New figures released by the Australian Bureau of Statistics (ABS) revealed that almost a third of those who applied for early access to their superannuation as a result of covid-19 enforced financial hardship have used the money to pay their mortgages, rent or other household bills.
The statistics were released on Wednesday 14th April as part of the ABS’s most recent “Financial Resources Report” which showed that 29 percent of people used the money on household related bills.
On top of this, 15 percent used the money to pay off credit cards and personal loans. 13 percent used the money they withdrew from their super accounts early to add the money to their savings.
The ABS revealed that for people who accessed the scheme twice, the average total sum of money that was withdrawn was $17,441. The average single withdrawal was $7,728 for the first amount and the average was $7,536 for the second amount of money that was withdrawn.
The Australian Governments covid-19 enforced early access to superannuation scheme has enabled taxpayers experiencing financial hardship an opportunity to withdrawal up to a maximum of $20,000 over two transactions, over two financial years, once prior to 30th June and another after the 30th June. The incentive concluded at the end of 2020.
Figures from the report indicated that the average private household include, including; investments, salaries and superannuation across Australia remained stable at $2,117 per week as of September 2020.
Close to one in five or 19 percent of Australians who withdrew money under the scheme were receiving the JobKeeper payment through their employer or their own business.
Half of the households recorded in the data owned their dwelling with a mortgage. Almost 47 percent were couple families with dependent children.
The Australian Bureau of Statistics has made JobKeeper estimates where it was known to the employee that either their employer, or their own business, was receiving the JobKeeper wage subsidy which, in September last year, was $1,500 per week.
The average government payments have risen by $89 per week per household, compared to the previous September quarter of 2019, to $300 per week.
Over 1.3 million households consisted of an individual who was receiving the Coronavirus Supplement payment of $550 per fortnight.
The scheme giving Australians early access to their superannuation ended on 31st December 2020. According to figures released by the Australian Tax Office (ATO), almost 3 million Australians withdrew a combined total of $36 billion out of their superannuation accounts.
Only Australians who were unemployed, eligible for some welfare payments, or had their hours or sole trade income reduced by 20 per cent were eligible to withdraw money from their super accounts.
People who have been critical of the scheme argue that people withdrawing money from their super now to meet short-term financial needs are sacrificing long-term compound on their superannuation balance which may result in a more comfortable and earlier retirement.
When the scheme was originally announced in April 2020, the Australian Federal Police began to investigate any attempts that were made to defraud the scheme.
As of April 2021, no penalties have been imposed. The ATO has revealed that some applicants have made genuine mistakes when applying to withdraw money from their super despite being ineligible.
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