Coronavirus: Government greenlights early access to superannuation
Australians who have lost work due to the new coronavirus outbreak will be allowed to access up to $20,000 from their superannuation, Prime Minister Scott Morrison announced on Sunday.
Starting mid-April, workers and sole traders who have lost part or all of their income as a result of the ongoing COVID-19 pandemic would be eligible to make tax-free withdrawals of up to $10,000 this financial year and another $10,000 next financial year.
To be eligible, applicants must meet at least one of the following requirements:
- Be unemployed.
- Be eligible to receive a job seeker benefit, youth allowance for jobseekers, parenting payment or special benefit or farm household allowance.
- Have been made redundant or had their working hours reduced by 20 per cent or more since 1 January this year.
- If you’re a sole trader, your business operations have been suspended or your turnover has fallen by 20 per cent since 1 January this year.
Treasurer Josh Frydenberg said the super fund regulator APRA has assured him the easing of access to super would not have “a significant impact on the industry overall”.
Ben Butler of The Guardian warned that allowing withdrawals will diminish the super funds’ ability to invest in long-term, high-growth assets and may lead to redemption freezes, which some funds experienced during the global financial crisis.
The Australian Institute of Superannuation Trustees’ chief executive officer Eva Scheerlinck said people should only access their super as a last resort.
“Australians who are facing financial hardship to access all other sources of income measures before tapping into their super,” she told The Herald Sun.
The initiative was announced as part of the federal government’s second stimulus package. The $66 billion package also included $750 payments for those on the age pension, carers allowance or family tax benefit and Commonwealth senior card holders, which will be made automatically from July 13.