The Commonwealth Government has announced a number of measures to support Australians and the economy in response to the Coronavirus.
The Government wishes to implement many of their stimulus measures as soon as possible and a package of Bills will be introduced into Parliament in the final Autumn sitting week (23 – 26 March 2020) as legislation needs to pass to give effect to these proposals.
Outlined below is a summary of some of the key measures announced for individuals.
Access to superannuation savings will be broadened where you’re in financial distress because of the Coronavirus and meet certain eligibility conditions. To be eligible, you must meet one of the following conditions:
- You’re unemployed
- You’re eligible to receive Jobseeker Payment, Youth Allowance (jobseekers), Parenting Payment, Special Benefit or Farm Household Allowance
- On or after 1 January 2020, you were made redundant, your hours of work reduced by at least 20%, or if you’re a sole trader, your business was suspended or your turnover reduced by at least 20%.
If you’re eligible you’ll be able to access up to$10,000 before 30 June 2020 and an additional $10,000 from 1 July for approximately three months (depending on the timing of the legislation).
Applications will be through MyGov and you’ll need to certify that you meet one of the above eligibility requirements. Once the Australian Tax Office (ATO) confirms you’re eligible, they will issue you and your super fund with a determination and the payment will be made to you. Payments will be tax-free and amounts received will not impact Centrelink or DVA entitlements.
Income stream drawdown rates
There will be a temporary reduction in the minimum annual amount that you’re required to withdraw from your super income stream (allocated / account-based pension). The reduction in the minimum drawdown rates will apply for the duration of this financial year and for the 2020/21 financial year.
Social Security – $750 cash payments
The Government is providing two separate $750 payments to eligible income support recipients and concession card holders.
- The first payment will be paid automatically from 31 March 2020
- The second payment will be paid automatically from 13 July 2020
To be eligible for the first $750 payment, you must be residing in Australia and receiving one of the income support payments, or a holder of one of the concession cards listed in the table below on 12 March 2020.
To be eligible for the second $750 payment, an individual must meet the following criteria on 10 July 2020:
- Must be residing in Australia, and
- Must be receiving one of the payments or hold once of the concession cards listed above, except for those who are eligible to receive the Coronavirus supplement (see below).
The Coronavirus supplement of $550 per fortnight will be paid to new and existing recipients of:
- JobSeeker Payment
- Youth Allowance (Jobseeker)
- Parenting Payment
- Farm Household Allowance, and
- Special Benefit
The supplement will be paid over the next six months and will be paid automatically with the person’s ordinary fortnightly entitlement. It will be paid from 27 April.
Individuals who are eligible to receive the Coronavirus supplement are not eligible for the second $750 payment.
Waiting Periods and asset testing
The ordinary one week waiting period that applies to some payments will be waived when you’re claiming because you’re impacted by COVID-19. The Liquid Assets Waiting Period (LAWP) will also be waived of you’re entitled to the Coronavirus Supplement.
The assets test will also not be applied when determining entitlement to JobSeeker Payment, Youth Allowance (Jobseeker) and Parenting Payment for six months. The income test will continue to apply and reduce the amount of the payment you’re eligible for.
Reduction in deeming rates
A further reduction in deeming rates was announced on 22 March. The deeming rates will reduce as follows:
The deeming thresholds are unchanged at $51,800 (single) and $86,200 (couple) which are generally indexed on 1 July each year. The rates will take effect from 1 May 2020, and any additional entitlement will be paid from 1 May 2020.