More than 225,000 NSW workers 'completely wipe' retirement savings after super scheme
More than 225,000 NSW workers effectively wiped out their entire retirement savings following implementation of the government's superannuation scheme.
Designed to help those burdened by COVID-19 restrictions, the scheme allowed a total of $20,000 to be taken from superannuation accounts over two financial years.
New data compiled by Industry Super Australia shows that more than one million residents in NSW accessed the scheme, withdrawing around $10 billion.
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New data compiled by Industry Super Australia shows that more than one million residents in NSW accessed the scheme, withdrawing around $10 billion. AAP
More concerning, almost a quarter of these residents completely drained their account, effectively leaving them without any retirement savings.
Long-term modelling shows that if a 30-year-old withdrew $20,000 now, they could have up to $80,000 less at retirement.
The analysis discovered that those most affected by the super-wipeouts were those who arguably needed the money the most: Young workers who live in the Sydney electorate took out the most money of any area in the country, to the tune of $445 million.
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Early access to superannuation was offered to those hurt most by the COVID-19 pandemic. A Current Affair
They were followed by residents in Sydney's inner-west, who took out $306.7 million.
Industry Super Australia Chief Executive Bernie Dean is now urging the government to follow through on promises to lift the super rate from 9.5 per cent to 10 per cent, to help recoup losses from the scheme.
"The young NSW workers who had to sacrifice their retirement savings to support themselves during the pandemic with the confidence that the government has promised to give them a super boost," Mr Dean 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."
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Long-term modelling shows that if a 30-year-old withdrew $20,000 now, they could have up to $80,000 less at retirement.
He argues that accessing superannuation early is a band-aid solution that comes at a cost.
"Super is not a cookie jar for government to raid to solve short-term Budget problems, nor is it for housing," Mr Dean said.
"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."
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