A new study by the Department of Human Services shows that record numbers of Australians are accessing their superannuation before retirement.
The department’s research found that more than 16,000 applications for early super access were made in the 2014 to 2015 financial year and 11,700 of these applications were approved. Approximately $148 million in early super has been released this financial year to date.
The amount of superannuation that applicants are accessing has also increased. This year applicants took an average of $12,600 from their superannuation funds, compared to $12,300 in the 2013 to 2014 financial year.
Approved applicants sought access to their superannuation for a number of reasons, including terminal illness diagnoses, mortgage defaults, and permanent incapacitation.
While approvals for this financial year sit at 73 percent, compared to 63 percent in the last financial year, Australian Institute of Superannuation Trustees chief Tom Garcia insists that strict rules surrounding early super access remain in place.
“It is important to understand that early release is limited to certain purposes and financial amounts,” he told News Limited. “Strict criteria applies to make sure the decision is in the member’s long term best interests.’’
While accessing superannuation early might seem an appealing way to get out of a financial jam, Fiona Guthrie of Financial Counselling Australia said that it could make people “worse off.”
“They may have lost access to their funds meant to be used for retirement,” she explained. “You should get some advice and think it through clearly.”
At Chase Edwards, we can suggest better ways to relieve financial hardship than accessing your super and jeopardising your retirement plans. Contact us today on 1300 854 833 (NSW) or 1300 440 281 (Qld) to learn more about our financial solutions.