Posted on 24/3/2020
Lower-income Australians, pensioners, other social security and veteran income support recipients and eligible concession card holders will be eligible for cash payments as follows.
For the next 6 months, a welfare payment at a rate of $550 per fortnight will be paid to both existing and new recipients of Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
Two separate payments of $750 will be received by social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020.
Approximately 50% of those that will benefit from the payments are pensioners. The second payment will not be made to those eligible for the $550 per fortnight payment (above).
Individuals “affected by the Coronavirus” will be able to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21 – tax free. The withdrawn amounts will not affect Centrelink or Veterans’ Affairs payments.
To apply for early release you must satisfy one or more of the following requirements:
On or after 1 January 2020:
From mid-April eligible individuals will be able to apply to the ATO online through myGov to access 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 approximately three months (exact timing will depend on the passage of the relevant legislation).
After the ATO has processed the application, they will issue the member with a determination. The ATO will also provide a copy of the determination to the member’s superannuation fund, which will advise them to release the superannuation payment. The member’s fund will then make the payment to the member, without the member needing to apply to them directly.
Separate arrangements will apply for members of SMSFs. The ATO will publish guidance shortly for SMSFs.
Ed works in a popular bar in Melbourne. As a result of the Coronavirus, Ed has had his work hours reduced from 40 hours on average in the second half of 2019 to 20 hours per week on average in May 2020. As a result, Ed determines that his hours over the last month have reduced by more than 20 per cent compared to the average of his hours over the last six months of 2019. Ed decides to apply for the early release of $8,000 of his superannuation in May 2020 to help pay his rent and other living expenses. Ed self-certifies that he is eligible for early release on myGov. He could have applied for up to $10,000, but chose not to. Ed cannot seek any further early release of superannuation in 2019-20 on the grounds that he has been affected by the adverse economic effects of the Coronavirus.
However, Ed finds after 1 July 2020 that his hours continue to be reduced by more than 20 per cent compared to the average of his hours in the last six months of 2019. Ed decides to make a second application and self-certifies through myGov that he is eligible for early release. He is able to apply again for a release of up to $10,000 of his superannuation. Ed submits a second application for the full amount of $10,000 this time. For each application, the ATO approves Ed’s early release and notifies both him and his superannuation fund. Ed has received a total of $18,000 of his superannuation in two separate payments. He will not be taxed on this amount and is free to spend this money on anything he chooses, or save it for future expenses. He is also free to recontribute any unused amounts to his superannuation in the future (within his contribution caps).
Superannuation minimum drawdown requirements for account-based pensions and similar products will be reduced by 50% for 2019-20 and 2020-21. This measure will reduce the need for SMSF trustees to sell investment assets to fund minimum drawdown requirements. The rate reductions are as follows:
A 0.5% reduction in both the upper and lower social security deeming rates was previously implemented on 12 March 2020. The deeming rates will again be reduced by another 0.25%.
From 1 May 2020, the upper deeming rate will be 2.25% and the lower deeming rate will be 0.25%. The deeming rate change will benefit around 900,000 income support recipients, including around 565,000 Age Pensioners who will, on average, receive around $105 more of the Age Pension in the first full year the reduced rates apply.
A package of Bills is being introduced into Parliament on 23 March 2020 for urgent consideration. Subject to passage of the Bills through Parliament, the Government will then move to immediately make, and register, supporting instruments.
Looking for the latest on the proposed Government Stimulus Package for Businesses? Click Here