Update – Coronavirus Support Package

CORONAVIRUS SUPPORT PACKAGE

Support for Individuals and Households

Coronavirus Supplement

• There will be a temporary change to eligible income support payments by the addition of a Coronavirus Supplement of $550 per fortnight. The supplement will be paid to both existing and new income recipients.
• The supplement will be paid for 6 months and will commence from 27 April 2020.
• The income support categories are Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit recipients.
• Asset testing for Jobseeker, Youth Allowance and Parenting Payment will be waived for the period of the supplement but income testing will still apply as per current arrangements.
• The one week ordinary waiting period has been waived.
• If you are already in receipt of employer entitlements such as annual or sick leave, or receiving income protection insurance then you will not be eligible for the supplement.

Claiming The Supplement

• Services Australia (formerly the Department of Human Services) are encouraging new applicants to register through their MyGov account, then call to verify their identity and receive a link to their Centrelink online account.
• All existing income recipients do not need to do anything. Their supplement will automatically be paid to them.
• Applicants can also be assessed for Rent Assistance.

Social Security Support Payments

• There will be two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders.
• The first payment will be available to people who are eligible payment recipients and concession card holders at any time from 12 March 2020 to 13 April 2020.
• The second payment will be available to people who are eligible payment recipients and concession card holders on 10 July 2020, other than those who are receiving the Coronavirus Supplement.

Claiming The $750 Payments

• All existing income recipients and concession card holders do not need to do anything. The payments will be made automatically.
• The first payment will be made from 31 March 2020.
• The second payment will be made from 13 July 2020.

Early Access to Superannuation

• Eligible individuals will be able to apply for the early release of their superannuation of up to $10,000 before 30 June 2020, and up to a further $10,000 from 1 July 2020 for approximately three months.
• To be eligible, you must satisfy one of the following requirements:
  • you are unemployed; or
  • you are eligible to receive a Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Special Benefit or  Farm Household Allowance; or
  • on or after 1 January 2020 you were made redundant, or your working hours reduced by more than 20% or if you are a sole trader there was a reduction in your turnover of more than 20%.
• The amounts will be tax free and will not affect any income support benefits.

Applying for Early Access to Superannuation

• Applications are expected to be open from mid-April 2020.
• If you are eligible, you can apply online to the ATO through your MyGov account. They will forward a release authority to your superannuation fund for payment.
• Only contact your superannuation fund if you need to update your contact and bank details.
• Separate arrangements will apply to members of Self Managed Super Funds. The ATO will release further details later.

Temporary Reduction in Minimum Pension Drawdown Rate

The minimum drawdown requirements for Account Based Pensions and similar products will be halved for both the 2019-20 and 2020-21 financial years as follows:

AGE	CURRENT MINIMUM %	NEW REDUCED MINIMUM % FOR 2019-20 AND 2020-21
Under 65	4	2
65-74	5	2.5
75-79	6	3
80-84	7	3.5
85-89	9	4.5
90-94	11	5.5
95 or more	14	7

Changes to Social Security Deeming Rates

From 1 May 2020, the upper deeming rate will reduce further to 2.25% and the lower deeming rate will reduce to 0.25%. This is expected to benefit around 900,000 income support recipients including around 565,000 on the Age Pension who will see their fortnightly pensions increase.

Cash Flow Assistance for Businesses

The Government is enhancing the measures it announced on 12 March 2020 for small to medium business and not-for-profits that employ people. The payments are designed to help businesses with their cash flow so that they can keep operating and retain staff.

Under the enhanced scheme, employers will receive a payment of 100% of the tax they withheld from salaries and wages in the March and June 2020 quarters, with a maximum payment of $50,000 and a minimum of $10,000.

In addition a further payment is being made from July to October that will see businesses receive an additional payment equal to the total of the payments they have received above.

So, over the March and June quarters, if an employer withholds less than $10,000, they will receive a total payment of $20,000, and if an employer withholds more than $50,000, they will receive a maximum of $100,000 in payments.

Timing of the Payments

The payments will be applied as a credit to the activity statement lodgements and where a refund applies, they will be made within 14 days.

• Quarterly lodgers will receive the payments when they lodge the quarterly activity statements for March 2020, June 2020 and September 2020.
• Monthly lodgers will receive the payments when they lodge the monthly activity statements for March, April, May, June, July, August and September 2020,

Warning

The payments will only be available to active employers established prior to 12 March 2020 with the exception of registered charities (allowing for those that may have been established in response to the Coronavirus pandemic).

The legislation also allows for a special integrity rule whereby if an entity or their agent artificially contrives a scheme where the dominant purpose is to become eligible for a payment or to increase a payment, then that entity will not be eligible.

Apprentices and Trainees

• A wage subsidy (for employers employing less than 20 employees) of 50% of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a business is unable to retain an apprentice, the subsidy will also be available to the apprentice’s new employer.
• The apprentice or trainee must have been in training with a small business as at 1 March 2020.
• Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
• Employers can register for the subsidy from 2 April 2020 and final claims for payment must be lodged by 31 December 2020.
• Further information is available from the Australian Apprenticeships website at: www.australianapprenticeships.gov.au

Increasing the Instant Asset Write Off

• From Thursday 12 March 2020, the instant asset write-off threshold has been increased from $30,000 to $150,000 for businesses with an aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
• A time-limited 15 month investment incentive until 30 June 2021 that will allow accelerated depreciation deductions. A business with a turnover of less that $500 million will be able to deduct 50% of the cost of a new eligible asset on installation with existing depreciation rules applying to the balance of the asset’s cost.

Other Measures

• The Government has set aside $1 billion to support regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus. In particular those industries heavily reliant on tourism, agriculture and education with specific support for the airline industry.
• Changes to the personal insolvency system to allow more time and higher thresholds before demands from creditors can be made.
• Temporary relief from directors’ personal liability for trading while insolvent.
• Supporting the flow of credit to encourage lenders to provide quick and efficient access to credit for small businesses