For thousands of Australians, the Federal Government’s Super Early Release Scheme – introduced in the wake of the coronavirus-fuelled economic crisis – has been dubbed a “lifeline”.
Under the scheme, as many as 2.1 million people applied to access their superannuation early, with those deemed eligible able to grab $10,000 from their super last financial year and a further $10,000 in 2020-21.
Last month, Australian Prudential Regulation Authority figures showed $14.8 billion had already been withdrawn.
At June 7, 2.12 million applications to access super early had been lodged with the tax office.
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Assistant Minister for Superannuation, Jane Hume, said that the decision to take the money out now – or build a nest egg over time – was a “big deal”.
“For many people, the benefit of taking that money out now outweighs the benefit of leaving it in the future,” Ms Hume said.
“The government isn’t in the business of telling people how to spend their money.”
Critics have argued accessing your superannuation should be a “last resort” only, after it was revealed by Industry Super Australia (ISA) about 480,000 Aussies had cleared out their funds completely, and that accessing cash now would have dire long-term consequences for retirement nest eggs.
On average, about 15 per cent of Australian workers have accessed their super early.
Three states were above the national average – Queensland at 20 per cent, Northern Territory 19 per cent and Western Australia 16 per cent. Only 8 per cent of ACT workers accessed their super early.
Those critics have taken it one step further following a report on 60 Minutes on Sunday night that showed some Australians who have withdrawn $10,000 from their superannuation splashing the cash on “non-essential luxuries” like plastic surgery and new cars.
Cassandra Garcia, a 41-year-old mother and businesswoman, put the cash toward a “series of surgeries” that included a boob job and liposuction on her torso, legs and chin, purchases that she deemed “essential” to her own self-confidence.
Asked if she’d taken the money out in the spirit that the government intended, Ms Garcia said she’d “definitely put the money back into the economy, I haven’t just left it in my bank account”.
“The reality is, I’m OK with my decision. At the end of the day, this is all of our money, it is not money that we’re loaning from the bank,” she said.
According to some, though, this behaviour is “obviously breaking the rules”.
“If you’re spending your super draw down on a boob job, you’re obviously breaking the rules,” ABC business reporter David Taylor wrote in a tweet.
“And ill-informed,” fellow ABC business reporter Rachel Pupazzoni replied.
Others commented it was “laughable” that people like Ms Garcia had been approved to withdraw their super.
“Classic short-term thinking from the government and from those who’ve taken the money but aren’t experiencing financial hardship,” another viewer commented.
“Have fun now and who cares about future. Hope they don’t whinge about not having enough money when they’re trying to survive on pension.”
“No thought for the future. Appalling that some consider a car and cosmetic surgery essential,” wrote another, in response to Ashleigh Masterson, a 26-year-old who lost her job at the beginning of the COVID-19 pandemic, using part of her withdrawn super funds to purchase a new car.
But while many were critical of people’s “frivolous” spending, others defended their financial decisions, claiming “the money belongs to the individuals”.
“If they choose to spend it freely, let’s not forget it will provide a boost to the economy,” one viewer commented on Facebook.
“There is no right or wrong in this situation but I for one am someone who desperately NEEDED it and am so grateful for its help!!!” wrote another.
“A minority will always use things in a way that it’s not intended, the majority need it. It’s people’s money at the end of the day.”