The impact of COVID-19 and the ERS on superannuation savings in Australia

COVID-19 has had a significant economic impact on Australia, and consequently on the superannuation savings of many individuals. To examine COVID-19’s heterogeneous effects across different industries and demographic groups, the impact on superannuation was assessed for 12 representative cameos using a range of Australian data, including Household, Income and Labour Dynamics in Australia (HILDA), ATO, ABS and APRA sources. The marginal impacts of sudden job loss, investment losses, investment switching and participation in the Early Release of Superannuation (ERS) scheme were each investigated in turn. The cameos highlight that some demographic cohorts faced several compounding challenges. For example, many ERS applicants were already facing financial hardship, were more likely to be younger, and faced a higher risk of unemployment. This highlights that COVID-19 has impacted different cohorts in different ways, depending on age, employment status and industry, and family situation, among other factors.