Thousands who withdrew super early 'forced to do so'

At least 70,000 people who withdrew part of their superannuation through the pandemic early release program did so under threat of coercion, an industry group has found.

The superannuation early release program was introduced in March 2020 by the federal government and concluded on 1 January 2021.

In that time, around 3.5 million Australians used the scheme to withdraw money from their super account. The average amount withdrawn per person was about $7000 and the total amount withdrawn was more than $36 billion.

Of that 3.5 million, 1.5 million were women and now shocking new estimates from the Australian Institute of Superannuation Trustees (AIST) reveal that around 70,000 of those women withdrew their funds because of family coercion.

Read: As you count your nest egg gains, analysts warn of bumps

The scheme allowed members to withdraw up to $20,000 from their super accounts, but AIST CEO Eva Scheerlinck says the money was “too easy to withdraw” and left women in domestic abuse situations vulnerable.

The AIST is calling on the government to take steps in this year’s Federal Budget to tackle coercive financial control in domestic situations, saying it is part and parcel of its previous election promise to deal with family violence.

“AIST requests that the government undertake a comprehensive assessment of the number of women who were coerced into accessing their superannuation during the early release of superannuation scheme and the detrimental financial impact this will have on their retirement,” Ms Scheerlinck says.

“This information is critical to informing future policy decisions and avoiding unintentionally facilitating abusive behaviour and also aligns with the government’s commitment to end family violence.”

Read: Shock number of super funds failing to meet APRA’s benchmarks

On top of addressing issues of coercive financial control, the AIST is looking for the government to expand its Your Super, Your Future performance test to include all funds registered with the Australian Prudential Regulation Authority (APRA).

The controversial performance test forces underperforming super funds to notify their members in writing of their poor returns.

Last year was the first year these changes took affect and a total of 13 super funds were required to contact their members.

“The scope of the YourSuper comparison tool is only about ‘some of your super’,” says Ms Scheerlinck.

“The AIST proposal is for an AllYourSuper comparison tool that would provide a demonstrable benefit for almost all Australians.”

Read: Government pledges to boost retirement savings

Despite the economic doom and gloom over the past year, Australian super funds delivered record returns of nearly 20 per cent in 2021.

But the AIST says the figures mostly reflect the accounts of those already well-off and that Australia’s superannuation system needs to be made fairer for all.

“Bumper super returns in 2021 are good news for those who benefit, but the figures disguise the fact that many Australians are being left behind in their retirement,” Ms Scheerlinck says.

“This includes women, low- and middle-income earners, and vulnerable people including those experiencing family violence.

“Although our retirement savings system is among the best in the world, the government has a great opportunity with the next Budget to ensure it works to the benefit of all Australians, regardless of their gender, culture, education or socio-economic background.”

How can society stop coercive financial control of women? Is it something that super funds should be addressing? Let us know in the comments section below.

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Written by Brad Lockyer

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