The gap between the wealthy and the most vulnerable appears to have increased in superannuation land, according to new data from the Association of Superannuation Funds of Australia (ASFA).
In a report titled The COVID related early release of superannuation – a retrospective look ASFA makes the point that women, single parents and the unemployed were more likely to clean out their superannuation accounts when given the chance to access their funds early under the COVID-19 hardship scheme.
Their analysis shows that from the pre-COVID period to September, the proportion of women in the lowest income group saw their superannuation account fall by 6 percentage points, while their male peers reported only a 2 percentage point decline as a result of the early access withdrawal.
Meanwhile, the percentage of single parents with a superannuation account declined by 6 percentage points, from an average of 79 per cent in the pre-COVID period to 73 per cent in the COVID period.
For those unemployed, a decline of 10 percentage points was observed from a much lower base, leaving just 45 per cent reporting having any superannuation.
“The COVID-19 early release of superannuation scheme was a success in terms of making a large number of payments in a very short period of time to those Australians in need,” said ASFA Deputy CEO, Glen McCrea.
“However, young people, women, single parents and the unemployed paid a high price in terms of the cost to their retirement savings.”
The early access scheme allowed eligible employees to submit two applications for up to $10,000 each from their superannuation fund, one application in the 2019–20 financial year and one in the 2020–21 financial year.
A large volume of applications, in excess of 3 million over the two tranches, was expected by the Government when the measure was announced, given the extent of COVID-19 (coronavirus) impacts on the community.
But wow was this number exceeded! Australian Taxation Office (ATO) data indicates that between 20 April 2020 and 31 December 2020, the ATO received 4.78 million applications with a total of $39.2 billion of superannuation requested for early release.
Financy is a fearless believer in economic equality, which uses data insights to accelerate progress and support organisational efforts in diversity, equity & inclusion.
