Australia’s jobless rate is expected to hit 1.4 million by June as our economy largely comes to a grinding halt thanks to COVID-19.
The federal and state governments are trying to soften the blow by offering the JobSeeker payment, the JobKeeper payment, and rent relief packages, which combined are worth more than 200 billion to help keep households afloat.
But there are people falling through the cracks.
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As the Prime Minister said this morning on the Today Show, “We’ve got to draw the line somewhere”. But for those fast running out of options – and cash – dipping into their superannuation is starting to look like the only option.
The Federal Government has made retirement funds available to those whose income has dramatically decreased, and 618,000 people have already registered with the Australian Taxation Office to do so.
Under the scheme, individuals can withdraw $20,000 from their superannuation, but finance experts are warning Australians to consider the offer very carefully.
“It is a big worry if you dive into it. You want people to try and get through it as best they can, because when you are talking about someone in their 20s, 30s, 40s even accessing their super. It can mean a big difference at the end of the day when they do retire,” finance expert Effie Zahos told the Today Show.
“If you are 25 and take the full amount out of your super fund – $120,000-odd is what you will lose. When I hear people say I want to take it and pay off my personal loan, if you don’t play catch up with your super fund, are you saying your loan is going to cost you $120,000 in interest?” she added.
Industry SuperFunds further crunched the numbers and worked out that a 30-year-old who accesses $20,000 from super now could lose about $100,000 when they hit retirement and a 40-year-old could lose more than $63,000.
“Members need to know that taking your super now is like selling a house at the bottom of the market - you’ll lose money you would probably claw back overtime," Industry Super Australia Chief Executive Bernie Dean explained.
"Tread carefully and only think about cracking open super after [you've] taken up the extra cash support on offer from the government - super should be the last resort given the impact it can have on your retirement nest egg," he said.
Effie Zahos also makes the point that those considering this option need to be aware of fraudsters.
"We are looking at a million people trying to access super money and it is all being done by text or SMS and so on, you can bet your bottom dollar someone will call you and say 'did you take your money out for your super? I need your bank account details'," she warned.
"Hang up and contact the ATO directly," she added.
Feature image: Getty/Nine.