Should Aussies be able to access their super sooner?

Backbench MPs in NSW have proposed an opt-out superannuation plan, in which those who earn less than $50,000 per year would have the option to access their super contributions as wages.

It sounds good in theory: more money in your pocket each pay week to help manage the mortgage, pay the electricity bill, meet the ever-growing costs of running a household.

But in my view, it could potentially do a whole lot more harm than good.


I don’t fully understand the positive arguments behind giving people to option to essentially get rid of compulsory super under the opt-out proposal, which is being considered as part of the federal government’s Retirement Income Review.

Yes, it would be helpful to have some extra cash each week. But at the expense of your retirement fund?

That doesn’t make sense to me.

There seems to be many, many flaws behind this idea – including but not limited to:

  1.  The impact on those earning just over $50k. Why set a wage limit of $50,000? Would this mean a person earning $50k will take home more money per week than a person earning $52,000?
  2.  The impact on pay rises. If this policy went ahead, and you were earning $50,000, what would happen if you got offered a pay rise to $53,000? Would you actually receive less money in the hand each week after your pay rise?
  3. The impact on retirement. Superannuation only works because of compounding. Putting away small amounts of money early in your career allows it to compound into larger amounts when you’re older. Getting rid of these opportunities to sock money away now means lower-income earners will have far less wealth when they exit the workforce – right when they need it most.

Overall this seems like it would achieve next to nothing positive for those who need it most.

An extra $60-80 per week (after tax) would be helpful, but it’s not going to change your life.

Losing out on the potential to retire with $150,000 in super is going to change your life.

Personally, I think it would be more effective to design policies to let you use your superannuation funds to buy your own home. What do you think: is this a policy you would like to see pushed through, or can you see big issues with giving people access to their superannuation sooner?