Australians facing unemployment or financial stress due to the coronavirus will be allowed early access to their superannuation savings over the next six months.
Eligible savers will be allowed to draw down up to A$20,000 ($11,519) over the period, the Australian government said Sunday.
Employees made redundant because of COVID-19 or who are facing a 20% or more reduction in working hours, as well as sole proprietors who have seen a 20% or more cut in turnover, can apply to access their retirement savings, Prime Minister Scott Morrison said.
Eligible participants will be able to access up to A$10,000 of superannuation savings for the fiscal year ending June 30, and a further A$10,000 for the first three months of the new fiscal year, starting July 1.
The cost of its early access measure will come to about A$1.2 billion, the government said in a news release. That cost reflects, in part, the government's decision to make early drawdowns of retirement savings under Sunday's stimulus package tax-free. Early drawdowns would normally be taxed at 22% or at an individual's marginal tax rate, whichever is lower, a Treasury spokeswoman said in an email.
The move is part of a broader A$66.1 billion package of additional stimulus measures the government announced Sunday.
The temporary measures will "cushion the impact of what is happening" and allow Australians to "bounce back when we get to the other side," the prime minister said in the news release.
"While superannuation helps people save for retirement, the government recognizes that for those significantly financially affected by the coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings until retirement," a notice on the Treasury's website said.
The new measure could sharply boost super industry "financial hardship" withdrawals, which saw 361,000 account holders take out A$2.9 billion for the five years through Dec. 31, said Alex Dunnin, Sydney-based executive director of research and compliance at Australian financial industry researcher Rainmaker Information.
Australia's Treasury appears to be anticipating about A$27 billion, or roughly 1% of super retirement assets, leaving the system, which at A$20,000 a person would amount to 1.35 million people — or almost 1 in 10 super participants — opting to take money out early, Mr. Dunnin said.