Hundreds of thousands of Australians have been granted early access to their superannuation savings, totalling $3.8 billion in early payments, Treasurer Josh Frydenberg has said.
The government introduced a policy to allow people facing financial hardship due to the coronavirus crisis to access up to $10,000 of their current super balance this financial year, and another $10,000 in the following financial year.
Mr Frydenberg said the measure would see thousands of dollars paid to Australians doing it tough.
“The Australian Taxation Office has approved 456,000 applications, totalling $3.8 billion,” he said.
“Those applications are now with the superannuation funds for payment over the next five days.
“The average withdrawal is around $8000.”
Labor encourages applicants to seek financial advice
The policy has drawn concern from the Labor Party and super funds, which argue granting Australians access to superannuation early will rob them of the compound interest built into the system.
Labor’s Shadow Assistant Treasurer Stephen Jones said while some people would benefit from access to their super, many more would end up worse off in the long run.
“This is a sign that a lot of Australians are doing it tough,” he said.
“Our No.1 issue is to ensure that people get financial advice.
“Accessing your super is the right answer for some people but not for everybody.
“Unless you have to access your super, I’d encourage people to think twice about it.
“A small amount of money accessed today could be a big cost to your retirement savings down the track.”
Two weeks ago, the government announced more than 600,000 people had made applications for early access to their retirement savings.
To be eligible, applicants need to demonstrate they are unemployed or are eligible for support payments including the JobSeeker payment, Youth Allowance, Parenting Payment, Special Benefit or Farm Household Allowance.
People who have had their working hours reduced by 20 per cent or more or sole traders who have seen drops in business are also eligible to apply.
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