Accessing super early should be the last resort for financially stressed members
Industry SuperFunds will work to ensure members under severe financial stress due to the economic impacts of the Coronavirus have access to their super in line with the government's recently announced early access scheme.
The COVID-19 pandemic has created extraordinary times and ISA acknowledges the government's need to take the extraordinary measure of loosening the restrictions on early access to superannuation as part of its financial support package.
Industry Super Australia (ISA) stands ready to work with the government on the all-important detail of how the scheme can be rolled out to prevent unintended impacts on a member's savings and their super fund.
For some members their short-term financial survival might rely on the ability to access the up to $20,000 form super that the scheme allows.
But accessing superannuation early should be approached with extreme caution and only as a last resort.
ISA analysis shows a 20-year-old who accesses the full $20,000 available under the scheme could lose more than $120,000 from their retirement balance. A 30-year-old who accesses $20,000 from super now could lose about $100,000 when they hit retirement and a 40-year-old could lose more than $63,000.
The government has provided a significant program of wage stimulus measures, including increasing welfare support payments, which members should consider exhausting before tapping into their super.
ISA will be working with government to ensure this scheme is delivered successfully and without harming Australia's national savings pool.
The scheme has the potential to increase the administrative burden on funds and co-ordination with government and the Australian Tax Office will be vital to ensure it operates efficiently.
The last thing anyone wants is for stressed members to face prolonged delays for access to their super due to administrative bottlenecks.
