Financial services firms and associations have largely welcomed the government’s decision to allow those affected economically by the coronavirus crisis to access up to $20,000 tax free from their super accounts over the next two years.
The measures, announced yesterday as part of the government's second stimulus package to counter the economic effects of the virus, will allow individuals in financial stress as a result of the coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
In a statement following the release of the stimulus package, FSC chief executive Sally Loane said the council supported the extension of eligibility for early release of super.
“We understand that the government’s temporary measures for early access to $10,000 tax-free this financial year and another $10,000 the following financial year will apply only to those in severe economic hardship, such as people who have lost their jobs as a result of the coronavirus crisis,” Ms Loane said.
“Accessing super should not be the default response to providing income support for Australians in need over the short term, so we are pleased to see that this is a temporary measure as part of a broader income support package.”
MLC Wealth chief executive Geoff Lloyd said it was fair that workers be allowed to use their own savings as a last resort in difficult times, and that the group expected the overall super savings pool to be minimally affected.
“This is a sensible package of temporary measures which recognises super is people’s money, it’s the savings of working Australians,” Mr Lloyd said.
“In extreme times like this when people unexpected face financial hardship, it can and should be used. We expect less than 1 per cent of the nation’s super savings pool to be affected.”
SMSF Association chief executive John Maroney said while the association was broadly supportive of the move to allow access to super, there should still be robust rules in place to ensure savings were not accessed unnecessarily.
“In the past it has been our strong view that access to super should be a last resort option, and that the strict rules preventing people from drawing down their super was the correct approach,” Mr Maroney said.
“But we appreciate these are extraordinary times where people could suffer enormous hardship, so in these circumstances, they should be able to access some of their super where they meet the eligibility criteria.”
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