Ask Paul: My son lost $34k on a trip, can I dip into my super for him?

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Dear Paul,

My son and his girlfriend lost $34,000 as a result of the STA Travel collapse, with no hope of getting any of it back.

I would really like to dip into my super for $10,000 (I am 52 and fortunately have still kept my job through COVID-19) to help my son out with his half of the lost money. Is it at all possible to access any super to do this if I'm currently working? - Vanessa

ask paul clitheroe can i dip into my super to help out my son

That is terrible news, Vanessa. $34,000 is a stack of money for any of us, but for youngsters like your son and girlfriend it is a mountain of money. About the only positive thing I can say is that they are young and have decades to recover.

I am very pleased that you have kept your job and it is really lovely of you to want to help your son.

But the $10,000 access to super means you need to be unemployed, receiving JobKeeper, have been redundant or your working hours have reduced by 20% or more, among other criteria.

I think your best chance here is a drop in working hours by more than 20%, but if this is not the case, then I am sorry to say that you may not qualify for the special COVID-19 rules providing limited access to super.

If you don't have any other savings, would it work for you to put aside what you can each month and help your son with a cash gift?

Again turning to a positive note, don't forget that the $10,000 you do not take out of super will historically turn into around $20,000 when you are 62 and $40,000 when you are 72 - the power of compound returns!

Please pass on my best wishes to your son and girlfriend. They must be devastated and while words are cheap the truth is they will recover from this awful collapse.

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Paul Clitheroe AM is founder and editorial adviser of Money magazine. He is one of Australia's leading financial voices, responsible for bringing financial insight to Australians through personal finance books, the Money TV show, and this publication, which he established in 1999. Paul is the chair of the Australian Government Financial Literacy Board and is chairman of InvestSMART Financial Services. He is the chair of Financial Literacy at Macquarie University where he is also a Professor with the School of Business and Economics. Click here to email Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section. Please view our disclaimer here.