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APRA eyes accounts drained by early release

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APRA has indicated it is considering collecting and publishing more data about the early superannuation release scheme, including details around how many accounts are being cleared out to zero.

Speaking to the select Senate committee on COVID-19, APRA deputy chair Helen Rowell said the regulator is thinking over expanding its monitoring of the funds and their payments under the scheme. 

APRA received a number of questions about how many members account had been wiped off all funds as a result of people accessing their super early, during the public hearing on Thursday, but the body indicated it was unable to answer.

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The chair of the committee, senator Katy Gallagher, said the issue of drained accounts is a “prudential issue that APRA should be interested in”. 

“We are currently reviewing the data that we collect… and considering expansion to collect more granular information around some of the demographic and other information to do with the scheme, including the number of accounts that go to zero,” Ms Rowell said. 

She added a number of accounts have been drawn down to zero as a result of partial payments, where recipients had applied for more than what was in their accounts. 

“There have been about 117,500 of those to the 24th of May, that is a total of $405 million in payments and it represents about just over 7 per cent of all of the applications that have been paid to date,” Ms Rowell said.

“It’s important to bear in mind that some of those would have been drawn accounts down to zero but the accounts remain open because there will be future contributions. And it also doesn’t necessarily equate to the number of individuals, it relates to the number of applications.”

While APRA has been monitoring payments from funds, the data it publishes every two weeks is lagged – the latest early release data available holds information on payments to 17 May. 

Treasury had previously told the COVID-19 committee that 1.62 million applications had been approved as at 21 May, with the total set for release being $13.2 billion.

Despite having updated figures on hand from the ATO, which receives, approves and sends on applications to the funds, Ms Rowell and the other APRA representatives would not disclose the newest data to the COVID-19 committee.

As a consequence, it faced pushback from Senator Gallagher.

“Treasury released this figure to the committee last week, which also Tax Office [data]. Do you have the updated Tax Office figure with you today?” Senator Gallagher asked. 

“I do,” Ms Rowell said after a pause. 

“Right, but you’re preferring not to provide that to the committee, even with the caveat that it’s Tax Office data?” the senator said.

APRA chair Wayne Byres stepped in, saying the data had been provided to the regulator under a confidentiality restraint. 

“But maybe to try and answer your question in a slightly different way, if you look at the run rate on our data and also look at the run rate on the Tax [Office] data that Treasury had released, the figure of releases would be something in the order of $14 billion,” Mr Byres said.

“Okay I accept that it might be uncomfortable in terms of interdepartmental relations, but there is no area of public expenditure that this committee is not allowed to probe and scrutinise,” Senator Gallagher later said in the hearing.

“So I’ll just note that, I won’t press the issue today but it is within your capacity to provide us with that information, we would deal with it in the sense that it was ATO data and not necessarily approved for release by them.”

The regulator also revealed it had been given a little under one day by the government to consider and advise on the early access scheme, when it first came to fruition, on 18 March. 

“We were asked to give our view on the implications from a super system perspective,” Ms Rowell said. 

The government then made changes to the regime’s parameters and features, presenting the updated scheme to the regulator “a couple of days later”, according to Ms Rowell. The changes did not change APRA’s view at a system level.

ASIC on the other hand, had not consulted on the scheme.

 

APRA eyes accounts drained by early release
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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