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Early release of superannuation ‘opened up a frontier’ for financial abuse

In response to questions from Labor senator Jenny McAllister, Treasury officials told a Senate estimates hearing that no warnings had been provided to those accessing their super about the threat posed by financial abuse.

They said it would be “very difficult” to determine if someone had been forced to withdraw money from their super on behalf of somebody else, as people used their own MyGov accounts to apply through the scheme.

ATO commissioner Chris Jordan said it was "intolerable" if there were cases of financial abuse through early release super program.

ATO commissioner Chris Jordan said it was “intolerable” if there were cases of financial abuse through early release super program.Credit:Alex Ellinghausen

Mr Jordan said the sheer volume of people accessing their super early would have made it extremely difficult to track cases of financial abuse.

“I don’t want this to sound in anyway harsh, but I think if I put in context here the stimulus measures of the government overall, largely they were to get the money out to people in need as quickly as appropriate,” he said.

But Senator McAllister noted recent comments from Financial Counselling Australia chief executive officer Fiona Guthrie who earlier this month said the early release of super had “opened up a frontier for people to financially abuse their partners”.

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That prompted Mr Jordan to commit to reviewing the current situation.

“That’s intolerable. We will certainly refer back and see what we can do now to find any examples or rectify that,” he said.

Pressed on the lack of knowledge within the Tax Office about possible cases of financial abuse, Finance Minister Mathias Cormann defended the government’s handling of the early release of super.

“I think everyone knows that you have to accept certain trade offs when there is a need for speed,” he said.

“I’m satisfied that our government is motivated by making the best possible decisions for all Australians, including women, and at every election I know that all Australians including women have the opportunity to pass judgement on how they value our performance and how they assess our plans for the future compared to the alternative.”

Senator McAllister said it was clear the government had not considered the threat of financial abuse when pulling together the early super release program.

“Australian women experiencing financial abuse should be more than just an afterthought,” she said.

“Seven months after the scheme began, it’s clear the government has given no thought to the serious risks it poses to women’s economic security or the opportunities it provides perpetrators.”

Ethical fund Future Super says more women are withdrawing their entire superannuation balance than men under the early access scheme.

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While women have taken out less money as a total amount, because they start with lower balances it’s a higher proportion of their account.

On average, women are taking out 21 per cent of their starting balance while men are withdrawing 17 per cent of their money.

“We have petitioned the government to actually repay the superannuation of people who have been forced to access it to get through the pandemic,” chief executive Kirstin Hunter said.

“That would be a very positive step to making sure that individuals, particularly vulnerable individuals, aren’t having to tap into their retirement savings in order to get through a public health crisis.”

If you or someone you know is impacted by domestic abuse, call 1800RESPECT on 1800 737 732 or visit www.1800RESPECT.org.au.

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Shane is a senior economics correspondent for The Age and The Sydney Morning Herald.

Katina Curtis is a political reporter for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.

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