Covid-19 Stimulus Packages for Individuals
On 12th March 2020, the Australian Government announced a package of measures in their first response to help the economy withstand and recover from the economic impact of coronavirus. A second economic package was announced on 22nd March 2020, which ramps up support for welfare recipients and those who lose work as a result of the pandemic. Following are the main temporary measures.
$750 payment
The first stimulus package announced a $750 payment to all social security, veteran and other income support recipients and eligible concession card holders. The payment will be made from 31 March 2020.
In the second package, the government announced a second $750 payment to be made to social security and veteran income support recipients and eligible concession cardholders.
The second payment is not available to those who receive the $550/fortnight coronavirus supplement (see below).
Coronavirus supplement payment
The second package also introduced a coronavirus supplement to be paid at a rate of $550 per fortnight for six months, on top of their JobSeeker (previously Newstart) payments.
The extra payment 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 government is also waiving the asset test and waiting period for access to the payment.
Access to superannuation
Under the second package, individuals in ‘financial distress’ will be able to access up to $10,000 per year from their superannuation savings, for the 2020 and 2021 financial years. This will be tax free and not affect Centrelink or veteran’s affairs payments.
This measure is available to those who are unemployed or eligible to receive a JobSeeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or the farm household allowance.
It is also available to those who are made redundant after 1 January 2020, or have their working hours reduced by 20%.
Sole traders are also eligible for this measure if their business is suspended or have a reduction in turnover of 20% or more.
Minimum drawdown rate for superannuation
The minimum drawdown rates for account based pensions and similar products will be reduced by 50% for the 2020 and 2021 financial years.
Deeming rates for pensioners
From 1 May 2020, the lower and upper deeming rates have been reduced to 0.25% and 2.25% respectively.
Legislation has been introduced into Parliament today to implement these measures and for them to take effect.