No third tranche of early access scheme, says Senator Hume

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There will be no more digging into super savings early, says Senator Jane Hume, who confirmed yesterday that there will be no third wave of the early release scheme.

“We said early on that this was a temporary package in response to the pandemic. Not something we wanted to set up as a permanent proposition,” said the assistant minister for superannuation, financial services and financial technology.

“The vast majority of calls to my office [in Richmond, Victoria] was about extending the early release of super scheme and it breaks my heart to say no we’re not doing that.”

Senator Hume told the Financial Services Council (FSC) that the first extension of the scheme was “proportionate” and was “limited but powerful”, reported Super Review.

According to the Australian Prudential Regulation Authority (APRA), fund members who accessed the super scheme twice took out, on average, $15,854.

And more often than not, members took out more the second time around.

APRA said the fund members took out, on average, $7402 the first time around and an average of $8452 on the repeat application.

Depending on whose modelling you believe, between 83,000 and 480,000 accounts were drained before the second tranche.

Enabling access a third time round may have depleted even more super funds.

While the senator has confirmed there will be no more early release tranches, there was also no mention in the Budget of the superannuation guarantee increase or super for housing.

When asked if this would end any criticism that the government was ideological on super, Senator Hume said the “accusation that the government is ideological on super always blows me away”.

“[The] productivity commission said super had served Australians well but it’s not efficient, not compulsory and, because government compels people to quarantine nearly $1.10 on nearly everything they earn, we have a responsibility to make it an efficient system,” she said.

“This ideological accusation I find frustrating.

“… we’re not about dismantling the system here; every time I open my mouth everyone in the industry loses their minds.

“We’re here to improve the system so that it better serves all Australians, because there are 16 million out there that rely on it being a good quality, high performing system.”

Which super measures would you have liked to see in Tuesday’s Budget?

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Written by Leon Della Bosca

Leon Della Bosca is a voracious reader who loves words. You'll often find him spending time in galleries, writing, designing, painting, drawing, or photographing and documenting street art. He has a publishing and graphic design background and loves movies and music, but then, who doesn’t?

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14 Comments

Total Comments: 14
  1. 0
    0

    Obviously the government had a brain snap allowing people to access their super. As Einstein once said”Compound interest is the 8th wonder of the world”. You need long periods for super to produce its magic. All the government has done has forced more people on the old age pension in 20- 30 years time. Guess what more welfare – already 10 M on some form of welfare. A few more wont hurt!!. I feel sorry for future generations who have to pay for all this nonsense.

    • 0
      0

      But a huge portion of the working population will be better off with less super anyway, BigAl. The stupid means test system means more super is actually a disadvantage for many, unless, of course, they draw it out and spend it before reaching age pension age.

    • 0
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      Many of us are not forced on the old age pension, BigAl. We actually try our best to get at least the concession card if not some money. Youngagain says it as it is today. I took all of it out as I was afraid one day it would no longer be possible to do that. It is my money and I want to decide how to spend it. You cannot really blame people to see their advantage. Who wants a good balance in super when in the grave? Anyone?

  2. 0
    0

    As Anthony Albanese said in his Budget Reply, Labour governments have been responsible for all of the major social reforms – age pensions, medicare, NDIS and compulsory superannuation. ALP governments have opposed and continue to weaken, wherever possible, all of those reforms. What more is there to say on the matter?

    • 0
      0

      think you have contradicted yourself there Buggsie

    • 0
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      Sorry about that, of course I meant the LNP govt. Thanks for the corrections. Its equally important to remember that sometimes changing government is more about the message than about individual parties. Now is the time for a change as the current LNP govt in Canberra needs shaking out of their complacency and old world thinking.

    • 0
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      Even fools sometimes come out with the truth – but really, they are both very similar. I am sure the problem with pension age change and the GST was discussed behind closed doors before it came to the people. A reason why it was never overturned despite promises. At the end they all piss in the same bucket and they have the same Parliamentary Entitlements which us little sods can only dream of.

  3. 0
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    “Which super measures would you have liked to see in Tuesday’s Budget?”

    I would have liked to have seen that retirees could add to their super. As to drawing super, there are people in real financial strife and they should be allowed to draw their super. Each case should be quickly investigated and a decision made for those who are in genuine need. I understand what super is for and the need to maintain the funds until reaching retirement age but for those who can’t pay rent or mortgages or put food on the table because of something beyond their control, some leniency should be shown.

    • 0
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      From retirement up until age 75, we retirees are (or in my case, were) able to add to our super, up to $500,000 per year (I wish). This was a loophole created for politicians, but all of we Australians are able to access.

      The politicians have never closed the loophole as it has allowed them to pay mega-bucks into their super at very low tax rates (15%). Once we retire, we are able to pay ourselves a tax-free payment to top up our income or pension each month.

      We normal Australians, once we hit preservation age (between 55 and 60) are able to live off savings (assets) and pay all of our income into our super at these low tax rates. Then when we retire, we can annually pay ourselves a tax-free income tapering it down to an allowance to top up our OAP once we choose to go onto the OAP (if we decide to do this). This is called the Transition To Retirement (TTR) and during this phase we can often get all of the senior benefits, depending on how much we are working (part-time/full-time).

      The saving over the standard tax rates for average wages can be more than $15,000 per year. For those on higher wages, it can be much more. I have a friend who is putting an extra $120,000 a year into his super in these final working years. Sure he is one of a select few who is drawing a large income, but anyone can use it and gain. Pity when the government moved the retirement age out, they didn’t also extend how many years we can do this for. It currently ends at 75.

  4. 0
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    What I would have liked to see if supper is to be accessed early is that it could be accessed to allow the payment of HELP debt. It would give the younge higer income earners with a Uni dept a level start. They are the ones that would most likely put in extra super when they are able to catchup what they took out.
    The government would win as they would get more cash flow by the conversion of dept.
    A win win situation in my eyes.

  5. 0
    0

    Like it’s predecessor LNP Governments, Morrison lives only for today. The impact of the early release of Super Funds of reducing both the growth and end result will not impact on the Morrison Government and he doesn’t care for what happens in 20 or more years’ time. Releasing the funds saved this government from spending more money to prop up the economy. And was no doubt a vote winner from those who see Super as unwanted and unwarranted, when they spend that money on gambling booze, new car etc. It’s proven that very few actually needed the funds to put bread on the table.
    Mainly because it was a Labor policy the LNP is ideologically opposed to Super, especially Industry Super that Senator Hume has criticised at every opportunity because it has higher returns and lower fees than the retail Funds run by her mates. end of rant!!

  6. 0
    0

    It is the fault of the government that I am on the pension in the first place.
    When both my wife were earning good wages we were sacrificing in the max into super as prescribed by THE GOVERNMENT so we would have enough to live on without claiming a pension, which we have paid taxes for and should be entitled to do no matter what we have saved, anyway. While were were still able to contribute the GOVERNMENT decided to reduce the max we could salary sacrifice, this stopped us from building our super up to our planned level.
    Now we are relying on a pension.
    I don’t feel guilty about claiming the pension as it is the fault of the government.
    To those younger “Entitled Generation” who think pensioners are a burden on what they call the welfare system, think about all the taxes we hard working generations paid, these taxes provided the infrastructure you all enjoy now, power, water, hospitals, roads etc.
    If you don’t like it get off our roads, stop using our power and water and build your own hospitals.
    We are entitled to pensions but GOVERNMENTS want all the pensioners to go away.
    Do not access your super and harass the powers to to provide what has all ready been paid for by years of taxes.


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