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Australians raid superannuation to avoid home loss – it is as bad as it gets

April 9, 2011 by Editor · 1 Comment 

Thousands of homeowners are dipping into their superannuation in a desperate attempt to avoid losing their homes.

As welfare groups – and Labor MPs – warn of a growing underclass, the Herald Sun can reveal more than 5000 people have applied for access to their retirement nest eggs since last July.

About $75 million is expected to be released to homeowners as a last resort to meet overdue mortgage payments and avoid foreclosure.

The battle to keep the family home reflects worries that more people are falling into poverty as housing affordability drops and weekly living costs rise.

The Australian Council of Social Service reported a 30 per cent hike in people seeking access to emergency payments over Christmas.

Labor MPs are also reporting an increase in people asking for hand-outs from welfare centres.

“It’s as bad as they have seen it,” one Government MP said.

The Australian Prudential Regulation Authority said 5008 people applied for early access to superannuation in the eight months from July to February.

Almost $50 million had been released by the regulator, meaning the full year result is on track to see $75 million handed over to stricken home buyers.

In 2009-10, $64 million was paid out by APRA, at a time when households were getting over the global financial meltdown.

Almost 1500 people applied in January and February, with the regulator approving the release of $12.6 million.

Another 2582 people accessed superannuation to pay for emergency medical treatment since July, with APRA approving the release of $13.4 million.

Australian Financial Counselling and Credit Reform Association executive director Fiona Guthrie said the nation was dealing with a “debt hangover” over lax credit controls.

“We are definitely seeing more people who are struggling with mortgage stress,” Ms Guthrie said.

Under federal laws, homeowners can apply to APRA for access to super funds provided they can prove a lender is about to foreclose on the family home.

Source:   News.com.au

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Comments

One Response to “Australians raid superannuation to avoid home loss – it is as bad as it gets”
  1. stewart says:

    The great property ponzi wealth-transfer scheme continues….

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