However, a recent landmark study undertaken by researchers at the Australian National University (ANU) found that, on average, those who withdrew their super were unemployed for longer and paid less.

The scheme allowed people to access up to $20,000 of their superannuation via two instalments — and the ANU study compared data like incomes, welfare payments and superannuation balances over the course of several years as well as before the pandemic.

As reported by the ABC, ANU Professor Robert Breunig largely focused on the data of those who lost their job in the first four months of the pandemic.

“We found that people who withdrew from their superannuation stayed out of work about eight weeks longer than the people who chose not to withdraw,” Professor Breunig told the ABC.

“In some ways, this is not that surprising because we know that if you make out-of-work payments more generous and give people extra money, they tend to use that money to wait a bit longer to find work.”

Following the release of this report, Paridhi Jain, founder of financial education platform SkilledSmart, told Lawyers Weekly that despite the findings of the research, context remains important.

“I’d be keen to see a more nuanced discussion about why people stayed out of employment longer, after withdrawing from superannuation. There is a lot of nuance that is missing if we only look at one or two of the findings from the report,” she said.  

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“And is the core metric for success how quickly someone went back to employment? For example, did they take longer to return to work because they had kids at home that were being homeschooled due to school lockdowns? Context is very important.”

Superannuation fund legalsuper CEO Andrew Proebstl added that the temporary measure from the Australian government meant that a high number of superannuation funds saw “large outflows” as a result of members taking up the opportunity to access their super as result of the policy.

“[Despite] this, legalsuper was not one of the funds affected in this manner and saw only a modest take-up from its membership. Data obtained by legalsuper, pinpointing the age range of 18 years to 29 years, indicates an average claim of $9,864," he told Lawyers Weekly. 

"The largest cohort of members accessing their superannuation early, were young lawyers aged between 25-29, with an average claim of $6,274. Of these claims 72.4 per cent were female and 27.6 per cent male which is reflective of legalsuper’s membership demographic (comprises of approx. 74 per cent females) and is also a reflection of the demographics of people working within the legal profession."

However, the consequences of withdrawing superannuation early can have long-term effects.

“Superannuation has been set up to help people afford retirement later on in life, and typically, it’s very difficult to access that money before your 60s. This can be frustrating for some people because if they’re struggling right now in the present, it can feel outrageous that there’s a pool of your own money that you can’t access, set aside for your future.

“But to understand the real value of superannuation, and therefore the importance of not withdrawing it, you need to have a certain level of appreciation for how investing works and how huge an impact time has on the growth of your investments. Your money in superannuation is being invested for you, so the objective is for that money to grow over time. Investments need time to grow; it’s like putting seeds in a garden, you need to give it time,” Ms Jain explained.

“That’s why Industry Super Australia estimated that withdrawing $20,000 over the next year could cost a 30-year-old $100,000 at retirement. So, it’s not about the dollar value today; it’s about what that could have grown to by the time you retire, which can be significant. The challenge so many people have is caring about something that is far in the future.”

In terms of if she would recommend this to younger lawyers, Ms Jain said that different situations could mean different things, particularly in the midst of a global pandemic.

“From a purely financial perspective, if you can afford to leave your super untouched and, in fact, contribute extra to your super, in the long term, you will likely be better off. It’s hard for people to really wrap their heads around just how significantly your money can grow in a super fund over the long term. We’re talking tens of thousands, if not hundreds of thousands of dollars of difference by the time you retire. So, if you have a choice, if you can afford to not access your super, that’s ideal,” she added.

“However, we also know that a lot of people were not in that position after COVID. For some, accessing that extra money in super really could have been a financial lifesaver. So again, context is important. That said, there were also people who didn’t need the money but withdrew it, and that’s something I would suggest wasn’t a great idea from a financial standpoint.”

Particularly for young Australians who withdrew their super early during the pandemic, the full impacts of doing so are so far unknown, according to Mr Proebstl. 

"Superannuation is a long-term investment vehicle and whilst there has been much discussion within the finance sector regarding the long-term affects of accessing super early may have on individual retirement savings, the true and full impact is not yet known.  This is particularly true with respect to younger Australians due to the loss in the compounding affect over the long term," he added. 

"Early access to superannuation in essence reduces the accumulated earnings held within a superannuation fund, thus reducing the compounding earnings credited into superannuation accounts crucial to boosting superannuation savings over the long-term. The early access measure is also potentially detrimental to women in particular, as in general superannuation balances for women are lower. This is due to a number of factors including the time women take out of the workforce for life events, thus impacting employer superannuation guarantee contributions and also the well documented issue of the gender pay gap impacting superannuation and retirement savings for women."

To combat this, Ms Jain said it’s important for young lawyers, in particular, to learn as much about their finances, superannuation and budgeting as they can.

“At the end of the day, people’s decisions in relation to their super fund are often quite directly correlated with how well they understand the role investing plays on your wealth long term, and how superannuation can support that,” she said.

“If you don’t understand your super, or how to make the most of it, you could be missing out on tens if not hundreds of thousands of dollars over your lifetime. So, it’s worth spending a little time learning about your superannuation.”