Treasurer Josh Frydenberg could go down in Aussie economic history as the Santa Claus Treasurer of all time. When you add the Coronavirus supplement to the JobSeeker payment and throw in the $1,500 a fortnight JobKeeper wage subsidy, as well as the early access to $20,000 worth of super, we’re looking at a bag of goodies no Treasurer will ever match!
Some 6.8 million Aussies have accessed the Coronavirus supplement of $550 a fortnight giveaway. Some 900,000 businesses have registered for the JobKeeper payment, which should go to about 6 million workers. And 456,000 people have asked for access to their super, which means super funds are set to lose $3.6 billion. This could be early days as some estimates were initially set at $27 billion, while some alarmists thought it could be as high as $50 billion.
And there could actually be a sneaky, super ‘gift’ in Santa Josh’s bag for people who have been dying to get into the homebuying market but had always had trouble with the deposit.
Adam Creighton, The Australian’s economics editor said on Peta Credlin’s TV programme on Wednesday (when I was a contributor to Peta’s Economics Panel) that a high-flying mate of his was going to access his super to help buy a house! Weeks ago I speculated that could be an option for smarties. And it’s fair to say that many young people could see this as a way of fast-tracking their way to a decent deposit.
Think about it: a couple who are both eligible for this access to super could build up $40,000 over the next few months and leave them in a much stronger position to be a buyer, come the Spring sales period for property.
A lot of young people have worked out that while they have the advantage over their parents, and baby boomers in general, by having a big super nest egg for when they retire, unlike their parents, they face more expensive real estate in the cities. And they lose 9.5% of their wage because of compulsory super.
So the Coronavirus rescue package has given them a once in a lifetime access to their super, which could give them a never-expected chance to get onto the property ladder.
So how do you qualify to access your super?
If you go to the ATO website, look for “Early access to your super.”
To access your super, you go through the ATO online services in myGov.
So who can access their super?
Eligible Australian and New Zealand citizens and permanent residents are able to apply to access their super.
How much can you get?
How do you qualify?
You must pass one or more of these tests:
Do you need to provide proof of your situation?
The ATO says: “You will not be required to attach evidence to support your application; however, you should retain records and documents to confirm your eligibility.”
A word of warning
You should note that withdrawing your superannuation may affect your income protection insurance and life/ total permanent disability insurance cover that comes with your super. And insurance may not be available on accounts that are fully withdrawn or have a balance below $6,000.
The Government warns, “Accessing your super early will affect your super balance and may affect your future retirement income. Consider whether you need to seek financial advice before starting your application.”
For those desperate to buy a home, this Coronavirus might end up being the pandemic they had to have. But it could affect the value of their super when they retire, unless they play catch up and turbo charge their super contributions when they’re paid better in the future.
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