Please find some information that you may find useful which summarises the stimulus package and assistance provided by the Federal Government.
The Government is acting decisively in the national interest to support households and businesses and address the significant economic consequences of the Coronavirus (COVID-19).
While the full economic effects from the virus remain uncertain, the Government’s outlook has changed since their initial Economic Response announced on 12 March 2020 and as a result a second round of stimulus has just been announced.
These actions seek to provide timely support to affected workers, businesses and the broader community. The Government’s economic response targets three areas namely:
- Supporting individuals and households – below
- Support for businesses – click here for more
- Supporting the flow of credit – click here for more
Below is a summary of issues that may impact you, but please note that the situation is changing daily and individual State Governments are also undertaking their own measures.
Payments to support households
Two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders will be made. The payments are available to those who are eligible payment recipients and concession card holders at any time between 12 March and 13 April 2020 inclusive, and again on 10 July 2020. In the case of the second payment, the $750 payment is not payable for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement. The first payment will be paid automatically from 31 March 2020 and the second automatically from 13 July 2020.
The payment will be exempt from taxation and will not count as income for the purposes of Social Security, Farm Household Allowance and Veteran payments.
The complete list of eligible income support payments and concession card is available here: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households.pdf.
Temporary early release of superannuation
Eligible individuals can apply online from mid-April through myGov to access up to $10,000 of their superannuation before 1 July 2020 (only 1 application allowed for the period). They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (depends on the passage of the legislation).
To apply for early release you must satisfy any one or more of the following requirements:
- You are unemployed.
- You are eligible to receive a JobSeeker Payment, Youth Allowance for JobSeekers, Parenting Payment (which includes the Single and Partnered Payments), Special Benefit or Farm Household Allowance.
- On or after 1 January 2020
a. You were made redundant, or;
b. Your working hours were reduced by 20 per cent or more, or;
c. If you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.
Applications are directed to the ATO using the myGov portal, who will process and issue a determination with a copy to the Fund who will then release the money.
People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Temporarily reducing superannuation minimum drawdown rates
The superannuation minimum drawdown requirements for account-based pensions and similar products is being temporarily reduced by 50 per cent for the 2019-20 and 2020-21 income years.
Default minimum drawdown rates
Reduced rates by 50 per cent for the 2019-20 and 2020-21 income years
|95 or more||14%||7%|
Reducing social security deeming rates
As of 1 May 2020, the upper deeming rate will be 2.25 per cent (currently 2.5 per cent) and the lower deeming rate will be 0.25 per cent (currently 0.5 per cent).
On average, this will result in the receipt of around $105 more from the Age Pension in the first full year that the reduced rates apply.
If you require assistance to understand how these measures affect you and your family please get in touch with our office on 9481 2222 or complete the form below.