Allowing unemployed Australians to access super during the early stages of the COVID pandemic delayed their return to work, a new study shows.
The research also found unemployed people who withdrew their super did not end up in higher-paying jobs when they eventually re-entered the workforce.
Australians who had lost work were in March 2020 allowed to take out a $10,000 lump sum from their super to support themselves.
Close to one-fifth of the population between 16 and 65 responded to the emergency measure, with many taking out the maximum of $10,000.
The study found unemployed people who accessed their super at the worst stage of the pandemic, between April and June 2020, spent about seven months longer on welfare than those who chose not to.
"The extra money leads to longer spells on unemployment and we find no evidence of higher wages for those who take longer to find employment," the Australian National University study concluded.
Separate research has meanwhile found young people to be more positive about their lives and in less psychological distress now that the country is recovering from the pandemic.
More than two in three young people aged 18 to 24 said their lives had improved in the past year, while there was a five per cent drop in psychological distress, ANU's Professor Nicholas Biddle found.
Prof Biddle said stress remained above pre-pandemic levels, with young people "the most dramatically impacted" by COVID-19.
"Overall this is really encouraging news," he said.
"It's heartening to see the majority of young Australians say they are feeling much better ... even though they still face ongoing pandemic pressures."
While young people recorded the biggest decline in psychological distress, Australians of all ages felt better than they did in October 2021.
More than half those surveyed said they thought their life was worse in May 2020, months after tough restrictions including lockdowns were introduced.
It comes after national cabinet decided pandemic leave would remain in effect as long as mandatory COVID-19 isolation periods are in place.
The payments were due to expire at the end of the month.
Under the changes, people can only claim the payment three times during a six-month period.
Emergency Management Minister Murray Watt said it was important to put limits on how many times people could claim pandemic leave payments to make sure they were not taking advantage.
"Unfortunately, we have uncovered evidence of people trying to rort the system," he told ABC Radio on Thursday.
"This is an expensive measure, an important public health measure but an expensive one and we owe it to the taxpayers to make sure it isn't being abused."
Senator Watt said there had been times where people had tried to claim as many as seven lots of the pandemic leave payment.
The ACTU welcomed the decision to extend the payments. It said it was critical workers were able to isolate while infectious.
The union's assistant secretary Liam O'Brien said financial incentives for people to stay home while sick should remain.
"Paid pandemic leave needs to stay in place as long as working people are being asked to isolate and take time away from work to control the spread of the virus," he said.
"The third of our working population who do not have access to paid sick leave cannot be expected to go without pay to keep the rest of the community safe."
