Aussies raid super account

NEARLY half a million Australians have reduced their retirement balances to zero through early access to superannuation.

Latest figures by Industry Super Australia estimate more than 480,000 workers have wiped their super balances clean in the first round of the Government’s COVID-19 support measure. A staggering 395,000 are aged under 35.

As of Wednesday, account holders who are facing financial hardship due to the pandemic are able to access a second $10,000 slice of super in the new financial year.

ISA, which represents 15 industry funds, said the incoming second tranche would heighten fears more Australians would make a big dent in their savings.

The economic rupture caused by the pandemic has prompted a group of Coalition backbench MPs to call for the scrapping of the legislated rise of the superannuation guarantee to 12 per cent.

Their call has been vehemently opposed by ISA.

ISA chief executive Bernie Dean said the increase would be imperative in repairing the damage done to individual retirement balances.

“To have hundreds of thousands wiping their savings out midway through their life is a tragedy waiting to happen,” Mr Dean said.

“The Prime Minister and Treasurer must stick by their promise to increase the super rate because it’s critical to helping these people rebuild savings they’ve wiped out.”

According to its research, 395,000 people under the age of 35 have cleaned out their super accounts, with industry funds siphoning out $10.3 billion of the total $17.1 billion already paid to members.

Cbus chief executive David Aitkin on Tuesday said the sector must not be treated as an automatic teller machine, and that verification processes to access the scheme should be intensified.

ISA noted states and territories with a greater reliance on tourism had experienced greater demand for access.

According to ISA, 20 per cent of Queensland’s workforce had requested withdrawal payments, 19 per cent of the Northern Territory’s working population had accessed the scheme, while Western Australia’s rate was 16 per cent. The Australian average is 15 per cent.