Super rate increase needed to help workers: Industry Super Australia

Picture: SHUTTERSTOCK
Picture: SHUTTERSTOCK

Industry Super Australia says a superannuation rate rise is the only thing that will help the 225,000 NSW workers who effectively wiped out their retirement savings.

New data has revealed more than one million NSW residents withdrew an eye-watering $10 billion from their super early, after the government opened preservation rules and allowed workers to take up to $20,000 from their retirement savings.

The Industry Super Australia (ISA) data revealed almost a quarter of those people significantly reduced their retirement savings.

More than 59,000 Liverpool and Fairfield residents chose to remove money from their super through the government scheme.

ISA chief executive Bernie Dean said with about one in four NSW workers accessing the scheme it will now be vital the government sticks to its promise to lift the super rate from 9.5 per cent to 10 per cent next year, so these workers have a chance to recoup what they have lost.

"The young NSW workers who had to sacrifice their retirement savings to support themselves during the pandemic had been promised a super boost to make it up," he said.

"Ripping it away from them would be a cruel double blow, it would leave them with far less at retirement and saddle these young workers with a whopping pension bill they pay for through higher taxes.

"Super is not a cookie jar for government to raid to solve short-term budget problems, nor is it for housing.

"Busting into super early comes at a steep cost for the individual and future taxpayers, as a society we shouldn't be demanding our young people pay the price yet again."

In the Werriwa federal electorate, which includes Liverpool and surrounds, 20,724 people applied to withdraw money from their super with 28,471 applications paid.

More than $213 million was paid out with the average payment being $7,509.

This left 4942 worker's super accounts effectively wiped out.

The neighbouring McMahon electorate, which includes Fairfield and surrounding suburbs, 19,985 people applied to withdraw money from their super with 27,362 applications paid.

More than $204 million was paid out with the average payment being $7,469.

This left 4919 worker's super accounts effectively wiped out.

In the Fowler electorate, which includes Cabramatta and surrounding suburbs, 18,729 people applied to withdraw money from their super with 25,641 applications paid.

More than $191 million was paid out with the average payment being $7,466.

This left 4634 worker's super accounts effectively wiped out.

In April the government broke open super's preservation rules allowing Australians who had lost their jobs or had hours reduced to access $10,000 in super before July 1 and a further $10,000 until December.

The ISA says accessing super early-career comes at a steep price to savings, a 30-year-old who withdraws $20,000 could have up to $80,000 less at retirement.

There is also a cost to the public purse, as for every $1 taken out by someone in their 30s the taxpayer contributes up to $2.50 in increased pension costs.

ISA analysis also showed that if the super rate increase were cut, an average 30-year-old man who took $20,000 from their super would either lose $180,000 from their retirement or be forced to work until 74; while the average 30-year-old female would need to work an extra eight years or have $150,000 less at retirement.

This story Super rate increase needed to help workers: Industry Super Australia first appeared on Liverpool City Champion.