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Government told to keep hands off emergency s -

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ELEANOR HALL: Welfare groups and lawyers are calling on the Federal Government to review its
superannuation policy for disadvantaged Australians. The policy allows people in straightened
circumstances to gain access to a portion of their superannuation.

But there is a catch.

As George Roberts reports when people use the lifeline, the Federal Government takes more than 20
percent of the emergency drawdown in fees and taxes.

GEORGE ROBERTS: Linda Hayes had a successful career in IT. When she decided to go back to
university to study honours in forensic psychology, she didn't expect what happened next.

LINDA HAYES: I got retrenched from a job so I was stuck and also I broke up with a relationship and
it is very hard when you are by yourself to pay all your bills, like it is hard even on a good day
- like even if you had a job. To have that income removed then you are on your own and when you
have been tossed out of a job and yeah, you have got no control over a situation, you are stuck and
it is not a quick process to get a new job.

GEORGE ROBERTS: Things went from bad to worse. The debts piled up and she began abusing alcohol.
With no job, no money and facing the prospect of losing her house Linda Hayes applied to use
$10,000 of her superannuation as a last resort to avoid being left homeless.

That's when she found out the Government takes more than 20 per cent in tax, as a penalty for using
super early.

LINDA HAYES: What we had to go through to even access it was enormous and has taken a lot of time
and then at the last minute to have that money taken off you, it was devastating.

GEORGE ROBERTS: It's an scenario that's seen daily at the Macarthur Community Legal Centre in
Sydney's south-west.

The centre provides free legal and social support to some of Australia's most disadvantaged urban

The head of the centre, lawyer Prue Gregory, says they see about five clients a day who are in
severe financial difficulties. Of those, about 30 people a month are in so much financial pain that
early access to super is the only option.

PRUE GREGORY: We are down to using every dollar that is available and for us to lose any of that
superannuation impacts seriously on that family. We are dealing with families who are choosing not
to eat on certain days because the money has run out or rely on emergency relief and you can only
access that every six weeks.

So it is really dire and to have money taken out of the superannuation for tax, does impact
directly on that family.

GEORGE ROBERTS: She says taking more $2,000 from people who are in severe hardship is like a tax on
the poor.

PRUE GREGORY: It is not just that they can't pay their bills. It is the relationships that start
breaking down, the kids who don't go to school. The ripple effect of this is huge and we, as a
society, are suffering.

GEORGE ROBERTS: Prue Gregory says thousands of people across the country would be affected but it
is not easy to qualify. One of the criteria is being on income support for 26 weeks continuously.
Even a short break from welfare like a failed attempt to get a job or being placed in custody for
rehab can render people ineligible.

The director of the Welfare Rights Centre, Maree O'Halloran, says as it's already very difficult to
get hold of emergency super, taxing it is unfair.

MAREE O'HALLORAN: If you have been through all the hoops and you have finally got access to this
small amount of your superannuation, it is very hard on top of that to have that tax when clearly
in order to get that small amount of money from your superannuation you have to be in severe
financial hardship.

GEORGE ROBERTS: The Minister for Superannuation and Human Services, Chris Bowen was unavailable for
interview but in a statement he says the Government considers the arrangements strike the right
balance between encouraging people to save through super and to be able to access it early in
certain circumstances.

Linda Hayes has a different view.

LINDA HAYES: To have someone take money off you when you are at your worst. It was a nightmare. I
think it is disgusting and especially when you are in a vulnerable situation. You can't cope with
stuff like that. Like it is um, yeah, it will send you off the deep end and virtually if I hadn't
had family around me, I would be on the street and that is what it is promoting.

ELEANOR HALL: That is Linda Hayes ending that report from George Roberts.