How you can claim ANOTHER $10,000 from your superannuation – after millions of Australians dipped into theirs during the coronavirus pandemic
- Cash-strapped Aussies can access an additional $10,000 from super from July 1
- More than 2.2 million have withdrawn from their super recently due to pandemic
- Financial advisers warn of consequences for those who access their super early
Australians facing financial distress during the coronavirus pandemic will soon get another chance to dip their superannuation early.
But experts have warned about the consequences in doing so after 2.2 million cash-strapped Australians accessed their super in recent months.
Aussies will get another opportunity to withdraw an additional $10,000 when the 2020-21 financial year begins on Wednesday.
More than 2.2 million approved applications have withdrawn a combined total of $18.5 billion since the federal government launched its early access to superannuation scheme in April to provide relief for those hit hard by the pandemic.
Australians are urged to consider the long term ramifications before accessing their super before retirement. Pictured is a Sydneysider getting an early morning workout on Monday
But Industry Super Australia chief executive officer Bernie Dean had a dire warning, especially for those who have accessed their super recently.
A 35-year-old who withdraws $10,000 now will see a $19,411 reduction in their super when they retire at 67, according to the MoneySmart calculator.
‘It does come with a pretty hefty price tag … but we recognise that young people don’t necessarily think about the long-term,’ Mr Dean told News Corp.
‘We also recognise they may not be in a position to make up the lost ground themselves.
He warned early withdrawals can ‘wipe out’ your life and income protection cover if your super balance falls low.
More than 2.2 million Australians have dipped into their super since April after falling on hard times during the coronavirus pandemic. Pictured are Centrelink queues in Sydney
Association of Superannuation Funds of Australia’s chief executive Dr Martin Fahy agreed and believes early release should be considered as a last resort.
‘Drawing down on your super early will have a substantial impact on your long-term retirement savings and the more you take out the greater that impact will be,’ he said.
If you decide to withdraw from your super, Dr Fahy advises to make those funds last as long as possible and only spend it on necessities.
Cash-strapped Australians will get an other opportunity to access their super from July 1
Applications for early super access open July 1 and are available until September 24 via the MyGov website.
Australians can only access their super if they’re unemployed, are eligible to receive a job seeker payment, have been made redundant since January 1 or had their work hours reduced by at least 20 per cent.
The MoneySmart website advises Australians to seek government assistance and speaking to their bank or lender about possible financial assistance before dipping into your super.