SuperTalk Blog

COVID-19 (coronavirus) financial help for individuals - Government updates announced July 2020

 


COVID financial assistance announced July 2020

Updated 7 August 2020

Coronavirus continues to wreak havoc on the economy. Many people have lost jobs and are facing financial ruin. This article explains the recent (July 2020) updates to the Federal Government’s changes which are aimed at making life a little bit easier for individuals. As things change, we will continue to update this page. 

You can read our previous article about the financial assistance available up to 23 September 2020 here. This article references new payment figures which will be in place from late September 2020.

Here’s a snapshot of some of the financial help available:

  • Superannuation income protection and TPD insurance
  • Superannuation early access up to $10,000
  • Stimulus package – cash payments
  • JobKeeper
  • Coronavirus supplements for welfare recipients

Superannuation – Insurance

Most people have insurance attached to their superannuation account. If you can’t work because of a medical condition, you might be entitled to income protection benefits, or total and permanent disability (TPD) benefits.

Need help accessing TPD or
income protection insurance?
Call now for FREE advice:
03 9448 8048

Income protection benefits pay you a monthly amount, and the benefits can be payable for 2 years, 5 years or to age 65 (and rarely, but sometimes, payable for the rest of your life).

A TPD benefit is a lump sum paid through your superannuation fund and can often be a 6-figure lump sum that can provide significant financial benefit if you’re no longer able to work.

 

Superannuation – early access to up to $10,000

The Federal Government has announced that eligible individuals can access up to $10,000 of their super due to COVID-19 conditions. The time to make the first withdrawal has already passed, but there is still time to make the second withdrawal.

The second withdrawal must be applied for before 31 December 2020. This time has recently been extended from the initial deadline of 24 September 2020.

To be eligible, you must meet one of the following criteria: 

  1. You are unemployed;
  2. You are eligible to receive:
    1. Job Seeker Payment;
    2. Youth Allowance;
    3. Parenting payment (partnered and single);
    4. Special Benefit or Farm Household Allowance.
  3. On or after 1 January 2020 you were made redundant;
  4. On or after 1 January 2020 your working hours were reduced by 20% or more;
  5. If you’re a sole trader, your business was suspended or there was a reduction in turnover of 20% or more.

Accessing super now, when the economic markets have dropped very significantly can mean that you’re locking in some losses. You should think carefully before accessing super, and if you need, obtain financial advice.

Importantly, only citizens of Australia and New Zealand are able to apply to withdraw money under this ground of release.

How to apply

If you want to apply for the early release of super, the easiest way is to apply through your MyGov account.

How do I receive the money?

Under the new rules, once the ATO has determined you’re entitled to the early release, the super fund must pay the monies to you as soon as practicable.

The super fund isn’t allowed to ask for more documents. Any monies released under these provisions will be tax-free.

Stimulus - cash payments for eligible individuals

Previously, the government announced that they would make two payments of $750 to social security, veteran and income support recipients and eligible concession card holders. Both of these stimulus payments have now been made and the Government has not announced that any further lump sum stimulus payments will be made.

JobKeeper Payment

The Federal Government has announced an extension of the JobKeeper Payments. Under the initial package, JobKeeper payments were to stop being paid on 27 September 2020. However, the Government has recently announced that JobKeeper payments will continue to be paid as follows:

  • From 28 September 2020 to 3 January 2021: at a reduced rate of $750 a fortnight for those employees working fewer than 20 hours per week and $1,200 a fortnight for those working greater than 20 hours per week.
  • 4 January 2021 to 28 March 2021: at a reduced rate of $650 a fortnight for those employees working fewer than 20 hours per week and $1,000 a fortnight for those working greater than 20 hours per week.

As was the case previously, an eligible employer is a business (including sole-trader), who meets the following criteria:

  • A turnover of less than $1bn and who have lost 30% or more of their revenue.
  • A turnover of $1bn or more and with at least a 50% reduction in revenue.

Not for profits or charities must only show a 15% reduction in revenue.

