Debate heats up as early super continues to slow

The latest APRA figures showed super funds had made $294 million worth of early release payments to 40,000 members in the week to 20 September.

The data revealed funds had received 38,000 applications in the course of the week, of which 23,000 were initial applications and 15,000 were repeat applications.

The value of payments made since the inception of the early release scheme now totalled $33.5 billion, with 4.4 million total payments made, of which 1.2 million were repeat applications and 3.2 million were initial applications.

The new data comes as former Liberal Party leader John Hewson slammed the Coalition’s adoption of the scheme as a buffer against the economic chaos brought about by COVID-19, saying it had unfairly disadvantaged younger workers.

“I think it’s a mistake to have allowed access to super during the COVID process – it is working against young Australians who have been significantly adversely affected by the recession itself,” Mr Hewson said at the ACTU’s Emergency Superannuation Summit virtual event on Monday.

“You are taking a significant amount of money out of their retirement benefit by the way they’ve been treated, given that many of these workers also did not qualify for JobKeeper.”

Economist and former Reserve Bank board member Heather Ridout agreed with Mr Hewson’s comments, saying older generations had been better served by the government’s reduction in minimum pension payments at the same time as those in the accumulation phase of super had been encouraged to withdraw funds.

“The government has made it possible for older people to take half as much out of super, so we’ve had this weird time where older people can take out less but younger people can take out as much as they like,” Ms Ridout said.

“Super should do its part, but I think it’s regrettable that workers ended up raiding their retirement savings and that that put a bigger stimulus into the economy than JobKeeper and other payments.”