Alarm as savings ravaged

Super takes $578m hit

TASMANIANS have taken about $587M out of their superannuation savings to get through the COVID-19 crisis, according to new industry predictions.

More than 78,800 people, or one in seven Tasmanians, are estimated to have withdrawn money from their retirement nest eggs during the pandemic.

And more than 10,000 Tasmanians may have emptied their super savings entirely, modelling by Industry Super Australia shows.

It’s understood some of the emptied accounts may be Australians consolidating multiple super accounts into one.

The average amount being withdrawn is $7719, ISA’s analysis found.

The analysis is based on Australian Bureau of Statistics payroll data and the latest Australian Prudential Regulation Authority data.

That information shows some 3.9 million Australians had withdrawn about $30.3 billion from their super during the pandemic by August 2.

The early super access scheme was launched by the federal government in April for people who had lost their job or had their hours reduced.

Industry Super Australia chief executive Bernie Dean said Tasmanian workers who accessed their super now “face a looming tragedy of retiring with less and being more reliant on the pension”.

He urged the federal government not to back away from proposals to increase superannuation to 12 per cent by 2025, amid warnings from the Reserve Bank of Australia it could potentially cost jobs and mean wages remained low.

“The only realistic way workers can make up the difference is with the promised increase to the super rate,” Mr Dean said.

“Ditch the super increase and we will be saddling the next generation with a whopping pension bill.”

Assistant Minister for Superannuation and Financial Services Jane Hume said the early release of super had been “a lifeline” for many Australians.

“Australians understand that there is a trade off, but for many thousands of people, paying down debt, getting on top of their finances in these uncertain times outweighs the benefit of locking up those funds for decades into the future,” Ms Hume said.

Prime Minister Scott Morrison last week acknowledged concerns about the legislated super guarantee increase to 12 per cent, but has yet to announce whether he will make changes to the plan.