With slow wage and job growth, Australians are falling behind financially.
And the amount of Australians withdrawing superannuation early on compassionate grounds has risen 590% in the last six years.
New data from the Federal treasury shows that it rose from $42 million in 2016/17 to $290 million last year.
It paints a frightening picture of the cost and quality of living in Australia.
Compassionate grounds covers mortgage assistance, health needs, palliative care, funeral expenses, or home modifications to accommodate illness or injury.
According to ABC News, three quarters of the claims were made to cover health costs.
Experts have expressed concerns that financial services are allowing funds to be claimed for elective procedures such as IVF.
But the chief executive of The Consumers Health Forum, Leanne Wells, told the ABC that:
‘[It] raises questions about whether we’ve got an emerging two-tier system, where we’ve got people who can afford and people who can’t afford, and those that can’t in the immediate term are looking to other alternatives.’
The Finance Minister has ordered a review into the early release of superannuation, but this could miss the mark if the cost of living is the bigger issue.
According to Nine News, Chief ANZ Economist Shane Oliver said:
‘The combination of very weak wages growth, high levels of underemployment and rises in the cost of certain items like electricity and health and so on have led to a situation where many households, in fact the average household in Australia is worse off than it was five years or so ago.’
And Australians are feeling that pressure.
According to an Australian Financial Review report in July, South Australians pay the highest energy bills in the world. New South Wales, Queensland and Victoria also made the top 10.
Australia has dropped from fourth place in 2016 to ninth place a year later on the worldwide Social Progress Index. One of our worst scoring points was quality of electricity supply.
With Aussies struggling to pay the bills and maintain their health, the standard of living is dropping.
And if people are withdrawing their superannuation, it could cause further problems down the road with more seniors relying on the pension.
The Australian government may need to do more than a review of early releases of superannuation to fix this issue.