Flat White

Another supercilious superannuation superimposition

24 August 2020

7:25 PM

24 August 2020

7:25 PM

Here’s a little nugget that the superannuation ticket clippers won’t tell you. Early Covid related superannuation withdrawals come with a government tax bonus, and for many people, early withdrawal is an entirely rational exercise.

This is how it works. Going in, superannuation contributions are generally tax free. But early withdrawals, for example on compassionate grounds, are normally taxed. The tax payable depends on the age of superannuant and the composition of their funds, but tax would be payable. However, Covid superannuation withdrawals are tax free.


Depending on the assumptions on future investment returns, once fees and inflation is factored in, it is entirely possible that for many superannuants, they are better off financially withdrawing their contributions early than leaving them in the hands of the ticket clippers. This would leave the only people worse off being the members of the superannuation industrial complex.

Perhaps this is why the only people who are complaining are those with fewer funds to clip and not the people who actually own the funds.

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