The coronavirus outbreak has caused some major disruption to our lives. We understand that many families are having to adjust to a new way of living in the current environment, and a lot of Australian employees and businesses have been affected.
At SBA, we are continuing to work for our clients remotely. We are also embracing technology more to ensure that we can continue to “meet” with our clients virtually on an ongoing basis.
If you have any concerns with the current situation at hand, please rest assured that all staff are here to assist at all times.
The Australian Government recently announced its economic support package to help Australians who are under financial stress as a result of the Coronavirus.
Two of the support measures announced include the early release of superannuation for those financially affected by the Coronavirus and temporarily reducing minimum pension payment requirements for retirees.
Below is some information regarding some of the support measures available to assist you. Please contact us to discuss your personal circumstances in detail.
EARLY RELEASE OF SUPER
From mid-April (subject to legislation), eligible Australians will be able to withdraw up to $10,000 of their superannuation in 2019-20, plus a further $10,000 in 2020-21. These payments are tax-free and will not affect any Centrelink or Veterans’ Affairs payments you receive.
Members will be required to apply directly to the ATO, rather than through their super fund.
For more information, you can read the Government’s Fact Sheet.
Am I eligible?
To apply for early release of your super, you must satisfy any one or more of the following requirements:
* you are unemployed; or
* you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
* on or after 1 January 2020:
* you were made redundant; or
* your working hours were reduced by 20% or more; or
* if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.
How much of my super can I withdraw?
* Those eligible can apply to access up to $10,000 of their superannuation before 1 July 2020.
* They will also be able to access up to a further $10,000 from 1 July 2020 for approximately 3
months, depending on exact timing of passage of legislation.
How do I apply?
* You will be able to apply for early release of your superannuation from mid-April 2020.
* If you are eligible, you must apply directly to the Australian Taxation Office (ATO) through the myGov website, www.my.gov.au. You are not required to apply through your super fund.
* The ATO will issue you with a determination and, if you’re successful, direct your super fund to release your super payment.
* Your fund will then make the payment to your nominated bank account.
PROPOSED JOB KEEPER PAYMENT
The Federal Government has announced (as part of its Coronavirus Stimulus Package) the introduction of a new JobKeeper Payment to assist eligible employers (and self-employed individuals) who have been impacted by the Coronavirus pandemic to continue to pay their workers. The JobKeeper payment is a subsidy that will be paid through the tax system(i.e., by applying tothe ATO) to eligible employers (and self-employedindividuals)impacted by the Coronavirus. Eligible employers will be able to claim a subsidy of $1,500 per fortnight, per eligible employee,from 30 March 2020 (with payments commencing from the first week of May 2020), for a maximum period of six months. This subsidy will be paid by the ATO monthly in arrears and will ensure that an eligible employee receives a gross payment (i.e., before tax) of at least $1,500 per fortnight.
Self-employed individuals (i.e.,businesses without employees)can also qualify to receive the JobKeeper Payment. There are certain conditions that need to be met when considering applying for a JobSeeker Payment. Businesses can start to register their interest in applying for the JobKeeper payment from 30 March 2020, on the ATO’s website: https://www.ato.gov.au/general/gen/JobKeeper-payment/.
The first payments under this measure are expected to be made to an eligible business from the first week of May 2020.
For more information, visit the ATO website, or speak to our advisers around eligibility or assistance.
TEMPORARY REDUCTION OF MINIMUM PENSION PAYMENTS
To provide retirees with more flexibility in managing their retirement incomes, the Government has announced it is reducing the minimum pension payment requirement for account based pensions and similar products by 50% in both 2019-20 and 2020-21.
WHO IS ELIGIBLE?
All account based pension holders.
Minimum percentages are calculated on account balance at commencement of pension and at start of each subsequent financial year.
AGE PENSION – DEEMING RATES
The Government is reducing the deeming rates by a further 0.25 percentage points on top of the already announced 0.5% reduction to reflect the latest cash rate reductions by the RBA.
As a result, the lower deeming rate will be 0.25% and the upper deeming rate will be 2.25%. The Government will automatically apply the lower rates from 1 May 2020, with any increased Age Pension entitlements paid from that date.
WHERE CAN I FIND MORE INFORMATION?
You can read more in this Government factsheet.
Be aware of scams involving Coronavirus. Visit the Stay Smart Online website for information about Coronavirus scams and how to stay safe. 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.
To learn more about these measures, you can read the Australian Government’s announcement. Legislation is required to be enacted to permit these measures and we will continue to keep you updated.