Tens of thousands of Australian families are raiding their superannuation savings to pay off personal debts.
The amount of money taken from superannuation accounts to pay off debt has quadrupled in five years -- going from A$35 million ($39.4 million) in 2001 to A$135.3 million last year, Australian
media reported.
Last year, 16,500 people applied for early access to their super accounts, and the Australian Prudential Regulation Authority approved 13,871 applications -- more than double the approvals in 2001.
Applications for early access to super are approved in cases of severe hardship. Money may also be released to prevent foreclosure of a mortgage or the forced sale of one's home.
To qualify for an early release, the individual must have received federal income support for 26 weeks and must satisfy the trustee that the money is essential for living expenses.
"If you satisfy both of the above tests, the trustee/RSA (retirement savings account) provider may, in any 12-month period, release to you one lump sum payment," the guidelines say.
And the crisis could deepen as there is a good chance of another interest rate rise. If that eventuates, a voter backlash could dash the re-election hopes of Prime Minister John Howard, who had promised low interest rates at the last election.
Labor's assistant treasury spokesman, Chris Bowen, said the new figures show that cost-of-living expenses and mortgages are hurting families.
"These figures match what I'm hearing in my electorate: people are hurting, hurting badly," said the member for Prospect in NSW.
"It also appears that people who have early payments of superannuation approved are getting a larger percentage of their payouts early -- this goes against the grain of saving more for retirement.
"These figures are more evidence that all is not rosy in the Australian economy. Interest rate increases and petrol prices are all taking their toll."
Reserve Bank figures show households owe A$160 for every A$100 of disposable income today, while in the early 1990s, they owed about A$50 on average.
Also, families spent a record 12 per cent of their disposable income on interest payments -- up from just 6.9 per cent five years ago.
- AAP
