Dipped into your super during Covid? Here’s how to get back on track.

If you took advantage of the ‘early release’ of superannuation during the coronavirus pandemic, you really need to consider how you’re going to make up any potential shortfall you could face in retirement.

If you’re not turning 60 this year, then I’m talking to you.

By Julie Nipperess

Virus and illness protection, hand sanitizer in public crowded place

So, the statistics are in. According to reports in the past couple of weeks, more than a million people in New South Wales have accessed the Government’s early release super scheme during Covid which permitted the withdrawal of $20,000 in total over last financial year, and this financial year.

Of those, a quarter…. (about 250,000) of New South Wales workers have all but
‘completely wiped’ their retirement savings by doing so.

Uh oh.

This was a great initiative by the Federal Government, with good intentions. At the height of the pandemic, the Government’s well-meaning imperative was to provide a range of options for Australians doing it tough, to help them keep the roof over their head and food on the table.

Businessman holding a phone and bills

Penalties for those who didn’t meet the criteria


But as the scheme was set in motion, it became clear that many people were accessing their super just because they could.

Hindsight is a marvellous thing. At the time, the government did make it easier for people to access financial planning advice before making decisions about super. But many people didn’t, to their detriment.

It’s also been suggested that perhaps the scheme was ‘too easy to access’. Last year, the ATO said that it will be making attempts to recover funds from anyone who accessed their super without meeting the criteria of ‘severe financial duress’ and there will be penalties.

Young couple looking stressed while going over their finances at home

Making up the shortfall


But people who genuinely needed the money, also now need to seriously consider how they’re going to make up the shortfall.

Let me put it this way, if you’re aged 30, and took out the full $20,000, you could be $80,000 worse in retirement.

Now, when you’re aged 30, that probably doesn’t sound like a big deal. And the good news for anyone in this age-group is that you do have time to put in place additional financial commitments over the long-term to get your super looking healthy again.

Unfortunately, the same is not necessarily true for someone aged 50, so a different approach is required. And of course, it depends on what you earn and whether you’re a part-time or full time worker, a business owner, or a sole-trader, married or single. It also depends on whether you’re a female or a male.

What’s the best thing to do?

Get professional financial advice. ASAP.

There are numerous financial strategies that can help you to maximise what you’ve got, even if you are nearing retirement.

Middle aged couple having breakfast in kitchen together

Don’t take chances with your superannuation


Pandemics, wars and other national crises can have a strange effect on our minds and emotions. Sometimes, when everything seems chaotic, people can decide to throw caution to the wind and think ‘well, I’m just going to live for today.’

It’s understandable, but when it comes to superannuation, this way of thinking is a very big mistake.

The simple fact of the matter is that it’s highly unlikely that you’ll have any other form of financial support in your post-working years, so you do need to think about what that will mean. Living costs are increasing across the board, and when your income stops, how are you going to pay the bills? Will your superannuation be enough to fund you for another couple of decades, particularly if your health is declining with age and medical expenses need to be paid?

Unless you have a dependable rich benefactor, a Genie-in-a-bottle or a crystal ball for the winning lotto numbers, your superannuation is where you should focus your attention.

A financial planner can not only help you boost your superannuation, but help you understand how you can make your current assets work for you now, and into retirement too, if need be. And if you don’t have assets, or other investments like a managed fund or property, then a financial planner can help you put plans in place to meet those goals too, if that’s what you’re interested in.

Don’t take chances with your super – you work hard enough and you deserve a stress-free retirement. Contact us, and let us help you make the most of it.

This is general advice and should not be treated as personal advice. Julie Nipperess is an authorised representative of Step Up Financial Group Pty Ltd ASFL No: 512509.

Need more information? Get in touch with Step Up Financial


    • 107 Moulder Street,
      Orange, NSW 2800

      PO Box 2499
      Orange, NSW 2800

    • (02) 6362 5445