The Australian Bureau of Statistics (ABS) has released the household financial resources report for September 2020, which provides a glimpse of household finances in the months following the introduction of the coronavirus pandemic-related restrictions last year.
The report has revealed that 29 per cent of those who were recipients of the COVID-19 early access superannuation scheme withdrawals used the funds to make mortgage or rent payments, while 27 per cent used the funds for household bills.
While another 15 per cent of the recipients used it to pay credit cards or personal debt, around 13 per cent – or one in eight people – added it to their savings.
The COVID-19 early release of superannuation scheme, which allowed up to $10,000 to be accessed before retirement to people facing financial hardship due to the pandemic, could be accessed twice (once before and after 30 June 2020), enabling up to $20,000 of superannuation to be withdrawn.
Meanwhile, of those households where someone reported receiving the JobKeeper payment through their employer or in their own business (19 per cent), half owned their dwelling with a mortgage, while 47 per cent of households with someone receiving the JobKeeper payment were couple families with dependent children.
Average weekly housing costs, which includes mortgage, rent and rates payments remained steady in the September 2020 quarter at $305 per week, while housing costs as a proportion of total household income also remained steady at 12.6 per cent.
An increase in mortgage payments (up $31 to $49 a week) and rate payments (up $6 to $34) drove an increase in total housing costs for those in the lowest private income quintile from $141 to $162, the ABS said.
In September 2020, 5 per cent of couple family households with dependant children could not pay mortgage or rent payments, up from 2 per cent the year prior.
These households also sought more financial assistance from friends or family than a year prior (up from 7 per cent to 11 per cent), and assistance from welfare or community organisations (up from 2 per cent to 5 per cent).
Figures also showed that 32 per cent of households experienced at least one indicator of financial stress.
However, the data also showed that for households in the lowest private income quintile in September 2020, fewer reported at least one indicator of financial stress when compared with the previous September (50 per cent to 43 per cent), while fewer reported not being able to pay gas, electricity, telephone or internet bills (16 per cent to 10 per cent), and facing difficulty paying bills more than five times in the last 12 months (8 per cent to 5 per cent).
The percentage of households in the lowest private income quintile that reported saving regularly increased from 23 per cent to 30 per cent in the September 2020 quarter, while 51 per cent of those in the highest income quintile followed a budget, up from 42 per cent the previous year.
ABS director of household economic resource surveys, Dean Adams, said: “We found that for people who accessed the scheme twice, the average total amount withdrawn was $17,441. The average single withdrawal was $7,728 for the first opportunity, and $7,536 for the second.”
Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume also commented on the ABS figures, stating: “These results are in line with the Retirement Income Review finding that offering prudent and limited access to superannuation prior to retirement is consistent with the objective of balancing living standards pre- and post-retirement.”
“The scheme was a flexible option and more than 3 million Australians weighed up the decision, and decided that withdrawing their super was the best financial decision for them.
“The best way for the government to help workers rebuild their retirement savings is to do everything we can to help them get back into a job soon. And that’s exactly what we’re focused on.”
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.