Accessing superannuation early and increased debt due to the COVID-19 pandemic will have lifelong consequences, according to a report from social justice organisation Brotherhood of St Laurence (BSL).
The ‘Shocks and Safety Nets’ report found that financial wellbeing decreased throughout the community as a result of unemployment, reduced work hours and income cuts.
However, the report found those living on the lowest incomes had come out of the peak of the pandemic even more financially vulnerable than before.
Many people aged over 45, disability pension recipients, women on low incomes and single parents reported being left with dwindling financial buffers after accessing savings, superannuation and increasing debt during the pandemic.
Lead author and ANZ Tony Nicholson Fellow at BSL, Dr Emily Porter, said opportunities to recoup these losses were limited with the Budget predicting continued low wage growth and continued shift to part time work.
“The impacts of the crisis were uneven. This is just one of the many crises that we’ll face and the most disadvantaged will be hard hit. Put simply, those with less are not likely to bounce back,” Porter said.
“Our study really highlights the importance of decent work that allows people to build savings in the event of future crises and having a fair and adequate social security system in place. We need both to support people through uncertain times.”
The report showed that temporary policies did moderate the impacts of the crisis but were short-term.
Those who had access to the increased income support payments reported an improved ability to meet financial commitments for the COVID-19 period.
However, many during this time still had to draw on their savings or access their superannuation leaving them now in a more precarious situation.
“Addressing these challenges requires investment in secure, well paid work and an adequate social safety net that allows people to build savings and live with dignity,” Porter said.