According to the superannuation regulatory authority APRA (Australian Prudential Regulation Authority), approximately 2.7 million applications for early release from super have been made, since the scheme started.
The second tranche of early release of super of up to $10,000 will close 24 September.
With the first wave of applications, the ATO, incredibly to us, did not check people for eligibility (unlike Job Keeper). Therefore some people applied for early release even if in many cases they were aware that they were not eligible. With this second wave of applications, eligibility will be checked more closely.
If you (or family members) were thinking of withdrawing the early release of super:
- …then re-contributing into super as a tax deduction, then the ATO can apply penalties for tax avoidance.
- …then trying to use the money as a deposit to get into the housing market, the banks will regard you as basically being insolvent because you have applied for hardship provisions, effectively.
- …and you don’t really need it, calculate the difference to your retirement savings, which is what super is meant for. Statistically, compound interest will make the end difference much greater to your retirement income taking that money out now. Can you manage without that super withdrawal?
- …then consider the effect on your insurances in super – will there be enough money left in the fund to keep the insurances current?
- …look at the sharemarket share values – the market has fallen since March 2020, particularly with banks which for years have been sharemarket favourites; if you take money out while the market is low, then you are crystallising those losses, and will miss out on a market upswing once businesses pick up once more.
