Australians who are laid off as a result of the coronavirus outbreak will be allowed to pull money out of their superannuation, Scott Morrison announced on Sunday.

Withdrawals will be capped at $10,000 this financial year, and a further $10,000 next financial year, and will be tax-free, the prime minister and his treasurer, Josh Frydenberg, said.

The withdrawals will be available from April to those eligible for the coronavirus supplement as well as sole traders whose hours or income has fallen 20% or more as a result of coronavirus.

The decision means some of those worst-hit by the outbreak will be able to pay rent, meet mortgage repayments and buy food.

It also goes some way towards satisfying some, mainly on the right, who dislike compulsory super and have long seen early access as a way to weaken the sector – especially the much-hated industry funds that are jointly controlled by unions and employers.

But it also means that if and when the crisis ends people who have drawn down will suffer a permanent hit to their retirement incomes – made worse by the fact that the sharemarket, where around half of super is invested, is down by a third due to the pandemic.

Those most likely to need emergency cash are also those most likely to have low balances to begin with.

The average balance of members of Hostplus, the industry fund that services the virus-ravaged hospitality and tourism sectors, is just $37,000.

Because the sector is full of casuals and part-time workers, many will have much, much lower balances which they will exhaust if they draw down on their super.

The move also presents a challenge to funds such as Hostplus and the retail industry fund Rest, which are likely to be inundated with redemption requests.

Treasurer Josh Frydenberg said that the super fund regulator, Apra, has assured him the move won’t have “a significant impact on the industry overall”.

The key words is “overall”. Every fund is different.

To chase returns, funds have invested some of members’ cash directly in so-called “illiquid” assets like airports, seaports and real estate, rather than in listed companies.

They’ve been able to do this while still meeting the flow of redemption requests because in normal times they have a very good grasp on how many people are likely to retire and need to start drawing down on their account in any one year.

The flow of redemptions has easily been met by the amount invested in “liquid” assets – cash or easy-to-sell assets like shares.

But selling an airport, for example, takes a while at the best of times. These are not the best of times, and who would want to buy an airport right now anyway, when there’s no traffic? And at what price?

Hopefully no funds will be forced to freeze redemptions – as some did during the global financial crisis – or seek a government bailout.

But even in the best-case scenario, the decision to allow drawdowns will crimp the ability of super funds to invest in long-term, high-growth assets when the much-hoped-for economic recovery finally kicks in.

This is because it will suck out the cash of younger members who normally could be relied upon to stay in their super accounts for decades, skewing the system towards older people who are going to need their money sooner rather than later.

Super funds will have to hold more cash and shares to meet those redemption needs.

When people become used to drawing down on their super it will also be difficult to turn off the tap once the crisis ends.

First homebuyers are already able to withdraw up to $30,000 of super to help buy a house, and the pressure will be on to allow yet more exemptions.

This weakening of the super system has long been desired by some on the right who are suspicious about and hostile to industry super’s association with the unions and the broader sector’s love of long-term assets.