Below we outline the announcements that may be of particular interest to individuals, retirees and small business including:
-
Temporary early release of superannuation for those in need
-
Reducing the minimum payment rates for superannuation income streams
-
Two $750 lump sum payments for pensioners and concession card holders
-
Additional income support payments for the unemployed
-
Wage subsidy to retain employees
-
Support for small business
Early access to superannuation
Individuals affected by the Coronavirus will have the opportunity to access up to $10,000 from their
superannuation between now and 1 July 2020 with a further $10,000 available if needed from 1 July 2020 until 24 September 2020.
To be eligible, one of the following requirements must be satisfied:
-
You are unemployed; or
-
You are eligible to receive a JobSeeker Payment, Youth Allowance for jobseekers, Parenting Payment, Special Benefit or Farm Household Allowance; or
-
On or after 1 January 2020:
-
You were made redundant; or
-
Your working hours were reduced by 20 per cent or more; or
-
If you are a sole trader – your business was suspended or there was a reduction in your turnover of 20 per cent or more.
-
-
If eligible, you can apply directly to the ATO via MyGov (www.my.gov.au). The ATO will then issue a determination and they will contact your superannuation fund directly to release the money.
Minimum pension drawdowns reduced by 50%
For the 2019/20 and 2020/21 financial years, the minimum payment rate that applies to superannuation income streams such as account based pensions will be reduced to assist retirees who would otherwise be forced to sell down assets to meet their minimum pension requirement. Most super funds will apply the new minimum from 1/7/20 unless you have instructed them to reduce your pension payments from an earlier date.
$750 lump sum payments
Two separate lump sum payments of $750 will be available to eligible social security, veteran and other income support recipients and eligible concession card holders to help stimulate spending in the economy.
The first will be available to those eligible for a payment or concession card at any time between 12 March 2020 and 13 April 2020 with the second $750 payment available to eligible payment recipients and concession card holders on 10 July 2020. For a full list of who is eligible, please refer to https://treasury.gov.au/coronavirus/resources.
The two lump sum payments will be received tax free and will not impact existing income support payments. You are not required to apply for the payment. It will be paid automatically.
Additional income support for the unemployed with faster access
The Government will introduce the Coronavirus supplement, a
$550 per fortnight payment available for the next six months to eligible payment recipients. Additionally, access to income support will be expanded and the claims process accelerated to ensure timely payments for those in need.
The payment categories eligible to receive the Coronavirus Supplement are:
-
JobSeeker Payment
-
Youth Allowance Jobseeker
-
Parenting Payment
-
Farm Household Allowance
-
Special Benefit recipients
Additionally, for the next six months, the Government will expand access to income support (such as JobSeeker Payment) to groups who may not have previously been eligible and an asset test will not apply during this time.
The Government is encouraging all applications to be made online or over the phone if internet access is not available. Measures have been adopted to accelerate the claims process with the Coronavirus Supplement and expanded access measures commencing on 27 April 2020.
Wage subsidy to retain employees (JobKeeper Payment)
A wage subsidy of $1,500 per fortnight per employee will be made available to eligible employers to help keep as many employees ‘on the books’ as possible. This payment will commence from early May 2020 (backdated to 30 March) and it will be the employer’s legal obligation to pass on the full amount to workers.
Full-time and part-time employees, sole traders and casual employees (where they have been employed with their current employer for more than 12 months) as at 1 March 2020 will be eligible if the businesses employing these staff have experienced a reduction in turnover of:
-
More than 30% compared to the same period last year for businesses with annual turnover less than $1 billion;
-
More than 50% compared to the same period last year where turnover exceeds $1 billion.
Eligible businesses should register with the ATO immediately and provide the information requested about eligible employees.
Support for small business
A range of financial assistance has been announced for small businesses to help manage cashflow, encourage investment and support those businesses in distress due to the COVID-19 pandemic.
The measures include:
-
Cashflow assistance of between $20,000 and $100,000 for small businesses (including not-for profits and charities) that employ people. The payment will be tax free.
-
A wage subsidy of 50 per cent of an apprentice/trainee’s wage (up to $21,000 per person) in the 9 months from 1 January 2020 to 30 September 2020.
-
Temporary relief from actions that may otherwise result in insolvency or forced closure.
-
An increase from $30,000 to $150,000 in the Instant Asset Write-off threshold allowing businesses to immediately deduct each eligible asset purchased for less than $150,000 until 30 June 2020. Deductions for depreciation will also increase.
-
Additional access to short term funding with the Government guaranteeing 50 per cent of unsecured loans up to $250,000 where eligibility criteria is met.
For more information
Please call us on P: 08 8268 5160 or refer to one of the official Government information sources below:
Treasury – https://treasury.gov.au/coronavirus
Australian Tax Office – https://www.ato.gov.au/General/ COVID-19/
ASIC’s Moneysmart website – https://moneysmart.gov. au/covid-19
Australian Government – https://www.australia.gov.au/
