Early super withdrawals used to pay down mortgages – ABS

A new report finds that many Australians who took advantage of the COVID-19-related early release of super scheme used the funds to pay down home loans

Early super withdrawals used to pay down mortgages – ABS

Australians who accessed their superannuation during the COVID-19 pandemic used the cash primarily to pay down home loans and other existing debts and meet household bills, according to the Australian Bureau of Statistics.

At the outset of the pandemic, the federal government instituted a program that allowed Australians to access their super if they claimed financial hardship due to the economic downturn. The scheme allowed super fund members to access $10,000 in both the 2020 and 2021 fiscal years.

A new report from the ABS found that the majority of funds accessed through the early release of super program went to meet bills and pay down existing debts, according to The Australian. ABS director Dean Adams said 29% of people who drew on their super paid down their mortgage, while 27% paid bills. Another 15% used the cash to meet personal debts like credit cards.

“We found that for people who accessed the scheme twice, the average total amount withdrawn was $17,441,” Adams told The Australian. “The average single withdrawal was $7,728 for the first opportunity and $7,536 for the second.”

Read next: AFSA pushes back on proposal to use super for home deposits

Superannuation Minister Jane Hume called the program “an overwhelming success.”

“More than 3 million Australians weighed up the decision, and decided that withdrawing their super was the best financial decision for them,” Hume said.

The ABS also found that one in five households were supported by JobKeeper payments during the pandemic, The Australian reported.

Ryan SmithRyan Smith is currently an executive editor at Key Media, where he started as a journalist in 2013. He has since he worked his way up to managing editor and is now an executive editor. He edits content for several B2B publications across the U.S., Canada, Australia, and New Zealand. He also writes feature content for trade publications for the insurance and mortgage industries.
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