Government assistance options
The Australian Government has introduced a number of initiatives to support for individuals and households. A brief summary is provided below but please get in touch with the office or tax adviser if you have questions.
This payment was part of the Government’s third stimulus package announced on March 30, 2020. Employers and sole traders can apply to the Australian Tax Office to receive $1,500 per fortnight (before tax) to help cover the cost of their employees’ wages, for a maximum of 6 months.
Businesses must meet eligibility requirements and your employer will notify you if they intend to claim the fortnightly payment of $1,500 on your behalf.
The payment is available to full-time workers, part-time workers and sole traders, and those who have been stood down by their employer since March 1, 2020. Only casuals who have been with their employer for 12 months or more will be eligible for the payment.
The relevant Government agencies will contact you if your JobSeeker claim needs to be stopped in favour of the new JobKeeper allowance from your employer.
JobSeeker supplement of $550 per fortnight
If you have lost your job, been stood down or your income has fallen below a certain level, you may be eligible for support from the Government via the JobSeeker support package.
The Government will implement a new temporary Coronavirus supplement of $550 per fortnight, effectively doubling the current payment for job seekers. This Coronavirus supplement will be paid for the next 6 months to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit. Eligible income support recipients will receive the full amount of the $550 Coronavirus supplement on top of their payment each fortnight.
If your partner’s income exceeded $48,000 per year, you were previously ineligible to apply for the JobSeeker payment, which is $550 per fortnight. As announced on 30 March 2020, the partner income threshold will be extended to $79,762 per annum.
Further $750 payment for pensioners
In addition to the $750 stimulus payment for pensioners announced on 12 March 2020, the Government will provide a further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement.
This second $750 payment will be made automatically from 13 July 2020 to around 5 million income support recipients and eligible concession card holders. Around half of those that benefit are pensioners. The first $750 payment will be made from 31 March 2020 to people who will have been on one of the eligible payments any time between 12 March 2020 and 13 April 2020.
Superannuation early release up to $20,000 over 2 years
The Government will allow individuals in financial stress as a result of the Coronavirus to access a tax-free payment up to $10,000 from their superannuation in 2019-20, and a further $10,000 in 2020-21. Eligible individuals will be able to apply online to the ATO through myGov for access of up to $10,000 of their superannuation before 1 July 2020. You will also be able to access up to a further $10,000 from 1 July 2020 for another 3 months. You will not need to pay tax on amounts released and the money you withdraw will not affect Centrelink or Veterans' Affairs payments. In terms of timing, members will be able to apply for early release of superannuation from mid-April 2020.
We urge you to contact us if this is an option you are considering due to the possible implications on your financial position and strategy.
Pension minimum drawdown rate reduced by 50%
The minimum annual payment for account-based and similar pensions is calculated as a percentage of the account balance as at 1 July each year. The government has announced that the minimum annual payment will be reduced by 50% for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
Social security deeming rates reduced further
On top of the deeming rate changes made at the time of the first package, the Government will reduce the deeming rates by a further 0.25% to reflect the latest rate reductions by the RBA. As of 1 May 2020, the lower deeming rate will be 0.25% and the upper deeming rate will be 2.25%.
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