Desperate property owners on the brink of losing their homes are raiding their superannuation in record numbers, accessing more than $100 million in emergency funds in the past 12 months to keep the banks at bay.
More than 6500 home owners received emergency access to their superannuation last financial year, leading to warnings from welfare and housing groups that a growing number of people face financial stress in old age. Figures show the average payment was more than $15,000, which in some cases is as high as a third of the total retirement savings balance. It marks the third consecutive year that the number of people gaining access to their nest egg has increased.
The claims for 2011-12 totalled $99.38 million, a 25 per cent increase on the previous year and well above the value of payments made in the aftermath of the global financial crisis. Also, the average individual payment has more than doubled in the past decade. To access super for mortgage stress, home owners must meet a series of tough eligibility criteria, including receiving a notice of foreclosure from their bank and being at least three months in arrears on their loan repayments.
The number of households in serious financial stress has worsened despite mortgage lending rates falling 1 percentage point in the past six months and nearly 3 percentage points since their last peak in mid-2008.
Years of strong house price growth had seen debt levels and mortgage payments balloon to unsustainable proportions, according to Sarah Toohey, campaign manager for Australians for Affordable Housing. ''It's alarming and it shows that housing affordability is about more than just interest rates. The sheer size of what people have to borrow to get into the housing market now really puts household finances under strain.''
The superannuation industry is also worried by the trend and has called for tighter caps on the amounts people can access or for even tougher eligibility criteria.
Association of Superannuation Fund of Australia chief executive Pauline Vamos said: ''Your super is not there to pay debt, it's there for retirement. We are concerned that it is being abused. That people deliberately stop paying their repayments and ask the bank for a notice of foreclosure so they can access their super. As people's account balances get higher this is going to happen.''