In the wake of the COVID-19 pandemic many Australians are currently facing severe financial hardship due to loss of employment or income. Therefore, the Australian Government has responded with two rounds of coronavirus stimulus for individuals.
The first announcement on 12 March included a $17.6 billion stimulus package for individuals and businesses. The second announcement, on 23 March, reflected the escalation of the pandemic with a stimulus package of $66 billion.
Here’s a detailed guide about how the stimulus package helps individuals. To find out how these packages help small businesses read our small business coronavirus stimulus package guide.
What is included in the coronavirus stimulus for individuals?
First Announcement – $17.6 billion
The announcement includes cash payments for welfare recipients to encourage spending.
- Welfare recipients receive an extra $750 per person. It applies to everyone on the following payments and those who made a claim for one of the eligible payments by March 12.
- Jobseeker Payment (Newstart Allowance)
- The disability support pension
- Carers’ allowance
- Youth allowance
- Veterans support payments
- Family tax benefits
- The Commonwealth senior health card-holders
- Aged pensioners
- Pensioners benefit from a cut to deeming rates as well as a halving of the minimum superannuation drawdown rate.
Second Announcement – $66 billion
An additional coronavirus stimulus package for individuals to protect from loss of income due to unemployment arrived on 23 March. These payments allow individuals to receive income while unemployed and bridge the gap until they find a new job.
- Casuals and sole traders will have access a “coronavirus supplement” of $550 a fortnight for the next six months.
- Households may be eligible for a second $750 payment. This is an automatic payment in addition to the first $750 payment issued in the first announcement.
- Pensioners will benefit from a further cut to deeming rates.
- A temporary change to superannuation rules to allow an early release of superannuation to Australians of working age.
Third Announcement – $130 billion
Finally, the 30 March package announced the JobKeeper Payment. This payment allows eligible businesses to pay staff $1,500 a fortnight for up to six months.
The ATO pays the JobKeeper payment to eligible businesses who then pay their staff in a similar way to their weekly wages.
Talk to your ex-employer if you lost your job due to COVID-19. If eligible they could add you back to their books and help you receive the JobKeeper Payment.
Stimulus Package Details: Temporary early releases of superannuation
Individuals affected by the Coronavirus can access up to $10,000 of their superannuation in 2019-20 and $10,000 in 2020-21. Importantly, individuals don’t need to pay tax on any amounts released. Additionally, the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Eligibility
To apply for early release 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 per cent or more, or
- if you’re a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.
Stimulus Package Details: Pensioners
Cuts to deeming rates for pensioners
Deeming rates are the predicted rate of return on personal investments. They help the Government work out eligibility for the pension as well as other government benefits. Therefore, the higher the deeming rate, the less money pensioners get.
The upper pension deeming rate decreased from 3% to 2.5% in the first announcement. In addition, the lower deeming rate decreased from 1% to 0.5%.
A further 0.5% cut occurred on both rates in the second stimulus announcement. Therefore, the lower deeming rate is 0.25 per cent and the upper deeming rate is 2.25 per cent.
The minimum superannuation drawdown rate halved
Some superannuation pensions and also annuities are subject to rules that specify a set rate that must be paid each year.
Therefore, to protect the balance of these funds the rate at which payments must be made has been halved.
Other Coronavirus resources:
- General tax information and possible tax extensions during Covid-19
- Tax deductions on offer to work from home taxpayers
- Information about the government stimulus for small business
Please note: This stimulus package for individuals information should not be relied upon as detailed advice. Therefore, please contact us for more detail about any of the above measures.
