While the idea of withdrawing up to $20,000 from your superannuation may sound tempting, it should be the very last resort. Rather than thinking about how a short-term injection of cash could help, instead visualise your retirement with $150,000 less available to you.

Under new rules put in place by the Federal Government, workers whose income is reduced by at least 20 percent due to the COVID-19 outbreak are allowed to take $10,000 out of their super between mid-April and June 30, and a further $10,000 in the three months after that date.

According to the Australian Institute of Superannuation Trustees, Indigenous Australians are already retiring with lower super balances than non-Indigenous Australians. The long-term impact of withdrawing funds now could be huge to your overall balance at retirement.

Indigenous Australians are retiring with lower super balances than their non-Indigenous counterparts. Photo via Australian Institute of Superannuation Trustees.

Superannuation works best when it compounds over a long period of time. By keeping $20,000 invested at seven percent per year over 30 years—it would be worth $150,000 by retirement.

What this means is that you could be taking $150,000 from your retirement super balance if you withdraw that $20,000 now because that’s what the money will be worth in the future.

If you are experiencing financial difficulty, it’s worth exploring other options to improve your financial situation before withdrawing from your super.

Read on to see which steps might be helpful for you.



Applying for the JobSeeker payment should be the first priority. While Centrelink offices are busy and the myGov website continues to experience high demand, it’s something that requires perseverance. At the moment there is no need to go into the office.

Trying online at quieter times—like late at night—may be a good option.


Talk to your employer

If you haven’t done so already, it’s also worth talking to your employer. Find out if they are going to place you on the JobKeeper payment of $1,500 per fortnight. Also talk about employment prospects for when businesses are allowed to trade as normal.

Ideally, it’s good to know if your employer will be putting all staff back on or if they have different plans.


Talk to your bank and other service providers

The next step is having a conversation with your bank if you have a mortgage or with your real estate agent if you rent. There are a lot of support packages in place that you may be able to access.

Some of these include reduced interest rates at banks or putting a hold on mortgage repayments for a set period.

Renters are also being encouraged to talk with their landlord to discuss the possibility of reduced rent if you are impacted by COVID-19. Laws have been relaxed around evicting tenants who cannot make rent repayment.

Additionally, this advice extends to your electricity or phone provider. Contacting them and discussing your options should be done sooner rather than later.


Create a budget

If you find that despite of all this you still need to access your super, put together a budget to find out exactly what you need.

If you need $8,000 to pay for rent for the next few months, then you should avoid accessing the full $20,000. For every dollar that you draw from your superannuation today, it could be costing you $7 in your retirement.

If you find that you are still struggling financially, we encourage you to take advantage of the services available to you at a time like this.

Having debt can add stress and leave you feeling overwhelmed or anxious. The National Debt Helpline provides free financial counselling and can be reached on 1800 007 007 or at ndh.org.au.


If you or anyone you know is struggling with mental ill-health, call or visit the online resources below:


By Phil Usher


Phil Usher is the CEO of First Nations Foundation, a national Indigenous not-for-profit with a vision of achieving financial prosperity for Indigenous Australians.