The SMSF Association (SMSFA) and Financial Services Council (FSC) have voiced their support for the federal government’s latest economic assistance package intended to soften the economic impact of the COVID-19 pandemic.
Following the government’s announcement, the SMSFA and FSC said they welcomed the decision to allow the early release of superannuation and temporarily reduce super minimum drawdown rates as part of the second stage of its plan to curb the economic effects of the coronavirus.
SMSFA chief executive John Maroney said: “The country is in uncharted waters, so we fully endorse the new measures the government has committed to in a bid to ameliorate the economic fallout from COVID-19.
“By implementing [a temporary reduction] on [superannuation minimum] drawdown rates, the government is giving SMSF trustees the discretion and flexibility to better manage their superannuation assets in these testing times.”
Late last week, the SMSFA wrote to the government asking it to reduce the minimum pension drawdown requirements for superannuation members following a downturn in financial markets due to the coronavirus health crisis.
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.
“Accessing superannuation should not be the default response to providing income support for Australians in need over the short term, so we are pleased to see that this is a temporary measure as part of a broader income support package.
“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.”
The SMSFA also highlighted its support for the government’s decision to change the social security deeming rates to reflect the latest rate reductions by the Reserve Bank of Australia.
“Many age pensioners, in particular, will benefit from this change. The decision to temporarily double Newstart is also welcome,” Maroney said.