A super fund perspective on the Federal Government’s financial support package for individuals.
Super funds are playing their part in the country’s economic response to the COVID-19 crisis.
“As the impact of COVID-19 has affected businesses across the economy, a significant number of people are experiencing – at best – constraints on their income, or – at worst – some form of financial hardship,” says First Super’s Chief Executive Officer, Bill Watson.
“As an Industry SuperFund, we are focused on helping our members and employers with information on financial support available and practical assistance during this challenging time.”
First Super shares its guide to COVID-19 financial support and other assistance below.
To help Australians through the COVID-19 crisis, the Federal Government is providing a range of financial support. This assistance includes:
- JobKeeper Payment – helps businesses significantly impacted by COVID-19 to cover the costs of wages.
- Income support for individuals – eligibility to Government income support payments has been expanded and a new, time-limited Coronavirus supplement of $550 per fortnight applies.
- Payments to support households – two separate $750 payments are being made to social security, veteran and other income support recipients and eligible concession card holders.
The is also supporting individuals and families affected by COVID-19 through a range of measures.
States and territories have also announced their own stand-alone measures for supporting individuals, communities and businesses through the current crisis. Check their dedicated COVID-19 pages for specific details on how you can access financial and practical support.
Other sources of help
A wide range of financial institutions and businesses have announced financial support measures and assistance to help customers through the coronavirus crisis.
The dedicated COVID-19 page on the Moneysmart website – moneysmart.gov.au/covid19 – has links to advice and assistance. This online hub covers:
- contacting banks or lenders about pausing or reducing loan repayments
- speaking to rental agents or landlords
- payment extensions or instalment plans with utility and phone service providers.
Temporary early access to superannuation savings
The Federal Government is allowing temporary early release of superannuation savings to help workers financially affected by COVID-19.
Under this measure, eligible individuals can apply directly to the Australian Taxation Office (ATO) through the myGov website to access up to $10,000 of their superannuation before 1 July 2020, and up to a further $10,000 from 1 July to 24 September 2020.
Members who access their super will not pay any tax on amounts released and the funds withdrawn will not affect Centrelink or Veterans’ Affairs payments.
“The important take-away with this measure is that super is a long-term investment and your savings for retirement, so should be used only as a last resort,” adds Bill Watson.
“We recommend that super fund members check other sources of financial and emergency support available to them before applying to access their super, given the impact on retirement outcomes.”
What to consider before applying
Before applying to access your super now, you need to know:
- the possible long-term impacts on your super account balance at retirement
- the risk of any insurance you hold with your account stopping due to insufficient funds
- your super account being closed if there are no funds left in your account.
“If you really do need the money now, think of it as a loan,” says Bill Watson. “When you’re back on your feet, make extra super contributions to reduce the impact on your retirement balance.”
How to apply
Super funds cannot accept applications for this payment. The only way to apply is through the ATO via the . If you experience difficulties, contact the ATO on 13 10 20 for help.
Members can apply only for money that they have across all their super accounts up to $10,000.
First Super’s Temporary Early Access to Super web page – firstsuper.com.au/temp-early-access –provides more details on early access to super, the eligibility criteria, and links to start the process.
If you are a First Super employer or member and you wish to discuss this or any other super matter, contact its Member Services Team on 1300 360 988 or email@example.com.
This article was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as Trustee of First Super (ABN 56 286 625 181). The content may contain general advice which has been prepared without taking into account your objectives, financial situation or needs. You should consult the Product Disclosure Statement (PDS) www.firstsuper.com.au/pds before making any investment decision.
Image: Bill Watson, CEO First Super