Struggling renters withdrew their super to keep a roof over their head through the pandemic, a study has found

Australian renters have been buffeted during the pandemic. (Adrian Greeman, Construction Photography, Avalon, Getty Images)
  • A new study of 15,000 Australian renters has revealed how hard the pandemic hit.
  • The Australian Housing and Urban Research Institute (AHURI) found 40% of tenants struggling to pay rent dipped into their superannuation to keep their home.
  • “The key question for Australian policy makers is why policies actually designed to help people in such circumstances, notably Commonwealth Rent Assistance, appear to be inadequate,” University of Glasgow professor Mark Stephens wrote.
  • Visit Business Insider Australia’s homepage for more stories.

As the pandemic shut down entire industries and even states, 2.1 million Australian renters wondered how they were going to keep a roof above their heads.

They had few options if they suddenly found their rent unaffordable as a result, often relying on bandaid solutions, the Australian Housing and Urban Research Institute (AHURI) has revealed.

“We have not yet seen the full health or economic effects of COVID-19 but, for many reasons, the rental sector will almost certainly be where many of Australia’s big challenges sit,” editors Emma Baker and Lyrian Daniel wrote in a new study documenting the experiences of 15,000 tenants.

The Institute found renters relied on a variety of temporary measures including digging into their savings, rent deferments or, drastically, the fact that eviction moratoriums became effective nationwide.

However, perhaps most significant was the federal government’s controversial early super release scheme, allowing Australians to withdraw up to two allotments of $10,000 from their fund — provided the money was there.

The study shows that was a primary source of relief, with as many as one in five renters doing so. Often they didn’t have much choice. Around 40% of those struggling with unaffordable rent told the AHURI they withdrew simply to pay it.

While the federal government may laud the finding as an achievement of the scheme, University of Glasgow professor Mark Stephens who worked on the project said it “risked undermining the long-term financial security” of participants.

“This [finding] is strongly suggestive of income loss, and the key question for Australian policy makers is why policies actually designed to help people in such circumstances, notably Commonwealth Rent Assistance, appear to be inadequate,” Stephens wrote.

Rather than be shielded from financial harm by the social security net, often the most vulnerable individuals were encourage via the scheme to bear the costs of the shutdown themselves.

Something has got to give

This year’s economic carnage has highlighted how falling affordability and declining home ownership has left many Australians in a precarious position.

While applications for a mortgage freeze were automatically approved, the process for a rental reduction was both discretionary and more complex owing to a disproportionate power dynamic.

Around 17.5% of tenants, or 367,000, asked their landlords for a rental reduction, with one third being rejected outright.

One in five found it difficult to pay their bills once their rent is deducted, and one in three skipped meals during the pandemic.

However, the pain goes beyond the financial. Two thirds of tenants reported having quality issues with their home, around one in four struggle to keep warm in the colder months and have mould problems.

Half reported struggling with their mental health, and one in ten said they’d face a ‘significant’ mental health ordeal this year.

“COVID-19 does not make people homeless, but the changes it brings are having profound effects — loss of employment, reduced incomes, greater inequality — undermines individuals, their housing security, their expectations around accommodation and their socialisation,” professors Andrew Beer and Rebecca Bentley wrote.

“It is not surprising, therefore, that our rental stories reveal a sector requiring significant policy attention.”

Without it, and as prices rise nationwide, many tenants have few alternatives.