Create the life you want
New Government Safety Nets to Support Most Australians – Quick Client Summary.
We hope you and your families are all well and finding the quarantine experience an interesting and positive one so far!
We have provided a summary designed to help simplify the various Government support measures currently being rolled out. Given we are not through the pandemic as yet, we expect there will be more to follow. We’ll update you if and when any further announcements are made.
Child Care
- Free child care for all parents going to work, looking for work or studying for 6 months.
Deferral of Home Mortgage Interest
- Government money injections to banks allows them to offer you a 6 month interest deferral.
- This is not a gift of free interest. Interest is pushed out and simply payable at a later date – your loan term will be extended.
- Contact your bank to discuss, if this helps alleviate your current cashflow strain.
Small business owners
- A tax-free cash payment of up to $100,000 to help small business to retain staff and keep operating.
- Employers will receive a rebate of all PAYG withheld on wages up to a total of $50,000 across the March – June quarter activity statements. An additional payment of up to $50,000 will then be made in the July to September quarter.
- Eligible businesses that pay salary and wages will receive a minimum payment of $10,000 even if they are not required to withhold tax.
- The important cashflow implication is that you will only receive a cash payment to the extent that the rebate reduces your ATO account into refund territory. Where you have existing tax debts or where the GST component of your activity statements are larger than the rebate, you will not receive a cash refund.
- Increasing the instant asset write-off to purchases up to $150,000.
- Government payment of 50% of the wages for a trainee or apprentice until 30 September.
- Government Guaranteed easier-to-get business loans at cheap rates for small business.
Additional Income Support for workers (phase 1)
- Those affected have access to the normal income support payments and also an additional Coronavirus supplement payment of $550 per fortnight.
- This applies to: Permanent employees who are stood down or lose their employment, Sole traders, casual and contract workers whose income has been affected by the economic downturn due to the Coronavirus or those required to care for someone who is affected by the Coronavirus.
Additional Income Support for workers (phase 2) – the new JobKeeper Payment
- The Federal Government wants to give out $1500/fortnight for 6 months via their employer to all Australians who have lost their jobs or been stood down. We will update you of final details as Parliament has now passed the legislation – stay tuned!
Allocated Pensions (your Super that is now paying you an income)
- To preserve your wealth you now have the option to reduce the minimum pension payment requirement for account based pensions by 50% in both 2019-2020 and 2020-2021 financial years.
- Superfunds will be able to administrate these changes by around mid – late April.
- Your current pension payments will continue unchanged unless you change them
- We urge you to give some thought as to whether you can reduce your pension income for a while in order to preserve your capital longer.
- We also encourage any lumpsum withdrawals to be deferred where possible until markets recover.
Centrelink Pensions
- If you are already on the maximum Centrelink Pension you don’t need to do anything.
- From 1 May 2020, deeming rates will be reduced which will increase the pension for many of our clients.
- Centrelink automatically checks account balances & valuations every March & September to determine the rate of pension. We recommend updating Centrelink yourself now in order to bring forward any increase in pension. If you have increased or decreased your assets or income yourself (withdrawals, inheritances received, new paid work, etc) you will need to complete an ‘assets & income’ form and submit to Centrelink.
- If you just want to forward them updated details about your existing Allocated Pension (and there are no other changes to your assets or income) then email us to send you a Centrelink Schedule that you can upload to the MyGov website. They normally take 3 months to action changes. The wait time could be even longer given the extensive Government initiatives currently being rolled out.
- If you are eligible for Centrelink support, you would have already received the first of 2 x $750 cash payments from the Government as part of their stimulus package. The next one is coming soon after 13 July.
Life Insurance
- Most life insurers will cover you for any health issues related to Coronavirus for existing policies. It is typically only new policies that may have Coronavirus exclusions and we are talking to those who might be affected by this. We are yet to have any of our clients impacted by a Coronavirus exclusion in relation to their new insurance policy by way of exclusion.
- Please refer to your insurer’s Product Disclosure Statement for the relevant wording around ‘pandemics’. Email us if you need one sent to you.
- Contact us immediately if your health is severely impacted and you want to consider making a claim.
Access to Superannuation – Severe Hardship
- From late April, those who are affected by the Coronavirus can apply to access up to $10,000 from their superannuation prior to 30 June 2020 (and an additional $10,000 from 1 July 2020). These payments will be tax free to the recipient.
- Access is for limited cases only.
- Speak to us to consider your options – this option should be considered a last resort.
- Applications must be made through your my.Gov online account to the ATO.
Coronavirus Scams
- Unfortunately, scammers are taking advantage of the spread of coronavirus to exploit and play on the fears of consumers across Australia.
- If you think you have been scammed, you can make a report on the Scamwatch website, and find more information about where to get help
