Updated: Stimulus relief package for individuals and what this could mean for you
A number of measures have been announced to support Australians and the economy in response to the Coronavirus. We have put together some information to summarise the key measures and to assist you in understanding the help that could be available to you.
When will these announced measures be implemented?
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. These Bills will provide more detail on the announced measures. Outlined below is a summary of some of the key measures announced. Importantly these measures are not yet legislated - therefore no changes should be made until the legislation passes.
Superannuation Access to super savings
Access to superannuation savings will be broadened where you’re in financial distress because of the Coronavirus and meet certain eligibility conditions. 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 legislation).
To be eligible, you must meet one of the following conditions:
- you’re unemployed or
- you’re eligible to receive Jobseeker Payment, Youth Allowance (jobseekers), Parenting Payment, Special Benefit or Farm Household Allowance or
- 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% or
Applications will be through MyGov and you’ll need to certify that you meet one of the above eligibility requirements. Once the ATO confirms you’re eligible, they will issue you and your super fund with a determination and the payment will be made to you. If you have a self-managed super fund, arrangements will differ.
Payments will be tax-free and amounts received will not impact Centrelink or DVA entitlements. It is expected that claims can be made from mid-April.
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 (Account Based Pension). The reduction in the minimum drawdown rates will apply for the duration of this financial year and for the 202/21 financial year.
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Age
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Minimum Draw down
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|
Current
|
New
|
|
Less than 65
|
4.0%
|
2.0%
|
|
65-74
|
5.0%
|
2.5%
|
|
75-79
|
6.0%
|
3.0%
|
|
80-84
|
7.0%
|
3.5%
|
|
85-89
|
9.0%
|
4.5%
|
|
90-94
|
11.0%
|
5.5%
|
|
95 +
|
14.0%
|
7.0%
|
Social security $750 cash payments
Two payments of $750 each will be paid to eligible income support recipients and concession card holders. The first tax-free payment will be available to eligible income support recipients as at 12 March 2020 and is expected to be automatically paid to eligible recipients from 31 March 2020.
The second payment will be available to those who aren’t eligible for the Coronavirus supplement (see below) and will be automatically paid from 13 July 2020.
Eligibility for payment one
To be eligible, 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. However, in relation to the first $750 payment you must also have been receiving an income support payment on 12 March 2020. If you had applied for an eligible payment before 12 March 2020 and are subsequently granted the payment, you will also be eligible for the one-off payment.
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Income Support Payments
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Concession Cards
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Age Pension
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Austudy
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Pensioner Concession Card
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|
Disability Support Pension
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Youth Allowance
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Commonwealth Seniors Health Care Card
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|
Carer Payment
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Special Benefit
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Veteran Gold Card
|
|
Carer Allowance
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Sickness Allowance
|
|
|
Wife Pension
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Family Tax Benefit (including Double Orphan Pensions)
|
|
|
Parenting Payment
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Farm Household Allowance
|
|
|
Widow B Pension
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Veteran Service Pension
|
|
|
ABSTUDY (Living Allowance
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Veteran Income Support Supplement
|
|
|
Bereavement Allowance
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Veteran Compensation Payments
|
|
|
Partner Allowance
|
War Widow Pension
|
|
|
Widow Allowance
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Veteran Payment
|
|
|
Newstart Allowance
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|
|
Coronavirus Supplement
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.
Existing social security recipients
If you’re already receiving a particular benefit or payment and your circumstances change due to COVID-19, your benefit may remain unchanged. However, a change in circumstances that is not a result of COVID-19 will be assessed under the ordinary rules, and may impact your entitlement. All changes should be reported to Centrelink or DVA.
- Recipients of Carer Payment who are impacted will not have their benefits changed.
- Child Care Subsidy: if your child cannot attend childcare as a result of COVID-19, but you’re still charged a fee from your childcare provider, you may still receive the subsidy for up to 42 days of absence. This applies also to non-COVID-19 related absences. If your activity hours change, you don’t need to update your activity tests where it is due to a requirement to self isolate, or if you’re on leave.
- Newstart or Jobseeker: Recipients with mutual obligations (for example Newstart or Jobseeker recipients who usually need to be actively looking for work, volunteering, or doing some paid work) will be provided flexible options to ensure your safety. This may apply where you’re unable to satisfy these requirements because you’re self-isolating, or you’re a primary carer, caring for a child whose school has closed, or a disabled adult whose day service closes. You may receive an exemption from this requirement without a need for medical evidence.
- Youth Allowance (student): Activity requirements for study will be amended. This means that if you’re a student and you’re unable to attend studies due to the virus, you may be exempt from meeting this requirement.
- Students and trainees: If you’re self isolating at home or your education provider closes or reduces your study load, your payment won’t change. You must remain enrolled in study and have a plan to return and must tell Centrelink if this doesn’t apply to you.
Applying for a benefit
If you’re unable to work, are in isolation or hospital, or you need to care for children as a result of COVID-19, you may be eligible to apply for a payment.
If you apply for a social security benefit or concession card and your claim is related to COVID-19, some of the ordinary eligibility rules may be waived. Also, if you’re an employee, and you are diagnosed with COVID-19 or are in isolation, you may be eligible for an income support payment if you have no employer leave entitlements.
Waiting periods and assets 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 if you’re entitled to the Coronavirus Supplement. If you’ve already applied for a payment and are currently serving a LAWP, you won’t need to serve the remainder of the waiting period. This applies also if you’ve applied for a payment which is eligible for the Coronavirus Supplement.
The Income Maintenance Period and Compensation Preclusion Periods will continue to apply.
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 may reduce the amount of the payment you’re eligible for. To access these measures, recipients of JobSeeker Allowance and Youth Allowance (Jobseeker) cannot be receiving employer benefits (such as sick leave or annual leave payments) or income protection payments at the same time.)
Reduction in deeming rates
A further reduction in deeming rates was announced on 22 March.
The deeming rates will reduce as follows: C
|
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Current
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From 01 May 2020
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Lower deeming rate
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1.0%
|
0.25%
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Upper deeming rate
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3.0%
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2.25%
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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.
Faster claims process
New applicants are being encouraged to claim online where possible to ensure claims are processed as fast as possible. If this isn’t an option, claims can be made over the phone. To support this process, some temporary changes are also being made to identification requirements and other evidence which is generally required to process a claim.
Tips to be ready
If you don’t already have the MyGov app set up on your smart phone – please get this set up as soon as possible. Use this link https://www.servicesaustralia.gov.au/individuals/online-help/create-mygov-account
If you are currently receiving an Account Based Pension from super – consider how much income you need to continue to draw.
If you are currently in receipt of an Age Pension, consider updating Centrelink with your current asset values via the MyGov app or page.
Source: MLC and www.pm.gov.au/media
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