The Government’s initial support measures were estimated to be around $259 billion1 — that’s equivalent to around 13.3 per cent of annual GDP. By global standards, and on a per head basis, this was an exceptionally large government response.
JobKeeper to support employees
One of the most high-profile support schemes is JobKeeper.
JobKeeper gives businesses significantly affected by the Coronavirus crisis a subsidy to help them continue paying employees. This means employees can keep their job and earn an income—even if their hours have been cut.
Under the JobKeeper program, eligible employees (and the self-employed) receive $1,500 each fortnight, up to 27 September 2020.
After this date, JobKeeper payments will continue until 28 March 2021 but the payment amount will reduce over time and be paid at two rates. The two rates relate to whether you’re considered to be a full-time or part-time worker for this purpose, and is intended to be determined based on the hours you worked in the applicable test period. Depending on your circumstances, this test period will be either February or June 2020. Full-time workers are those who have worked 20 hours or more in the applicable test period.
From 28 September 2020 to 3 January 2021:
- the payment rate will fall to $1,200 each fortnight for full-time employees, and
- $750 each fortnight for part-time employees.
From 4 January 2021 to 28 March 2021, the JobKeeper payment rate will be:
- $1,000 each fortnight for full-time employees.
- The rate for part-time employees will fall to $650 each fortnight over this period
For more information, visit the Treasury website.
The Government expects the expanded JobKeeper program will bring the total estimated costs of the program to about $86 billion.
The Government has temporarily expanded eligibility for income support payments including JobSeeker.
You may be eligible for a JobSeeker payment if you’re:
- a permanent employee and have lost your job
- a sole trader, self-employed, a casual or contact worker and your income has reduced
- caring for someone who’s affected by coronavirus.
In addition, the Coronavirus Supplement of $550 per fortnight is available until 24 September 2020, after which it will reduce to $250 per fortnight and continue to be paid until 31 December 2020.
You will be paid the Coronavirus Supplement if you receive an eligible social security payment or benefit including:
- JobSeeker Payment
- Youth Allowance
- Parenting Payment (Partnered or Single)
- ABSTUDY (Living Allowance)
- Farm Household Allowance
- Special Benefit or Department of Veteran's Affairs Education Scheme, and
- New Enterprise Incentive Scheme participants.
People who meet certain eligibility rules can request an early release of up to $10,000 from super from 1 July 2020, which represents the second stage of the early release of super program.
Originally, applications for a lump sum in the current financial year needed to be submitted by 24 September but the Government has extended this date to 31 December 2020. You’ll need to apply for the release online via MyGov at my.gov.au
For many retirees, the significant losses in financial markets as a result of the COVID-19 crisis are having a negative effect on the account balance of their superannuation pension or annuity.
To assist retirees, the Government has reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50% in the 2019–20 and the 2020–21 financial years.
You can find out more about the Government’s support packages for individuals and households here.
If you want to discuss withdrawing a lump sum from your super under the new temporary financial hardship – Coronavirus condition of release, we suggest you speak to a financial adviser. It may have implications for your retirement lifestyle down the track.
For more information on the super withdrawal rules, see the Government’s outline.