Updated 30 March 2020
The Australian Government is providing financial assistance to Australians in the following ways:
- Income support for individuals
- Tax-free $750 payment to social welfare recipients
- Early access to superannuation
- Providing support for retirees
Here’s what we know so far:
Income support for individuals
Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
It is expected that the definition of ‘unemployed’ will be relaxed to allow individuals to obtain access to income support even if they have not lost their job altogether. i.e. they have been temporarily stood down as a result of the coronavirus.
Tax-free $750 payments to social welfare recipients
The Government is providing two separate $750 payments to pensioners, social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020.
The payment will be tax-free and will not count as income for Social Security, Farm Household Allowance and Veteran payments.
There will be two separate payments per eligible recipient even if they qualify in multiple ways.
Early access of superannuation
The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
Eligible individuals can apply to have their superannuation released through the myGov website before requesting the payment from their superannuation fund.
We recommend you take caution taking this step as you are effectively taking your superannuation at a loss that may be difficult to get back.
Providing support for retirees
Temporarily reducing superannuation minimum drawdown rates
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements.
Reducing social security deeming rates
On 12 March, the Government announced a 0.5 percentage point reduction in both the upper and lower social security deeming rates. The Government will now reduce these rates by another 0.25 percentage points.
As of 1 May 2020, the upper social security deeming rate will be 2.25 per cent and the lower social security deeming rate will be 0.25 per cent. The reductions reflect the low interest rate environment and its impact on the income from savings.
Casual employees able to access the Newstart ‘sickness payment’
While not part of the stimulus package, the Prime Minister has stated that casual employees required to self-isolate or who contract the coronavirus will be eligible for a sickness payment (jobseeker payment) through Newstart. The normal waiting period for this payment will be waived.
We’ll bring you more details as soon as they become available.