New ATO data provided to the Senate Inquiry into the Government’s COVID response confirms that nearly 1.4 million Australians had to turn to their retirement savings well before Government support even began to flow.
 
Early access super withdrawals have hit $13.2 billion and is equal to the JobKeeper ($8.1 billion) and Coronavirus Supplement ($5.3 billion) payments combined.
 
Today’s figures reveal:
 
·        There is a 1600 per cent increase in hardship claims in the last month compared with the entire 2018 -19 financial year.
·        More than 50 per cent of applicants were 35 or under.
·        More than 33 per cent of applicants were 30 or under.
·        Under the ATO’s self-assessment automated approval system, nobody has been rejected for not being eligible.
·        More than 50 per cent of applicants for the scheme withdrew the maximum possible, suggesting where the maximum amount was not taken it is likely that they were only limited by not having $10k in their super account. 
 
It is alarming that the Liberal’s robo-release early access super scheme has seen so many Australians resorting to accessing their retirement savings, instead of receiving timely Government support.
 
With 450,000 people under 30 forced to draw down on their super, young people continue to bear the brunt of this crisis.
 
Industry analysis estimates that a 20-year-old who accesses the full $20,000 available under the scheme could lose more than $120,000 from their retirement balance. A 30-year-old who accesses $20,000 from super now could lose about $100,000 when they hit retirement, and a 40-year-old could lose more than $63,000.
 
The Government’s plagued early access scheme was designed for speed, not accuracy.
 
In early May, ATO was forced to temporarily freeze the scheme because of fraud. The AFP have still not ruled out the involvement of organised and offshore crime.
 
Government Ministers are also yet to reveal how many fraudulent claims have been made, or what the Government is doing to compensate victims after the ATO directed their super fund to make a payment to a fraudulent account.
 
This week it was reported that there is an alarming trend of super funds being plunged directly into online gambling. If true, the embattled Government scheme may be boosting the profits of dodgy overseas gambling businesses, instead of stimulating the economy and addressing real hardship cases.
 
The Treasury Secretary made it clear that no one believes economy will “snap back” any time soon.
 
Australians are going to be paying the price for Scott Morrison’s policies long after they retire.