Financial support for individuals and households

Positive initiatives to assist small business
March 25, 2020

Financial support for individuals and households

The Coronavirus pandemic means thousands of workers face the prospect of lost income or unemployment.

In response, the Federal Government has temporarily expanded eligibility to income support payments and established a new, time-limited Coronavirus supplement to be paid at the rate of $550 per fortnight. This means those entitled to the full JobSeeker Payment (formerly known as NewStart Allowance) will receive $1,681.40 per fortnight.

The supplement is one of a series of assistance measures for individuals and households. Here’s a summary of what’s available:

The Coronavirus supplement

The Coronavirus supplement is a maximum of $550 per fortnight and will be made available to new and existing recipients of:

  • JobSeeker Payment (and all payments progressively transitioning to JobSeeker Payment; those currently receiving Partner Allowance, Widow Allowance, Sickness Allowance and Wife Pension)
  • Youth Allowance Jobseeker
  • Parenting Payment (partnered or single)
  • Farm Household Allowance
  • Special Benefits recipients
  • Abstudy
  • Austudy
  • Youth allowance for students

For the period of the Coronavirus supplement (for six months from 27 April 2020), there will be expanded access to the income support payments listed above. This includes:

  • JobSeeker Payment and Youth Allowance Jobseeker access for permanent employees who are stood down or lose their employment, sole traders, the self-employed, casual workers and contract workers who meet the income tests as a result of the economic downturn due to the Coronavirus. This may also include a person who is required to care for someone affected by the Coronavirus.
  • Waiving asset testing for JobSeeker Payment, Youth Allowance Jobseeker and Parenting Payment. Income testing will still apply to the person’s other payments, consistent with current arrangements.
  • Waiving of the one-week Ordinary Waiting Period.

People will not be permitted, and will need to declare that they are not, accessing employer entitlements (such as annual leave and/or sick leave) or income protection insurance at the same time as receiving JobSeeker Payment and Youth Allowance Jobseeker.

How to apply

If you’ve lost your job, been stood down, or find your business without customers due to the Coronavirus pandemic, you might be contacting Centrelink for the first time, or the first time in a long time. For information on how to apply for an income support payment, click below.

https://www.abc.net.au/news/2020-03-24/coronavirus-how-to-apply-for-centrelink-jobseeker-newstart/12083948

 

Household payments

The Federal Government is providing two separate $750 payments to lower income Australians, including pensioners, other social security and veteran income support recipients and eligible concession card holders. To see if you’re eligible for one or both of these payments, click below.

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households.pdf

Eligible persons do not need to apply for these payments. Services Australia or the Department of Veterans’ Affairs will automatically deposit payments into the bank accounts of those eligible from 13 July 2020.

Early access to super

The Federal Government is allowing eligible individuals affected by the Coronavirus to access up to $10,000 of their superannuation before 1 July 2020 and a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passing of legislation).

To apply for early release of super you must satisfy one or more of the following requirements:

  • you are unemployed
  • you are eligible to receive a JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment (partnered or single), Special Benefit or Farm Household Allowance
  • on or after 1 January 2020:
    – you were made redundant; or
    – your working hours were reduced by 20 per cent or more; or
    – if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20 per cent or more

People accessing their super in these circumstances will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

How to apply

If you are eligible, you can apply directly to the ATO through the myGov website: my.gov.au.

If you are suffering financial stress, we recommend exploring other possibilities before accessing your super. Given the falls in share markets, taking money from your super would be locking in losses. Give us a call on 9896 5100 to discuss your options first.

Support for retirees

The Federal Government has temporarily halved the minimum drawdown requirements for account-based pensions and similar products. This measure will reduce the need for retirees to sell investment assets to meet minimum drawdown requirements.

The reduced rates apply for the 2019/20 and 2020/21 income years:

Age Current minimum drawdown rates (%) Reduced rates for the 2019/20 and 2020/21 income years (%)
Under 65 4 2
65-74 5 2.5
75-79 6 3
80-84 7 3.5
85-89 9 4.5
90-94 11 5.5
95 or more 14 7

 

In another win for retirees, the deeming rate will be reduced by 0.25 per cent. From 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate 0.25 per cent.

The reductions reflect the low interest rate environment and its impact on income from savings. The Government estimates that people on the Aged Pension will, on average, receive an extra $105 in the first full year the reduced rates apply.

We’re here for you

Some of these initiatives are yet to receive Royal Assent but we expect that the legislation will be passed in due course. We’re here to help, please do not hesitate to give us a call on 9896 5100.