COVID-19: Economic Stimulus – Benefits for Individuals
It has been an interesting day with NSW and Victoria both announcing shut downs to commence within 48 hours. We know this will have a significant impact on many of you, including the security you feel in your job. The Federal Government today announced a second round of Economic Stimulus measures, a number of which were targeted at individuals who have lost their jobs or had a decreased income as a result of the Corona virus. We note that the measures are relevant for sole traders as well as employees.
Corona virus supplement
The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Corona virus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
The Corona virus supplement will be paid for the next 6 months. Eligible income support recipients will receive the full amount of the $550 Corona virus supplement on top of their payment each fortnight.
We also understand that time limits will be waived to access the JobSeeker Payment to assist those who have lost their jobs as a result of the Corona virus.
Payments to support households
In addition to the $750 stimulus payment 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 Corona virus supplement.
This second payment will be made automatically from 13 July 2020.
The first 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.
Early release of superannuation
The Government will allow individuals in financial stress as a result of the Corona virus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Please contact us if your are considering accessing your superannuation early to discuss if this is the best option for you.
Temporarily reduce 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 by providing them with more flexibility as to how they manage their superannuation assets.