He told the Senate COVID-19 committee that although some people had been prevented from taking their money because they may have already done so or been a temporary visa holder,no one had been stopped from withdrawing funds on broader questions such as whether they had lost their job.

"We will never have enough information to reject quickly. We give money to people on their say so. We work on the assumption that Australians are honest,"he said.

Tasmanian senator Jacqui Lambie said there were major issues with the entire scheme,adding"what a cluster this is".

Labor's superannuation spokesman Stephen Jones said the scheme was on track to blow out by more than $12 billion with 560,000 people already clearing out their entire superannuation savings.

Analysis by credit bureau illion and consultancy AlphaBeta earlier this month revealedpeople using the scheme spent nearly $3000 more than normal in the fortnight after getting the lump sum with two-thirds of the additional purchases on non-essentials including gambling,alcohol and furniture.

But banks are seeing the cash being used by home owners to pay down their mortgages.

One senior banker who was not authorised to speak publicly said the lender had seen a 10 per cent increase in the number of customers who are up to $25,000 ahead on their mortgages.

The banker said early super access was one factor contributing to the trend,alongside people selling investment properties,and households reducing their expenses.

"We are seeing increases in our early pre-payments,"the banker said.

A source from another bank also confirmed customers were using funds withdrawn from super as a buffer in case they struck financial difficulties.

Managing director of consultancy Digital Finance Analytics,Martin North,said a survey he conducted showed just under one in three people who had accessed their superannuation early were putting the money onto their mortgage,or an offset account attached to a loan.

"I do think some of them are putting it into offset accounts,on the principle that they might tap into it later,"he said.

Mortgage Choice chief executive Susan Mitchell said she had not seen evidence of people using super to pay off home loans,but some of the company's brokers had reported customers attempting to use money withdrawn from super as a deposit for a house.

"That being said,most lenders will not accept early withdrawal of super as genuine savings towards the purchase of property,"she said.