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The Federal Government has added at least a further $30 billion to the amount which will be withdrawn from Australian superannuation funds by extending the timeline on its hardship early release superannuation regime.
What is more, at least 60% of that $30 billion will be withdrawn from 10 major funds, the largest of which is AustralianSuper.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.
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Institute of Superannuation Trustees (AIST) chief executive, Eva Scheerlinck was quick to point out that the amount withdrawn under the hardship early release scheme had already exceeded the Government’s initial estimates.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$30 billion being taken from the system under the Government’s extended arrangements, with $6.2 billion having been withdrawn from funds in just the first full week of July after the $10,000 second tranche became available.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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