Indigenous Australians have been warned against withdrawing their superannuation early to ease the financial burden of the coronavirus pandemic.
The Federal Government passed emergency legislation in March to allow people who have lost work due to COVID-19 or are entitled welfare payments to access up to $20,000 from their retirement savings over two years.
Since the scheme officially opened on Monday, almost half a million Australians have been approved to withdraw cash to a total of $3.8 billion, Treasurer Josh Frydenberg said on Thursday.
But there are fears that some of Australia's most vulnerable people might be accessing the scheme without thinking through the long term implications.
Chairman of Indigenous not-for-profit the First Nations Foundation, Ian Hamm, told SBS News Aboriginal and Torres Strait Islander people should not consider accessing the scheme unless "there is no other option".
Treasurer Josh Frydenberg said almost half a million Australians had accessed the scheme in its first week. Source: AAP
"The reason for that is the overall low level of Indigenous superannuation savings," he said.
"While it might give them access to $10-20,000 now, the flow-on effect will be that in years to come that could potentially be up to $150,000 out of their retirement."
Kirstin Hunter from Future Super said the scheme was putting the burden on individuals to "fund their way through a public health crisis".
"It's leading those individuals into a position where collectively they're going to be millions of dollars worse-off in retirement," she said.
First Nations Foundation works to help Aboriginal and Torres Strait Islander people make more informed financial decisions and often travels to remote communities to run workshops on the superannuation system.
Since the introduction of COVID-19 travel restrictions, Mr Hamm said the organisation was planning to launch a superannuation education website in the coming weeks.
"We've helped 1,636 people locate over $24 million in Superannuation that they didn't know existed in their name," he said.
The application for early access is made through the Australian Tax Office (ATO), before being set to individual super funds with payments made available within five working days.
until the 30 June.
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