Government Stimulus Package in response to the Coronavirus
The Government’s stimulus package in response to the economic impact of the Coronavirus is now in law. The package includes a suite of measures that provide superannuation, social security, tax and other relief for individuals and businesses. The following are some of the key changes:
Superannuation – New condition of release: compassionate ground – coronavirus
The new condition of release: compassionate ground – coronavirus – allows limited access to preserved and restricted non-preserved benefits to assist with the adverse economic impacts from the virus.
To be eligible, the person must meet any one of the following at the time the application is lodged:
- eligible to receive any of the following income support payments
– Jobseeker Payment
– Parenting Payment
– Special Benefit
- eligible to receive Youth Allowance (excluding those receiving this payment as undertaking full-time study or is a new apprentice)
- has been made redundant on or after 1 January 2020 or their usual working hours have reduced by 20% or more, or
- a sole trader who on or after 1 January 2020 had their business suspended or suffered a reduction in turnover of 20% or more (compared to turnover prior to this date).
An individual can make 2 applications, one in the 2019/2020 financial year and one in the 2020/2021 financial year, with each application limited a maximum of $10,000.
Minimum pension drawdown reduction
The minimum pension draw-downs are halved for the 2019/20 and 2020/21 financial years. By reducing the pension amount, it may provide the opportunity to retain more inside superannuation and retain assets rather than realise losses at this time.
If an individual has elected for all annual payments to align with the legislated minimums, it will be important to ensure that are changes to the nominated pension payment are discussed and communicated to whoever manages the fund.
|Age||Minimum Pension Payments
|Minimum Pension Payments
|Less than 65||4%||2%|
Social Security – $750 Economic Support payments
Eligible income support recipients and concession card holders may be entitled to either one or two separate Economic Support payments of $750 each, which are received tax-free and not income for social security purposes.
To be eligible to receive the first payment, on a day between 12 March and 13 April 2020 inclusive, an individual must:
- reside in Australia, and
- receive an eligible income support payment or qualify for an eligible concession card
The first payment is expected to be automatically paid to eligible recipients from 31 March 2020. Eligibility for the second payment is determined on 10 July 2020 with the same requirements, and is expected to be automatically paid to eligible recipients from 31 March 2020.
A new Coronavirus Supplement of $550 per fortnight will be paid to new and existing recipients of:
- JobSeeker Payment
- Youth Allowance
- Parenting Payment
- Sickness Allowance
- Widow Allowance
- Farm Household Allowance
- Special Benefit
The supplement will be paid for an initial period of six months, which may be extended by
the Minister. It will be paid automatically with the person’s ordinary fortnightly entitlement from 27 April 2020. Recipients of the above payments eligible for the Coronavirus Supplement on 10 July 2020 are not eligible for the second $750 one-off payment.
For more information on eligibility requirements and other new measures as part of the Government’s stimulus package, please visit Treasury fact sheets.