Australians have dipped into almost half a billion worth of super funds in 2019-20, according to new figures from the Australian Taxation Office.
The figures, revealed to the Sydney Morning Herald (SMH), show that 59,900 applicants accessed super funds on compassion grounds throughout that time frame. This was a 10 per cent increase compared to the year before.
These applicants are separate to those who took advantage of the Covid-19 Early Release Super Scheme, in which $35.8 billion had been withdrawn between April and December 2020.
Some of the requests for super funds, according to the SMH, were for various reasons, such as “IVF treatments, palliative care, home renovations for the disabled, funeral costs, or to avoid foreclosure on homes”.
An increase in requests on compassionate grounds is not entirely surprising, given the economic impacts of Covid-19 that were heavily felt over this time frame. Government assistance schemes, like JobKeeper or the Early Release of Super Scheme, emerged in 2020 to help everyday Australians and business owners get back on their feet.
However, many have now closed applications or had outgoing payments reduced. While this may mean things are looking up for everyday Aussies, we could still see millions more withdrawn from superannuation in 2021.
What you need to know if you’re considering withdrawing super
Serious financial decisions, like withdrawing from your superannuation balance, are never easy, especially when it comes to seeking funds for compassionate reasons. It is just worth keeping in mind that by doing so, you will understandably be taking away from your final balance in retirement.
RateCity research recently highlighted that showed that a 30-year-old who takes out $10,000 today may have an estimated $21,516 less in retirement.
While retirement goals may not be at the forefront of anyone’s mind in this situation, it may be worthwhile considering boosting the funds you withdraw once you’re in a better financial and/or health position.
Further, if you have a partner that is in a stable financial situation, they may want to consider making spousal contributions into your fund to replenish the money you withdrew.