The ongoing Coronavirus crisis is all over the news and while the reports from Victoria are concerning, it’s good to remember that in absolute and global terms Australia is still managing the medical crisis exceptionally well. That said, the lockdowns, border closures and general loss of consumer and business confidence have affected the economy and so the Government has stepped in with massive support measures.
The massive cost of those measures—and better data about the crisis—means the government has recently proposed some changes to the conditions of some of their main measures.
Here’s a summary.
1. JobKeeper Payment
Under the JobKeeper payment, businesses that meet certain criteria can get a subsidy from the Government to continue paying their employees. Eligible employers need to apply to the ATO for the payment on behalf of their employees.
By keeping employees ‘tied’ to their jobs, JobKeeper is designed to maintain employment. Typically getting people back into the workforce is one of the most difficult economic problems caused by recessions.
JobKeeper was due to cease on 27 September.
The Government has proposed to extend the JobKeeper program with the payment to be reduced over time and paid at two rates. The two rates relate to whether you’re considered to be a full-time or part-time worker for this purpose, and is intended to be determined based on the hours you worked in the applicable test period. Depending on your circumstances, this test period will be either February or June 2020. Full-time workers are those who have worked more than 20 hours in the applicable test period.
From 28 September 2020 to 3 January 2021:
- the payment rate will fall to $1,200 each fortnight for full-time employees, and
- $750 each fortnight for part-time employees.
From 4 January 2021 to 28 March 2021, the JobKeeper payment rate will be:
- $1,000 each fortnight for full-time employees.
- The rate for part-time employees will fall to $650 each fortnight over this period.
2. Income support for individuals
The Government has implemented some temporary measures to enable more people to access some social security benefits and concessions. This includes temporarily relaxing some of the eligibility criteria for certain payments.
The Coronavirus supplement also temporarily increases the total payments available to eligible social security recipients.
- Payment of the Coronavirus supplement of $550 per fortnight for those already receiving a qualifying income support payment continues until 24 September 2020.
- The Government has proposed to extend payment of the supplement to 31 December 2020 at a reduced rate of $250.
The supplement is taxable and is paid automatically to people receiving an eligible payment or benefit. The list of qualifying income payments is available here.
If you’re receiving JobKeeper payment from your employer, this must be declared as income if you’re applying for or receiving any payments or benefits.
You can register online via MyGov or by phone for social security payments and other concessions.
3. Economic support payments for pensioners
Two payments of $750 each were made to people receiving certain social security payments and eligible concession card holders. The first payment was made from 31 March 2020 and the second payment was paid around 10 July 2020.
Importantly, these payments are not taxable and don’t count as income for the purposes of social security, Farm Household Allowance and veteran payments.
4. Access to your super
Whilst your super is designed to provide for a better lifestyle in retirement (via long-term investment), the Government is allowing temporary early access to super for certain people who are in financial difficulty as a result of COVID-19’s impact on your finances.
Eligibility rules apply to determine whether you’re able to make a withdrawal under this temporary measure.
From 1 July 2020, you can submit one request for an early release of up to $10,000 of your super—this is the second stage of the Government’s early release of super program, with an amount up to $10,000 also being available for release up to 30 June 2020.
Originally, applications for an additional lump sum in the current financial year needed to be submitted by 24 September but the Government has proposed to extend this date to 31 December 2020.
To apply for a release of your super under this temporary measure, applications need to be made online via MyGov. The ATO will then contact your fund to process the release.
It’s important to remember that any money you take out of super now leaves you less money invested for retirement. While it may make sense to draw on your super now if you are in financial need, a chat to a financial adviser may help you balance your current cashflow worries with your long-term lifestyle needs.
We are here to help you navigate your finances during COVID-19. Contact Dev Sarker at 1300 717 136 today!
Source: www.mlc.com.au (https://www.mlc.com.au/personal/blog/2020/08/managing_the_covid-19_crisis)