The Financial Services Council (FSC) has thrown its support behind the Government’s package of temporary superannuation measures to help Australians in financial hardship during the current national emergency brought on by the COVID-19 pandemic.
On Sunday, the Government announced measures that included:
- Temporary early release of a limited amount of superannuation for individuals in financial stress;
- Temporary reduction in minimum superannuation drawdown rates for retirees; and
- Temporary reduction in social security deeming rates.
FSC chief executive, Sally Loane, said: “We understand that the Government's temporary measures for early access to $10,000 tax-free this financial year and another $10,000 the following financial year will apply only to those in severe economic hardship, such as people who have lost their jobs as a result of the coronavirus crisis”.
Loane noted that accessing superannuation should not be the default response to providing income support for Australians in need over the short term and said the council was pleased this was only a temporary measure that was part of a broader package.
“Also, the decision to support retirees at this time by temporarily reducing minimum drawdowns and halving social security deeming rates is a welcome acknowledgement that it is inappropriate to force individuals to crystallise investment losses in a volatile market,” she said.
“We urge the Government to continue working with the superannuation sector as we focus on safeguarding the retirement savings of Australians through this period of uncertainty, and look toward the industry’s role in investing to support the economic recovery effort.”