Key superannuation industry organisations, including industry funds, were not consulted about the Government’s COVID-19 decision to allow early hardship access to up to $10,000 a year in superannuation and are now urging caution and consultation to ensure the yet to be fully devised plan works properly.
Industry Super Australia (ISA) offered its cooperation but made clear it had not been consulted on the formulation of the Government’s proposal and urged effective coordination from the Government and the Australian Taxation Office (ATO) to make it work.
Fellow industry funds organisation, the Australian Institute of Superannuation Trustees (AIST) urged that access to superannuation should be a last resort.
For his part, MLC Wealth chief executive and Financial Services Council chairman, Geoff Lloyd suggested that as little as 1% of the superannuation savings pool would be affected.
In doing so, Lloyd urged members to be patient given the logistics which would be involved in giving them access to their super.
Industry Super Australia was also insistent that the process would not be simple and said that assisting those in financial hardship would come down to how well the ATO worked with the funds, given each superannuation fund would have to manually issue the money.
“Effective co-ordination from the government and the ATO will be vital to ensure the scheme works efficiently and does not frustrate people further,” the ISA said. “Remembering that the workforce of many funds are working remotely just like other affected businesses.”
“Aside from getting the details right, we need a commitment from the government to transparently report the scheme’s applications and any issues encountered. The scheme should also be reviewed as it is rolled out to ensure it will not hamper funds’ capacity to support the macro economic recovery.”
AIST chief executive, Eva Scheerlinck said the measures significantly broadened the eligibility requirements for the early release of super and could only be effectively administered by the ATO, particularly in light of its enhanced online capability.
“AIST is urging Australians who are facing financial hardship to access all other sources of income measures before tapping into their super,” she said. “AIST is working with its member funds to explore other opportunities with superannuation to assist the community in these difficult times.”