Should You Be Allowed to Raid Your Super Early?
Pauline Hanson wants to loosen Australia's superannuation rules so workers can dip into their retirement savings during a crisis. Her argument: it's your money, so you should be able to use it when you need it (The Guardian).
Superannuation is the compulsory retirement savings system. Your employer pays a percentage of your salary into a super fund, and you generally can't touch it until you reach retirement age. Hanson wants to change that so people struggling with mortgage repayments and cost-of-living pressures can draw on their super early. She has also flagged early access for anyone hit with a medical or disability diagnosis, and has called the whole system "broken" (SBS News; The Guardian). The idea is part of One Nation's $90 billion Budget Savings Plan, a policy document on the party's website aimed at cutting government waste (One Nation).
Labor is having none of it. Treasurer Jim Chalmers says there are already rules that let you access super early if you're in genuine hardship or facing a crisis (The Guardian). The government is vowing to protect the super system, which holds $4.4 trillion in retirement savings, from what it sees as a dangerous precedent (SBS News; The Australian).
Chalmers is right that there are already ways in. The tax office lists five compassionate grounds for early release: medical treatment or transport, disability accommodation, palliative care for a terminal illness, funeral expenses for a dependant, and preventing foreclosure or forced sale of your home. There's also a separate rule for severe financial hardship: if you've been on an income support payment for at least six straight months and can't pay any other way, you can withdraw up to $10,000 a year (The Guardian).
What's eye-opening is how many people are already using those existing pathways. In 2024-25, the tax office approved early super access for 63,300 people on compassionate grounds, mostly for medical treatment. They withdrew more than $1.4 billion between them, averaging about $22,400 each. That's a 40% jump on the previous year and nearly double the $762 million withdrawn in 2022-23 (The Guardian).
The broader context here is what those numbers tell us. Even under the current rules, which are fairly tight, more and more Australians are tapping their super early. The Treasurer says that proves the system already has enough flexibility. Hanson says it proves people are doing it tough and the rules are too rigid. Labor's counter-argument is that letting people drain their super now will leave them with nothing in retirement and push them onto the age pension instead.
One Nation isn't alone in wanting changes. Jane Hume, the deputy Liberal leader, confirmed the Coalition would look again at letting people use their super to buy a first home (The Guardian). That's a narrower idea than Hanson's, but it pushes in the same direction: more reasons to spend your retirement savings before you retire.
The experts aren't keen. Bob Breunig, who heads the ANU's tax and transfer policy institute, rejected the idea flat out. "We shouldn't allow early release," he said (The Guardian). Investment experts warn that pulling money out of super early can seriously shrink your final retirement balance. Think of it like a snowball rolling down a hill: the longer your money sits in the fund earning compound returns, the bigger it gets. Take a chunk out halfway down the hill and you lose not just that money but all the growth it would have earned. Their alternative, if the goal is to give workers more cash now, would be to reduce the percentage of salary employers must pay into super, rather than letting people empty their accounts (The Guardian).
There's a bit of a contradiction in Hanson's position, too. She supported the 0.5% increase to the super contribution rate that kicked in back in July 2021, because she thinks more money should go into super. But she also thinks people should be freer to pull it back out. That's where she parts ways with the broad consensus that super exists to keep people off the age pension in retirement (Facebook/One Nation).
In my view, the real question isn't whether Hanson's proposal will pass. It probably won't survive the Senate, let alone a Labor government that has made protecting super a core position. But between One Nation's push and the Coalition reopening the super-for-housing debate, the government is going to have to defend the status quo rather than rest on it. And when the tax office's own figures show compassionate withdrawals nearly doubling in two years and still climbing, the claim that the current rules are fine as they are is going to come under real pressure.
