World News – AU – Super release is slowing, but nearly 3 million Australians have drawn billions from retirement assets

The controversial coronavirus measure, with which Australians affected by the pandemic can use their retirement provisions, will be closed tomorrow.

But not before nearly 3 million people have withdrawn a total of $ 36 billion from their super accounts, according to the ATO.

The Treasury Department originally estimated $ 29. 5 billion would be called, but the program would then be extended until the end of the year in light of Victoria’s second coronavirus lockdown.

Just over $ 20 billion had been withdrawn by the end of June, and in July the Treasury Department estimated that $ 42 billion would be available under the program.

The final grand total is expected to be less than this number, indicating that usage of the system slowed in the second half of the year.

The ABC reported in September that more than a quarter of those who had access to old-age pensions under the early release program made their decision within a day.

Critics argue that those who withdraw their money now to meet short-term financial needs are sacrificing long-term compound interest on their retirement assets, which could help make retirement more convenient.

Shortly after the system was introduced in April, the federal police began investigating attempts to defraud the system.

Only those who were unemployed, entitled to social benefits, or whose hours of work or trade income were reduced by 20 percent were eligible.

« Only in serious cases where an applicant has made an application on purpose and knows that they are ineligible will the ATO impose penalties. « 

In situations where an ineligible applicant has raided their savings, the amount withdrawn by the tax office becomes taxable income.

Liberal MP Tim Wilson was criticized earlier this week for encouraging people to withdraw their super to help fund a home purchase.

« For another 4 days, you may now have access to your super-savings to advance a purchase: cheaper & earlier. « 

Treasurer Josh Frydenberg said in March the move would « give Australians under financial strain due to coronavirus access to more of their own money in superannuation ». .

In response to Mr Wilson, Labor MP Andrew Leigh tweeted at the ATO asking, « Is my Liberal colleague encouraging people to break the law by accessing Super to buy a house? »

Before the system was introduced, in extreme cases, e.g.. B.. if you have been unemployed for six months and cannot cover your family’s living expenses, you may have early access to Super.

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Superannuation in Australia, Australian Tax Office