In 2017, marginalised groups were disproportionately impacted by extensive flooding in a rural community in Northern New South Wales, Australia, with greater risk of home inundation, displacement and poor mental health. While social capital has been linked with good health and wellbeing, there has been limited investigation into its potential benefits in post-disaster contexts, particularly for marginalised groups. Six months post-flood, a cross-sectional survey was conducted to quantify associations between flood impact, individual social capital and psychological distress (including probable post-traumatic stress disorder). We adopted a community-academic partnership approach and purposive recruitment to increase participation from socio-economically marginalised groups (Aboriginal people and people in financial hardship). These groups reported lower levels of social capital (informal social connectedness, feelings of belonging, trust and optimism) compared to general community participants. Despite this, informal social connectedness and belonging were important factors for all participant groups, associated with reduced risk of psychological distress. In this flood-prone, rural community, there is a pressing need to build social capital collectively through co-designed strategies that simultaneously address the social, cultural and economic needs of marginalised groups. Multiple benefits will ensue for the whole community: reduced inequities; strengthened resilience; improved preparedness and lessened risk of long-term distress from disaster events.