Posted 03.04.2020 in Industry Updates
The support and stimulus payments are designed to help Australians who fall on hard times, and businesses, whose objective it is to weather the storm. While the scale of the support is extraordinary, the consensus from commentators is that it is well targeted, timely, and necessary.
In this brief summary we outline the key aspects of the support package. If you, or any member of your family needs further help in understanding the benefits, please call your adviser.
The stimulus package focuses on three main economic targets:
Corona Virus Supplement
Individuals unable to work as a result of Covid-19, are eligible for temporary income support in the form of Coronavirus Supplement payments. These payments are an extension of existing benefits and are available for anyone eligible for the following benefits.
The Corona Virus supplement is $550 per fortnight in addition to the above payment. All income support payments have been made more accessible by removing waiting periods and temporarily waiving the assets test.
The Jobseeker payment and Youth Allowance will be accessible to all permanent employees stood down as well as sole traders, self-employed, casual and contract workers who meet the income tests as a result of the economic downturn. This will enable many more Australians to access to the supplement payments.
Two separate $750 payments are planned to be made by the government, the first on 14th April (First Economic Support Payment) and the second round (Second Economic Support Payment) in July.
These payments will be made to eligible households receiving government assistance or those eligible for a government concession card.
How do I claim?
If you have been impacted by the economic effects of Covid-19 you may eligible for government assistance. To apply:
If you are having trouble online, you can call 132 850 to have the benefit established. For more information visit this site.
The effects on small and medium businesses all over Australia have been hard and fast, as the flow on effects of Covid-19 continue. In response, the government has introduced a wage subsidy program known as the JobKeeper Subsidy, designed to help businesses retain and continue to pay staff during the economic impact of Covid-19. The benefit will be available for businesses and the self-employed where turnover has reduced by 30% or more. Business owners can register here.
The Government has also introduced a range of measures to assist small and medium business whose cash flow is disrupted due to the impact of Covid-19.
Small and Medium Business Enterprises will gain access to the Coronavirus SME Guarantee Scheme whereby the government will provide a guarantee of 50% for unsecured loans to be used for working capital.
The criteria to gain access to the scheme:
The scheme is expected to become available within the next two weeks and be available for new loans until 30 September 2020.
Small Businesses will now enjoy a six-month exemption of the responsible lending obligations, to help support the flow of credit to these businesses with relative efficiency in these difficult times.
The Government has also announced a raft of temporary changes to superannuation to help those in need as a result of the impacts of Covid-19. The changes largely effect two groups of people, accumulators and retirees, which we have summarised below.
We believe this is a last resort only to be accessed in the case of severe financial hardship. Selling assets when markets have been severely impacted leads to significantly poorer long-term outcomes.
Many clients are required to take pension payments in excess of what’s required to fund their lifestyle.
If you are receiving pension surplus payments to your needs, you can reduce your pension payments to preserve capital. If you would like to have the changes in place for your next upcoming pension payment, we would encourage you to contact us prior to the 10th of April 2020.