Treasurer Josh Frydenberg has now revealed that the ATO has now approved 456,000 applications for the early release of super measure, which allows impacted Australians to access $10,000 by the end of June, and a further $10,000 in the third quarter of this year.
Mr Frydenberg said the average withdrawal hovered around $8,000 and totalled $3.8 billion.
“Those applications are now with the superannuation funds for their payment over the next five days,” Mr Frydenberg said.
Applications to the measure were opened this week, with 975,000 people having expressed interest by the end of 19 April.
Is super the right way?
BDO superannuation partner Mark Wilkinson said that while accessing super now might appear enticing, Australians might be short-changing themselves in the future.
“While accessing your super right now might provide some relief if you’re facing significant financial pain, there should be a big, red ‘Proceed with Caution’ sign warning that your future self will pay the price for this move,” Mr Wilkinson said.
“Although $10,000 doesn’t sound like a lot, for a person who is 25 who loses their job due to COVID-19, that $10,000 today could be worth $160,000 when they retire in another 40 years.
“Some people may find the ability to access their retirement savings early necessary, but they should weigh up the long-term effects on their retirement savings by doing this.”
With ASIC now granting tax agents an exemption from holding an Australian financial services (AFS) licence to provide advice to existing clients on the early access to super measure, the profession has been urged to act prudently.
“A plea to those thinking about all this and those advising them — think through the options carefully before taking action,” the Tax Institute’s senior tax counsel, Professor Robert Deutsch, wrote to members on Friday.
“Everyone should pause and take into account the extent to which they individually may benefit from the cash-flow boost and the JobKeeper payment arrangements, as well as all the other significant and valuable stimulus measures, before eroding their hard-earned accumulated superannuation.
“Every time we allow early access to super, we put more people into a position of reliance on the age pension and thereby diminish our capacity to provide other much-needed government services.”
Jotham Lian is the editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.