By
Accessing superannuation and savings and increasing debt to counter the financial impacts of the COVID-19 pandemic could potentially have "lifelong consequences" among Australians, particularly the low-income earners, according to the latest report from Brotherhood of St. Laurence.
The report showed that low-income households who were able to weather the peak of the pandemic came out more financially vulnerable than before. In fact, many Australians aged over 45, disability pension recipients, women on low incomes, and single parents claimed that they were left with "dwindling financial buffers" after accessing savings and superannuation and increasing debt during the pandemic.
Emily Porter, lead author of the study, said there are limited opportunities to recoup the losses the affected population groups have incurred, given the prediction of continues low wage growth in Australia.
“The impacts of the crisis were uneven. This is just one of the many crises that we will face and the most disadvantaged will be hard hit. Put simply, those with less are not likely to bounce back,” she said.
The report also found that temporary policies such as the Coronavirus Supplement was only able to ease the impacts of the COVID-19 pandemic in the shorter-term
"Those who had access to the increased income support payments reported an improved ability to meet financial commitments for the COVID period. Yet many during this time still had to draw on their savings or access their superannuation leaving them now in a more precarious situation," she said.
Porter believes that policies should focus on providing well-paid work and an adequate social safety net that would enable Australians to build savings and be able to live their everyday lives comfortably.
"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," she said.
A recent study by the CBA showed a different picture, with the financial wellbeing of Australians hitting an all-time high and defying the expected slump due to the COVID-19.
"While clearly there are people struggling or worse off from the pandemic, more Australians feel better off, more financially secure and more in control of their finances," said Ben Grauer, executive manager for financial wellbeing at Commonwealth Bank.
