But Warrnambool's Paul Smith, who withdrew $10,000 during the height of health restrictions, is grateful he had the safeguard and has so far not needed to spend the money.

Mr Smith's hours of employment dived during the height of health restrictions, forcing him to plan for the worst.

"There were a lot of unknowns in regards to everything, particularly with job security, and I saw it as an option to give myself a little bit of a buffer," he told The Standard.

Mr Smith was among 16,761 in the Wannon federal electorate, which takes in Warrnambool, who accessed their super early under a COVID-19 federal policy.

But he's yet to spend the funds and is weighing up whether to put the money back into superannuation or hold onto it for longer.

"Funnily enough my super fund took a massive hit. So sitting there and not doing anything was probably as good as not making money," Mr Smith said.

"I have no intention of spending it, it's just a security blanket basically."

Most Australians are unable to access their superannuation until they turn 60 years of age.

But a federal policy aimed at supporting people whose employment hours reduced due to COVID-19 allowed Australians to apply to withdraw up to $10,000 of their super twice last year.

Industry Super Australia data shows 2972 account holders "wiped out" their superannuation in the Wannon electorate.

More women emptied their superannuation accounts than men in Wannon, while nationally more men have reduced their accounts to zero.

Wannon residents also made a total of 23,203 successful applications, withdrawing on average $7571 per application, accessing about $175.7 million.

But South West Credit chief executive officer David Brown said the Warrnambool-based bank's records showed a "very low number" of customers had received superannuation withdrawn early.

"The circumstances of each individual are unique," he said. "The majority I'm sure will have considered it carefully."

But Warrnambool financial experts and industry groups warn the numbers show there could be consequences to retirement funds down the track.

Silvan Ridge principal Steve Harris said people should have always seen withdrawing money early from superannuation as a "last resort".

"We understand that there are some people during COVID who felt they had no other options," Mr Harris said.

But he said workers would likely be better off not accessing their super because of the effects of compound interest and money paid into super being taxed at 15 per cent.

"If you are withdrawing to pay a mortgage, you have to remember that lending interest rates are sitting around three per cent, whereas compounding interest rates can be around 12 to 15 per cent," Mr Harris said.

"As a general rule it could be argued you would be better off leaving the money in superannuation.

"What you are doing is removing it from one tax effective vehicle and moving it an investment with earnings at higher tax rates, depending on circumstances."

Mr Harris said the policy was a "great initiative to people who really needed it" but risked potentially tempting people to access money that would deny them long-term gains.

"The benefit of hindsight will tell us clearly by the number of people who have withdrawn from their superannuation fund that they have taken advantage of it for other reasons than purely a necessity," he said.

He said people becoming disengaged with superannuation, particularly at younger ages, was a national issue as more retirees would need to become self-reliant in the future.

Warrnambool Deakin University business lecturer Michael Callaghan said the government had been "irresponsible" in setting the policy.

"It was short-term focused," Dr Callaghan said. "I understand there needed to be a policy to allow people in serious hardship to access superannuation. But I think the test wasn't steep enough."

He said some retailers had even encouraged people to withdraw their super.

"I am aware there were some retailers around town who encouraged people to do this to make sales," Dr Callaghan said.

"Given the high number of people who have taken $10,000 or more out of their superannuation it would suggest more people took money out for discretionary spending pursues like buying vehicles.

"To take an investment out of a falling market and into a depreciating asset like a car is particularly sad in terms of poor financial management."

Dr Callaghan said the impact could be in coming decades when more people needed to access pensions and cost taxpayers more.

"Superannuation was invented to reduce the burden of pensions on the Australian tax system and was set to do that quite well," he said.

Industry Super Australia says a 30-year-old who withdrew the maximum $20,000 in superannuation under the government's policy last year could have up to $80,000 less at retirement.

The group also argues that for every $1 taken out of superannuation by someone in their 30s taxpayers contribute up to $2.50 in increased pension costs.

About 775,000 Victorians withdrew superannuation early last year. Nationally about 3,422,000 made withdrawals.

Industry Super Australia deputy chief executive Matthew Linden is pushing for the federal government to continue with a legislated rise that would see employers pay 12 per cent superannuation by 2025, up from 9.5 per cent currently.

"The people living in and around Warrnambool who had to make the tough call to access their super did so with the confidence that the government has promised to give them a super boost," Mr Linden said.

"Ripping it away from them would be a cruel double blow, it would leave them with far less at retirement and saddle the next generation with a whopping pension."

He said superannuation should not be used to solve budget, housing or stagnant wage growth issues.

"Dipping into super early comes at a steep cost for the individual and the future taxpayers, as a society we shouldn't be demanding our young people pay the price again," Mr Linden said.

Warrnambool's Paul Smith has no regrets about withdrawing the money given circumstances have not forced him to spend it.

"In hindsight we are all wiser but you do what you think is the right thing at the time," he said.

"They are probably right that you are going to be a few bucks worse off but a lot of people don't think down the track.

"It's about now and tomorrow. There was an element of self preservation and survival."

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