Young Australians have been forced to dip into their retirement funds during the coronavirus pandemic due to flaws in the Federal Government’s support payments, according to the managing director of superannuation fund Future Super.
Kirstin Hunter says gaps in the JobKeeper and JobSeeker payments, which were designed to provide financial assistance to Australians whose employment has been impacted by the pandemic, means some people have “no nowhere else to turn.”
“The villain in this story is not the individuals who are accessing their super,” Hunter told PEDESTRIAN.TV.
“What we’re hearing is that most people who are doing that really do understand the difficulty of that choice, and they feel like they’ve got no other option, because the other policies aren’t going far enough, because they’re in an industry or in a job that isn’t eligible to get the other payments.”
Data from the Australian Taxation office, obtained by the ABC, shows that more than one third of the 1.3 million people who’ve tapped into their superannuation accounts early – that’s roughly 450,000 people – are under the age of 30.
Nearly 23,500 were under the age of 20, according to the Sydney Morning Herald.
Withdrawals under the scheme are capped at $10,000 this financial year, and an additional $10,000 from July 1, 2020.
Citing figures from Super Consumers Australia, Hunter said a 30-year-old who withdraws $20,000 today may lose out on $50,000 when they retire.
“So you’d expect that that sort of ratio would even increase for a younger person because there’s less time for it to accumulate,” she said.
Superannuation “wasn’t designed to support people in this way,” Hunter said, suggesting the government could do more to support vulnerable workers.
JobKeeper is predicted to cover some 3.5 million Australian workers, but is not applicable to migrant workers, nor casuals who have been at their place of employment for less than twelve months.
Treasurer Josh Frydenberg has resisted calls to expand the payment, despite the cost of the scheme being written down some $60 billion from initial estimates.
Hunter’s view has been mirrored by Shadow Treasurer Jim Chalmers, who on Monday said omissions in the JobKeeper scheme – including some casual workers and those the arts and university sectors – led young people to dip into their funds early.
Those withdrawals “will have devastating consequences for the type of income that they can rely on in retirement,” he said.
“For a young person, chances are if they haven’t already cleaned out their super by accessing in the first round, they will in a second,” Hunter added.
“And it doesn’t leave them with anything to fall back on for the future.”Image: Cavan Images / Getty Images