added at least a further $30 billion to the amount which will be withdrawn from Australian superannuation funds by extending the timeline on its hardship early release superannuation regime. 

What is more, at least 60% of that $30 billion will be withdrawn from 10 major funds, the largest of which is AustralianSuper. 

That is the bottom line of yesterday’s announcement by the Treasurer, Josh Frydenberg, that the Government will be extending access to the hardship early release scheme from its original 24 September cut-off date to a new time horizon of 31 December. 

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Superannuation fund industry spokespeople have expressed concern at the impact of the Government’s decision which went totally unflagged to superannuation funds which had been working on the premise that the scheme would finish on its original September date. 

Australian Institute of Superannuation Trustees (AIST) chief executive, Eva Scheerlinck was quick to point out that the amount withdrawn under the hardship early release scheme had already exceeded the Government’s initial estimates. 

“The scheme’s impact on retirement outcomes for millions of working Australians is an increasing concern,” she said. 

“While we acknowledge that the extension of the early release super timeframe may be helpful to those in financial need, it is a great concern that so many Australians are being forced to protect their livelihoods with savings that are meant to help them avoid poverty in retirement,” Scheerlinck said.  

“For many Australians, superannuation is the only savings they have, money they have been diligently setting aside so they don’t have to work into old age. Australians who can least afford it shouldn’t have to choose between poverty now or poverty in retirement.” 

The latest APRA data confirms the likelihood of a further $30 billion being taken from the system under the Government’s extended arrangements, with $6.2 billion having been withdrawn from funds in just the first full week of July after the $10,000 second tranche became available. 

At that point, APRA said that $25.3 billion had been paid since inception of the scheme. 

Among the 10 funds doing the heavy lifting on early release are AustralianSuper, REST, Hosplus, HESTA, Cbus, AMP, Colonial First State, National Australia Bank’s NULIS and Sunsuper. 

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I don't see that extending the date will necessarily increase the amount withdrawn. There has been no increase to the withdrawal limit. Many of those who withdrew in Round 1 did so just in case their situation worsened later and they needed the money after that withdrawal window had closed.

By extending the Round 2 withdrawal window it gives people more time to see if they really need the money before withdrawing it.

Well said. Yes the "questionable" withdrawals are made quickly. Extension is there to benefit those who end up in real need.

Given the Super funds receive approx $110 billion pa in new contributions, break out the violins. If anything, the access period should have been extended to 31 March 2021, in line with JobKeeper. It seems the only group that doesn't want to take a haircut during this pandemic are whinging Union based super funds.

Ah yes, the mask of concern covering the face of self interest.

Is it any wonder with this that disengaged and conscripted savers are even more distrustful of fund trustees obliged to act in their (members') not their (trustee sponsors') interests? The once in a century pandemic has destroyed the ability of many to survive the next few months, let alone till eventual retirement and preservation. If savings are not to be used for such existential angst, what else is it for? Sponsor fees, adviser remuneration and regulatory levy?
A classic case of the inmates running the asylum. Here's hoping the detractors never access their super: unlikely as consistency is the vice of an idiot, and these are too 'clever'.
Paul Keating Bill Kelty etc must be spinning in their perches.

It always astounds me that people like Eva Sheerlinckn can see the future will be bleak for those who take out "their" super now but couldn't see Covid coming. Super is the biggest farce. There will always be a pension for those who need it. This is just continual scare mongering by funds and their side kicks. Disband super now. Put the money back into the economy. People need to know they have their money available when a crisis comes to them, not their money controlled by some faceless "trustee" who doesn't give you reasons for keeping your money or, in the case of death, giving it to someone you haven't nominated. If you ask why, which I did of REST on 7/8/19, they ignore you. I even put in a claim of misconduct with ASIC and have now a dispute with AFCA. And in our son's case he had a Will and nomination. No marriage, no engagement, no children, no shared bank accounts or bills. And just silence from REST. I even wrote to Vicki Doyle, C.E.O, Kenneth Marshman, Chairman of Directors and Tyrone O'Neill (get this) Manager for Member Engagement. Silence from all. Super Funds must not be allowed to get any more powerful or arrogant. Super is fighting for existence now. Let's finish it off and give the people back their money.

Now you know how they treat independent advisers as well. These Union based funds have become worse than AMP ever was.

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