Allowing first-homebuyers to draw on their superannuation for a deposit could end up costing the Federal Government $92,000 per person in additional future pension costs, a new report warns.
Consulting firm Rice Warner says that letting a 35-year-old take $100,000 out of their super could result in them needing an extra $92,000 in pension payments later in life because of their foregone superannuation earnings.
“The superannuation industry has tirelessly pointed out to various governments that the mandatory employer contribution is not sufficient to provide all Australians with a comfortable retirement,” Rice Warner said in its report on Friday.
“It is nonsensical to dilute retirement benefits further by allowing benefits to be used for other purposes.”
The idea of allowing first-homebuyers to dip into their super resurfaced this week following media speculation the Government may include it in its upcoming Budget.
Assistant Treasurer Michael Sukkar, in a television interview, said he largely agreed with previous comments by Finance Minister Mathias Cormann that the move would drive up house prices.
But Mr Sukkar said that would only be the case if the idea was implemented in isolation.
He subsequently signalled no moves on superannuation-funded deposits would be included in the May Budget.
Rice Warner pointed out that just under a quarter of Australians who had reached retirement age were not drawing some government benefit, and that some of those people were still working.
Over the next 30 years, higher levels of super benefits alongside a small rise in the pension eligibility age would result in fewer people receiving a full pension.
“This shows that people will need to put more of their own money into super to become self-sufficient and they certainly cannot afford to take any out before retirement,” it said.
The Rice Warner modelling assumed that the homebuyer only received employer super contributions and did not make additional top-up contributions to their fund later in life.