Super Boost or Retirement Risk? One Nation's Rent & Mortgage Plan

A new proposal from One Nation could see eligible Australians able to dip into their superannuation funds to help cover rent or mortgage repayments. The plan has sparked debate about whether it’s a lifeline for struggling households or a risky gamble on future retirements.

Under the proposed policy, employers would continue paying the standard 12% compulsory super contribution. However, individuals opting in could receive up to 3% of that amount back as an upfront payment over a three-year period. This money would be taxed at a concessional rate of 15%, significantly lower than personal income tax rates.

According to One Nation’s estimates, a full-time worker earning approximately $90,500 could receive an extra $2,300 annually. Higher earners would see even greater benefits; a couple on a combined salary of around $160,000 might receive roughly $4,500 per year.

While the policy aims to ease financial pressure for Australians facing rising costs and interest rates, finance expert Scott Phillips warns that tapping into superannuation, even in smaller amounts, can have long-term consequences. He acknowledges the immediate appeal of the extra cash but cautions that depleting super balances, even by a relatively small sum over three years, could impact retirement savings.

The policy’s eligibility criteria remain somewhat unclear, with initial suggestions including both renters and mortgage holders. However, further comments have indicated the scope might be broader, potentially allowing more Australians to access the scheme. This lack of clarity raises concerns about potential misuse, similar to what was observed during COVID-19 when superannuation hardship provisions were available—with some funds being used for non-essential purchases.

Perhaps the biggest economic concern is the potential inflationary impact. Injecting additional disposable income into the economy could increase demand and drive up prices, particularly in sectors like housing.