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Coronavirus - Government support for retirees, individuals and households

Written and accurate as at: Mar 31, 2020 Current Stats & Facts

The Government has announced measures to assist Australians, including stood down, unemployed, recently made redundant, sole traders and employees who have had their hours reduced by 20% and pensioners including eligible concession cardholders.

Income support for individuals

Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit. This Treasury fact sheet provides critical information.

Announced on 30 March, the JobKeeper Payment is for employees of businesses impacted by the coronavirus. The payment will provide eligible employees with $1,500 per fortnight pre-tax, for a maximum of 6 months. The Government is expecting to support 6 million Australians with the JobKeeper Payment package. 

Australian citizens and various visa holder employees will be eligible for the JobKeeper Payment if they are a full time or part-time employee (including stood down employees), or if they are casual employees with a 12-month employment relationship. 

Below is a brief summary of the different payment categories:

  • If the employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to the prevailing workplace arrangements. The JobKeeper
    Payments will subsidise part or all of their income. 
  • If the employee ordinarily receives less than $1,500 in income per fortnight before tax, the employer must pay, at a minimum, $1,500 per fortnight, before tax. 
  • If the employee has been stood down, the employer must pay them, at a minimum, $1,500 per fortnight,
    before tax. 
  • If the employee was employed on 1 March 2020, and subsequently ceased employment and then were re-engaged by the same eligible employer, they will receive, at a minimum, $1,500 per fortnight, before tax. 

In summary, eligible employees will receive a minimum of $1,500 per fortnight, before tax. It will be up to the employer if they want to pay superannuation on any additional wage paid over the JobKeeper Payments.

Check with your employer about eligibility. The package details can be found in this fact sheet provided by Treasury.   

Payments to support households

The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession cardholders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020. Around half of those that benefit are pensioners. These payments will help to support confidence and domestic demand in the economy. The second payment will not be made to those eligible for the Coronavirus supplement.

Recognising that many Australians have saved over their lives to support themselves in retirement, the Government is implementing two measures to support retirees in managing the impact of recent volatility in financial markets and the impact of low-interest rates on their retirement savings. For more information refer to this Treasury fact sheet

Temporary early release of superannuation

The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments. 

To be eligible you must be unemployed, were made redundant, your working hours have been reduced by 20 per cent or more (including sole traders if their business was suspended or there was a reduction in turnover of 20 per cent or more). Treasury released this fact sheet for further information. 

Temporarily reducing superannuation minimum drawdown rates

The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees with account-based pensions and similar products by reducing the need to sell investment assets to fund minimum drawdown requirements. For more information refer to this fact sheet provided by Treasury.

Reducing social security deeming rates

On 12 March, the Government announced a 0.5 percentage point reduction in both the upper and lower social security deeming rates. The Government will now reduce these rates by another 0.25 percentage points.  As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent. The reductions reflect the low-interest-rate environment and its impact on the income from savings. The 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. This Treasury fact sheet provides further information. 

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