One change regarding the eligibility criteria is that it must now be shown compared to the preceding quarter, not over the previous year (as was the case prior to 7 August 2020). For example, for ongoing payments between 28 September 2020 and 4 January 2021, businesses (including charities and not-for-profits) will be required to show this decline in revenue by comparing their GST turnover in the September quarter of 2020 to the June quarter of 2020. If there has been a drop in September compared to June 2020 they will be entitled to ongoing JobKeeker payments.

For ongoing payments between 4 January 2021 and 28 March 2021, businesses (including charities and not-for-profits) will again need to demonstrate their eligibility by showing GST turnover declines in the December quarter of 2020 compared to the September quarter of 2020.

Beyond 27 September 2020, the requirements regarding an eligible employee remain unchanged. In summary, and eligible employee is still an employee who:

  • was employed by an eligible employer at 1 March 2020;
  • was any of a sole trader, permanent full-time employee, part-time employee, or long-term casuals employed on a regular basis for longer than 12 months as at 1 March 2020;
  • is at least 16 years of age;
  • is an Australian citizen, the holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continually in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) visa.

If a person receives the JobKeeper payment, they are not entitled to also receive the JobSeeker payment (see below).

An important part of the JobKeeper payment is that it keeps employees connected to employers so, hopefully once the economy starts to improve, employees will be able to return to their previous role and normal life will continue.

Businesses (including charities and not for profits) who were not previously entitled to JobKeeper payments, can still apply now and after 27 September 2020, provided they meet the above eligibility requirements and additional turnover test which have been put in place after 27 September 2020.

Coronavirus Supplement

As with the JobKeeper payments, the Federal Government has also announced an extension of the Coronavirus supplement at reduced rates.

The coronavirus supplement will be paid at the current rate of $550 per fortnight to eligible individuals up until 24 September 2020. From 25 September 2020 until 31 December 2020, the coronavirus supplement will be paid at the reduced rate of $250 per fortnight.

The Coronavirus supplement is payable for people who are in receipt of the following payments:

  • Job Seeker Payment
  • Youth Allowance Jobseeker
  • Parenting Payment (partnered and single)
  • Farm Household Allowance
  • Special Benefit

Importantly, the asset threshold which the Federal Government removed from considerations of eligibility for many payments up until 24 September 2020, will be reintroduced for both existing and new recipients after this time.

However, between 25 September and 31 December 2020, the income threshold for those people that are in receipt of the JobSeeker payments and Youth Allowance will be relaxed. This will allow people to do more paid work before their JobSeeker and Youth Allowance payments are affected.

Are you still entitled to JobSeeker payments if you were “stood down”?

We have seen some confusion about whether you have to be “unemployed” to be entitled to the JobSeeker payment. That is, if you’re still “on the books” but not getting paid because there is no work, can you still claim the JobSeeker payment?

The answer is if you’ve been stood down, you ARE entitled to apply for the JobSeeker payment even if you’re technically still employed.

Under the Social Security Guides, a person who is on unpaid leave can be considered unemployed if they are not able to resume their employment and they are willing to look for suitable work. 

So, if you’re unemployed or you’ve been stood down you should notify Centrelink of your intention to claim the JobSeeker payment as soon as possible.

Applying for Centrelink benefits

To apply for Centrelink benefits you can now lodge a Notice of Intent to claim online.

Log onto your MyGov account and click the ‘Intent to Claim’ button.

Centrelink will then contact you for any further information to enable them to process the claim; e.g. proof of income etc.

If successful, you will get payments backdated to when you lodged the notice.

Sickness Allowance replaced by Job Seeker Payment

Note: from 20 March 2020 the Sickness Allowance is no longer available to new entrants and has instead been replaced by the Job Seeker Payment.

If you are a current Sickness Allowance recipient, you remain entitled to the coronavirus supplement.

In addition to the amounts referred to above, there are many other entitlements which will apply to small business.

Contact us for help

Phone

Melbourne: 03 9448 8048

Brisbane: 07 3013 4300

Anywhere else in Australia:  03 9448 8048

Email

[email protected]


Share this page...

Get in touch


 
  [email protected]

or fill out the form below...