Jobseekers & Social Security Support
The Corona Virus Supplement
Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit will receive income support payments via a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight.
The Corona Virus Supplement will be paid for the next 6 months and is in addition to the current payment each fortnight for eligible income support recipients.
Sole traders and casual workers who are currently making less than $1,075 a fortnight will be eligible to receive the full supplement.
The Government has increased the previously announced $750 household support payment to 2 separate payments of $750.
The original payment of $750 will be paid from 31 March 2020 and will be paid to people who have been on eligible payments between 12 March 2020 and 13 April 2020. Eligible payments are included in the table below.
The second payment of $750 will be paid from 13 July 2020 and will be paid people who are in receipt of one of the eligible payments per the table below. There is an exception to this: if you have received the corona virus supplement you will not be eligible for the second payment.
Superannuation & Pension Concessions
Temporary Reduction in Minimum Drawdown Requirements
This measure is aimed at providing pensioners with more flexibility at managing their superannuation assets during this period.
The Government has announced that the minimum pension requirements for 2019/20 and 2020/21 will be re-set to half the normal rates. The revised rates for the 2019/20 and 2020/21 years will be as follows:
Changes to Social Security Deeming Rates
The Government will also reduce the pensioner deeming rates for financial investments from 1 May 2020 by 0.75%. The new rates are included in the table below.
This will provide an increase in social security benefits if you are assessed under the income test.
While deeming rates are not explicitly linked to the RBA cash rate, this latest change is largely triggered by the RBA’s decision to announce further interest rate cuts last week. The policy logic is that pensioners may well see their incomes decline and hence lower income levels from investments should be factored in when calculating their age pension and other social security benefits.
Temporary Early Access to Superannuation
As a general rule, preserved superannuation benefits may only be accessed in lump sum form once members turn 65 or reach their preservation age and retire (or satisfy some other condition of release such as permanent incapacity, terminal illness etc). However, in times of financial distress, there are some circumstances under which members may be able to bypass these rules and access their super earlier.
Unfortunately, the current rules which allow access to those suffering from “severe financial hardship” or qualify on “compassionate grounds” are very narrow and release has only been available under very limited circumstances.
The Government has announced a quite significant, but temporary, extension to these rules.
Who is eligible for the new rules?
A new opportunity for early release will be available to individuals who:
- are unemployed, or
- are eligible to receive a Job Seeker Payment (previously known as Newstart Allowance), youth allowance for job seekers, parenting payment, special benefit or Farm Household Allowance, or
on or after 1 January 2020:
- were made redundant, or
- had their working hours reduced by 20% or more, or
- for sole traders, their business was suspended or there was a reduction in their turnover of 20% or more.
Further information is needed in relation to how this 20% reduction is to be determined, but it appears it will be by comparing current hours/turnover with the average for the period 1 July 2019 to 31 December 2019.
Importantly, there is no requirement that the individual is already receiving Commonwealth income support payments and there is no waiting period. The payment can be requested immediately once the new rules come into effect (see below).
There are no income or assets tests. Even someone with a very high salary who remains employed and has other assets could access this payment as long as their salary has been reduced by 20% after 1 January 2020. While they might choose not to, many could well do so if their superannuation is more easily accessed in cash than other assets and if their reduced income is not sufficient to meet living costs that cannot be adjusted quickly to reflect their new situation (eg large mortgage payments, rent etc).
How much will be available?
Eligible individuals will be able to access up to $10,000 before 1 July 2020. A further amount of up to $10,000 will be available from 1 July 2020 but only for approximately three months after that time (exact timing to depend on the passage of legislation).
Only one payment will be permitted in each financial year.