BY JULIETTE CAPOMOLLA
Finance experts have cautioned Australians against accessing superannuation early and the warning is directed at one group specifically: women.
For Australians suffering financial hardship at the hands of COVID-19, the federal government has permitted them to dip into their superannuation funds from April 20.
Over the next year and a half, Australians can release up to $20,000 of their retirement funds early if they meet the eligibility requirements.
This scheme is one of many within the government's second stimulus package worth $66 billion.
Verve Super promotes itself as “Australia's first super fund for women”. Its CEO Christina Hobbs warned withdrawing money from your super now will have a significant impact on your future wealth.
“It's important for anyone to realise that this is not an offer of assistance from the government. Your super is money you already own,” Ms Hobbs said.
“By accessing it early, you are likely reducing your retirement income later in life.
“I think it's a really awful choice for people to have to face and I'd rather have seen the government bring in stronger income protection assistance faster.”
Ms Hobbs said the federal government's scheme would likely have a disproportionate impact on Australian women, who already retire with 47 per cent less super than men.
“As there is no super paid on carers leave, including parental leave, and as women undertake the bulk of this work, young women who take money out of super today, are more likely to struggle to build their balances back up over time.”
Additionally, women are more likely to be employed in casual work than men, according to the Australian Bureau of Statistics.
“As women are more likely to be employed in casual work, and lower paid work, sadly it's likely that women will be even more likely than men to need to take their super out due to COVID-19.”
Ms Hobbs recommends seeking personal financial advice in these challenging times.
Analysis conducted by Industry Super Australia shows that releasing the maximum $20,000 under the scheme could put a 40-year-old at risk of losing $63,000 from their retirement balance, a 30-year-old at risk of losing $100,000 and a 20-year-old at risk of losing $120,000.
Australian National University student Melissa Magpie has discouraged those around her from accessing their super early due to the likelihood of future financial pain.
“The government hasn’t appropriately educated the public about what taking money out of your superannuation really means,” Ms Magpie said.
But Ms Magpie does not blame those looking to rely on the scheme.
“They are caught between a rock and hard place, and many need funds immediately to survive.
“But imagine if we lived in a world where people’s basic needs were appropriately met by easily accessible social support during times of extreme hardship, and no one even needed to consider screwing over their future, retired self.”
According to Ms Magpie, the gender pay gap is only becoming more obvious.
“The very people who are chronically underpaid across Australia – supermarket workers, childcare workers, nurses and other retail staff – are the most essential workers in our economy.
“And guess who these industries are dominated by? That’s right, women.”