Australians hoping to access their superannuation to get through the coronavirus recession now have until New Year’s Eve to do so.
The federal government revealed in Thursday’s long-awaited economic update that members have until December 31 to lodge an application – a three-month extension from the previous September 24 deadline.
Under the early super access scheme, which was announced in late March, eligible members could withdraw a maximum of $10,000 in the first tranche from April to June.
They could then withdraw another $10,000 starting from July 1 provided they again met the criteria – though personal finance experts warned them to think twice before doing so.
In order to access the scheme, Australians need to satisfy one of the following criteria:
- Are unemployed
- Are eligible to receive government payments, including JobSeeker and Youth Allowance
- Were made redundant, had their work hours cut by 20 per cent, or lost at least 20 per cent in turnover (if a sole trader or business owner) on or after January 1.
Federal Labor has criticised the management of the scheme following reports that ineligible members have managed to access their funds.
Analysis from credit bureau illion and consultancy AlphaBeta in June found nearly two in five members had accessed the scheme despite suffering no drop in income during the coronavirus crisis.
And, in July, the Australian Federal Police froze $200,000 across more than 50 bank accounts suspected of defrauding the scheme.
Labor MP Stephen Jones said the reports of alleged fraud were unsurprising given the government rushed the implementation of the scheme and payment approvals are automatic and based on self-assessment.
“Of course you’re going to attract criminals and fraudsters to such a scheme,” Mr Jones said at the time.
People who dipped into their super without meeting the eligibility criteria could face significant penalties – and even prosecution – if caught by the Australian Taxation Office.
The scheme’s extension comes after the government reduced the rate of JobKeeper and JobSeeker beyond September.
Withdrawals keep rising
The latest figures from financial regulator APRA indicate that 2.8 million Australians have submitted applications under the early super access scheme, with the ATO already paying out more than $25 billion.
The average withdrawal amount was $7718.
According to Industry Super chair Greg Combet, 480,000 Australians drained their accounts entirely by the end of the 2019-20 financial year.
Meanwhile, APRA revealed in the week to July 12 that 800,000 applications during the second tranche were from members intending to raid their account a second time.
“The jump in withdrawal numbers reflects the fact that there is still a great deal of hardship being caused by COVID-19,” Grattan Institute household finances director Brendan Coates said.
“The ATO should ask people to show they have lost their job, suffered an income fall, or are on JobKeeper.”
The New Daily is owned by Industry Super Holdings