The Federal government dropped a bombshell on the superannuation industry over the weekend with the announcement that members who had lost income due to the COVID-19 pandemic would be able to access their superannuation balances early. Members can withdraw up to $20,000 tax-free in two transactions – one before 30 June and one after.

Given the significant impacts this could have on individuals and the economy, both in the short and long term, I reached out to two experts for their take on the situation. Jeremy Cooper, Chairman of Retirement Income at Challenger Limited and formerly the Chair of the government’s Super System Review in 2010; and Graham Hand, founder of Cuffelinks (now Firstlinks), and widely regarded as an authority on investing and super.

Superannuation was legislated to be for the sole purpose of providing benefits to members in retirement, but in the current environment, the relevance of that test is being questioned. Hand says that in the current ‘extraordinary’ circumstances he is not one to stand in the way of people needing to draw on their own money to sustain just the basics of day to day living.

 

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