coronavirus

We take a look at what the coronavirus means for your super.

We understand news of the coronavirus pandemic and resulting share market falls could be concerning for you. Stock markets in both Australia and around the world continue to react to the changing situation, and many of our members have been asking us what this might mean for their super.

 

 

Early release of super for people financially impacted by coronavirus

From Monday 20 April, you can apply through myGov for early release of up to $10,000 of your super by 30 June 2020 and $10,000 between 1 July 2020 and 24 September 2020. 

 

 

Reduced minimum drawdown rates for income stream members

For the 2019/20 and 2020/21 financial years, minimum drawdown amounts have been reduced by 50% in response to the coronavirus pandemic. See the new amounts here.

 

 

Interactive online webinars

The Government has introduced changes to super rules that may help with the financial impact of coronavirus. Join our short, sharp webinars, hosted by HESTA, to hear how they might affect you.

 

A word from our CIO, Sonya Sawtell-Rickson

From Monday 20 April until 30 June 2020, you can apply through myGov for early release of up to $10,000 from your super for the 2019/20 financial year and from 1 July 2020 until 24 September another $10,000 for the 2020/2021 financial year. 

 

Applications will be assessed by the ATO for eligibility in line with the criteria set by the government - you need to apply through myGov.

 

We recommend you seek advice before you make a decision.

 

Processing your payment safely

We understand this is a very difficult time for everyone in our community.  Please know that our staff are doing their best to support you. We expect everyone, including our staff, to be treated with courtesy and respect, and will terminate any abusive calls to our contact centre. By working together, we can support each other through this time.

You may have seen recent media coverage of the Australian Taxation Office (ATO) detecting a small amount of alleged fraudulent activity related to early access to super. The ATO says this activity was stopped and those affected contacted. 

Most applications are being paid within five business days. Where this may have taken longer, it’s been to ensure we have checked data and conducted further verification to safeguard members’ super.

 

Am I eligible?

The Australian Taxation Office (ATO) will decide who is eligible, not HESTA.

If your application is approved, the ATO will let us know.

To be eligible to apply for early release on compassionate grounds under the temporary changes, you must meet any one or more of the following requirements:

  • be unemployed; or
  • be eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
  • on or after 1 January 2020, you were made redundant; or had your working hours reduced by 20 per cent or more; or
  • you're a sole trader and your business was suspended or there was a reduction in your turnover of 20 per cent or more.

 

Can temporary residents apply?

Yes, if you're a temporary resident you're eligible to apply for uo to a $10,000 release for the financial year 2019/20 only, if you:

  • have held a student visa for 12 months or more and unable to meet immediate living expenses.
  • for 457 or 482 visa holders, have, on or after 1 January 2020, had your working hours reduced to zero but are still employed by your employer
  • hold another temporary visa, if you are unable to meet immediate living expenses.
 
How do I apply?
  • You need to go to myGov to apply for early release of super.
  • The ATO will process your application.
  • if you withdraw all your super, your account will close and you'll lose any insurance cover you have with us.

If you're calling us at this time, our wait times are higher than normal (over 1.5 hours).

 

How long will it take for me to receive the payment?

  • Once the ATO approves payments they will let us know by the next business day.
  • Allow for 5-7 business days for processing and another 2-3 business days to receive the payment, depending on your bank.
  • Check we have your correct details via your online account (you can also update your name using the  Change of member details form).

How long will it take to receive my super payment?
 

This information is current as at 20/4/20. While every attempt has been made to ensure the accuracy and reliability of the information, it is not guaranteed in any way.

 

Why does it take 5-7 business days to process the payment?

As ID is not needed for these payments, we need to run fraud prevention checks. These make sure super is paid safely to our members, not to anyone else.

 

How will I know if the payment has been approved?

  • We'll send you an SMS when we receive notice from the ATO and give you 24 hours to alert us if you didn't request the payment.
  • Please make sure we have your mobile number.  Check and update it in your online account  

 

What else do I need to know?

  • Remember, if you withdraw all your super, your account will close and you'll lose any insurance cover you have with us. 
  • Check your super balance in your online account before you apply. 

 

Find out more about how the changes work here.

 

Prefer to hear about this directly from the HESTA team?

Register for our early release webinar now.

 

Register now

“Our investment team and our managers are experienced at managing investments through major market events like this, and I understand it can feel hard to hold your ground and look beyond the headlines,” says HESTA Chief Investment Officer Sonya Sawtell-Rickson.

 

“For members that don’t plan to retire in the next two years, it’s important to remember super is a long-term investment.

 

“While markets can fluctuate over the short term, it’s the returns generated over the long-term that really matter. Even after periods of extreme market volatility, like the Global Financial Crisis (GFC), long-term investment returns recovered well.

 

“Reacting to short-term market movements can negatively impact the long-term performance of your super. It risks locking in a temporary fall in the value of your investments and missing an eventual rebound.”

 

Before switching your investment options, it’s important to consider your investment timeframe and the potential impact of switching investments based on short term market movements.  Switching investment options during a short term market downturn can have a significant effect on your super balance over the long term. It may mean locking in losses and missing out on potential higher returns by being out of the market when it recovers.

 

This chart shows the difference between staying in Core Pool and switching to other investment options during the Global Financial Crisis in 2009.   

These figures are for illustration purposes only and do not take into account fees, insurance or contributions. Calculations are based on historical monthly returns from 29 February 2008 to 29 February 2020, switching on 31 March 2009 with a super account balance of $50,000. Cumulative returns are calculated from 31 March 2009 to 29 February 2020. Past performance is not a reliable indicator of future performance.

 

Prefer to hear about this directly from the HESTA team?

Register for our market volatility webinar now

 

Register now

New temporary drawdown rates

For the 2019/20 and 2020/21 financial years, minimum pension drawdown amounts have been reduced by 50% in response to the coronavirus pandemic. See the new amounts here.

This measure will benefit retirees by giving them with more flexibility with how they manage their money.

You can change the frequency, drawdown and amount of your income stream payments in your online account or by completing the Income stream change of income payment amount and frequency form.

 

Considering changes? Advice can help

“If you have an investment timeframe of two years or less, you might want to seek advice if you plan to change how your super is invested or your investment choice,” says Josh Parisotto, Chief Advice Officer at HESTA.  

“For our members in an income stream option, the default strategy is a combination of balanced and defensive investment assets and has been designed to be lower risk than our Core Pool option,” says Josh.

“We provide advice about super for HESTA members, at no extra cost. However, due to the large volume of calls currently coming into our contact centre and requests to talk with an adviser, there may be a delay in our response. Please be assured we’re working hard to respond to everyone who has reached out.”

 

Prefer to hear about the  income stream drawdown rate changes directly from the HESTA team?

Register for our webinar now

 

Register now

Your insurance through HESTA covers you for pandemics including the coronavirus.  So, if you currently have death, TPD or income protection within your HESTA super account, we’ve got you covered.

Remember, if you apply for early release of super and withdraw your whole balance, your account will close and you'll lose any insurance cover you have with us. Check your cover now in your online account.

We’ve been here before: market impact

“Our investment team and external investment managers are highly experienced at managing investments through a range of market conditions,” says HESTA Chief Investment Officer Sonya Sawtell-Rickson.

“While it’s still too early to know the full impact of the coronavirus, our team is carefully monitoring the situation and is well prepared to both manage risk and invest in opportunities arising from changing market conditions.”

 

 

 

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