At least a fifth of NSW early super release recipients wiped out their retirement savings, Industry Super Australia has estimated, as it has pleaded with the government to raise the rate for mandatory contributions to superannuation.
New analysis from the industry body has estimated more than 225,000 NSW workers drained their superannuation accounts through the COVID scheme, out of a total greater than 1 million NSW residents who accessed $10 billion from their super.
This meant around one in four NSW workers accessed the scheme.
People in the Sydney electorate were projected to have taken out the most ($445 million), followed by Reid residents in Sydney’s inner west ($306.7 million).
Industry Super has urged for the legislated increase to the superannuation guarantee rate to continue, which will raise the rate for mandated contributions from 9.5 per cent to 10 per cent in July.
There are doubts around whether the rise will continue as Liberal politicians have signalled the government is seriously weighing up making the increase opt-in for workers, where they can elect to have higher take-home pay or higher super contributions.
The long-awaited Retirement Income Review had also concluded there were limited arguments in favour of higher super contributions.
But superannuation industry bodies such as Industry Super have pushed back, particularly after the early super scheme chipped away at a number of individuals’ savings.
Industry Super has called ditching the SG increase a “cruel blow to those who had to make the tough choice to sacrifice retirement savings”, as well as a move that will place pressure on the pension and taxpayers in future.
Bernie Dean, chief executive of Industry Super Australia, commented workers who have chipped into their superannuation will be left with far less at retirement, as well as a “whopping pension bill they pay for through higher taxes”.
“Super is not a cookie jar for government to raid to solve short-term budget problems, nor is it for housing,” Mr Dean said.
“Busting into super early comes at a steep cost for the individual and future taxpayers, as a society we shouldn’t be demanding our young people pay the price yet again.”
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].
One of the peak superannuation bodies has claimed that industry funds have “significantly outperformed” their retail counterparts and ca...