The Australian Institute of Superannuation Trustees (AIST) has urged the Government to urgently consider a range of enhanced income support measures to help people experiencing financial hardship, as well as those likely to experience hardship in the near future.
While AIST accepts that access to super may be part of an overall income support package, any tapping into super savings should be done in a way that minimises long-term consequences for working Australians who shouldn’t be forced to crystalize financial market losses.
AIST CEO Eva Scheerlinck said the super industry was deeply concerned that a great many of its members already faced severe financial hardship through having lost their job and the Government had a responsibility to make the right levels of cash available to those in need.
“Australians impacted by the crisis shouldn’t be doubly disadvantaged by shouldering the brunt of the crisis through their retirement savings,” Ms Scheerlinck said.
“It is the primary responsibility of the Government to provide income support to people in need. While the super industry stands ready to help in the best way it can, knee-jerk policy responses that see members crystallizing sharemarket losses and funds facing liquidity problems would not be in the best interests of members nor the Australian economy.”
Ms Scheerlinck said profit-to-member super funds were open to considering a new temporary mechanism to assist members suffering financial stress as long as the Government was the primary source of income support.
Such a mechanism should be administrated by the ATO using their existing administrative processes, be capped over a set time period, and not require members’ funds to be accessed until job and financial markets have recovered.
Currently, the eligibility requirements to access super under financial hardship include 26 weeks on Centrelink income support payments.
