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ERS surges $7bn in a week

Early Release of Super payments surged around $7 billion in the first week of July, according to Treasury estimates, but this may not be a reason to panic.

Treasury estimates a further $7 billion was wiped from super funds as the second tranche of applications were lodged at the start of the new financial year.

However, Rainmaker Information data shows this spike is close to the initial spike seen when applications opened back on April 20.

Rainmaker Information executive director of research and compliance, Alex Dunnin, said while the figures are startling, there is a nine-day lag between applications and payments and Treasury has had access to the advance numbers.

"The larger point is that most people applying for this round of ERS are likely to be older because the younger folks who dominated the first round have probably cleaned out their accounts," Dunnin said.

"For example, those who took out $6000 because that is all they had available certainly don't have another $10,000 waiting for them."

Dunnin said it is likely the total ERS payments in the second tranche will peter out after this initial surge.

"It is not surprising that the top 10 funds making the payments are also the biggest 10 funds that have a younger demographic," Dunnin said.

"Also unsurprising is that these funds are also those associated with impacted industries like tourism, retail and hospitality."

Dunnin said given the trend expectations of funds with younger members, and therefore smaller balances, it's reasonable to expect funds impacted in the second round of ERS will be those with older memberships.

Read our full COVID-19 news coverage and analysis here.

Read more: ERSTreasuryEarly Release of SuperRainmaker InformationAlex DunninCOVID-19
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