ATO, Superannuation

Govt tips over 1.5m early access applications

early access super

The government expects over 1.5 million people to apply for early access to their super under its COVID-19 relief measure.

The federal government has predicted over 1.5 million Australians are likely to apply for early access to their superannuation under its recent coronavirus relief measure.

Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume said as many as 1.7 million Australians may apply to withdraw up to $10,000 from their super during the current or next financial year under the government’s temporary relief measure for those affected by the COVID-19 pandemic.

“The government’s estimate is that around 1.6 to 1.7 million Australians will apply for early release of their superannuation throughout either this tranche, which ends on June 30, or the next tranche, which is 1 July to 24 September,” Hume said in an interview with Sky News Australia.

She also noted the large number of expected early super release applicants was unlikely to pose a long-term threat to the integrity of the superannuation system, despite industry concerns the temporary relief measure might weaken the system.

“I wouldn’t go as far to say it’s a risk of undermining the apparatus of the super system. Accessing superannuation for issues of financial concern or financial stress has always been available. The government has simply changed the definition of what that financial stress looks like. So we’re not necessarily concerned about the infrastructure behind it,” she said.

“That said, people should take the decision as to whether they should access their superannuation very seriously indeed. Of course, there’s going to be a trade-off between taking money out of superannuation now and keeping it in and locking it up for their retirement savings in the future.”

Potential applicants with any doubts regarding how accessing their super early might affect them should consult with a trusted financial adviser or registered tax agent, she added.

In a recent update on its website, the ATO said there had been a total of 881,600 registrations of interest in the early access to super relief measure as at the end of 16 April.

Yesterday, Deloitte head of superannuation Russell Mason urged members accessing their super early under the government’s COVID-19 relief measures to consider the impact this would have on their life insurance.

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