AIST puts 'easy super release' promises in their place

The Australian Institute of Superannuation Trustees (AIST) last week clarified the conditions of early super release, hitting back against mortgage lenders promoting products that promised easy access to super in the event of a loan default.

Responding to media reports that rogue mortgage lenders were advising families to eat into their superannuation to catch up on home repayments, AIST’s chief executive officer, Fiona Reynolds, said early-release super was subject to strict government guidelines designed to protect the retirement savings of all Australians. “While there are certain circumstances where super fund trustees are able to release super before preservation age, these circumstances are very limited,” Reynolds said. Members seeking early release of their super for mortgage assistance must apply to the Australian Prudential and Regulatory Authority (APRA) and be able to prove that mortgage assistance is necessary to prevent their lender from selling their home. If approval from APRA is granted, members must then apply to their fund trustee. Members cannot apply to assist dependants or relatives with their mortgages and typically the amount of super release is limited to mortgage arrears plus roughly two to three months’ mortgage repayments. Reynolds noted there had been past incidences of early-release super scams where unscrupulous promoters offered their services to people experiencing financial difficulties to easily arrange access to early-release super. “Members need only apply to APRA and their fund trustee. A third party is not necessary,” Reynolds said. A recent survey commissioned by AIST and conducted by research house IPSOS suggested about 5 per cent of working Australians had withdrawn super for hardship purposes.