The legislation for the stimulus has passed through the Senate overnight.
The following is a summary of the economic stimulus support packages available and includes:
1. Support for workers and households
The Government will support households including casuals, sole-traders, retirees and those on income support by:
• providing the Coronavirus Supplement
• providing payments to support households
• providing for early release of superannuation
• temporarily reducing superannuation minimum drawdown rates, and
• temporarily reducing social security deeming rates.
Income support for individuals: Coronavirus Supplement
Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus Supplement to be paid at a rate of $550 per fortnight.
This will be paid to both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit. The Coronavirus Supplement and expanded access for payments will commence from 27 April 2020.
For the period of the Coronavirus Supplement, there will be expanded access to the income support payments listed above.
• Expanded access — Jobseeker Payment and Youth Allowance Jobseeker criteria will provide payment access for permanent employees who are stood down or lose their employment, sole traders, the self-employed, casual workers and contract workers who meet the income tests as a result of the economic downturn due to the coronavirus. This could also include a person required to care for someone who is affected by the coronavirus.
• Reduced means-testing — asset testing for JobSeeker Payment, Youth Allowance Jobseeker and Parenting Payment will be waived for the period of the Coronavirus Supplement. Income testing will still apply to the person’s other payments, consistent with current arrangements.
• Reduced waiting times — to further accelerate access to payments, the Liquid Asset test Waiting Period (LAWP) and the Seasonal Work Preclusion Period (SWPP) will also be waived for recipients eligible for the Coronavirus Supplement. Income Maintenance Periods and Compensation Preclusion Periods will continue to apply, as payments under these arrangements are treated as income.
Individuals will not be permitted and will need to declare that they are not, accessing employer entitlements (such as annual leave and/or sick leave) or income protection insurance, at the same time as receiving Jobseeker Payment and Youth Allowance Jobseeker under these arrangements.
Flexible jobseeking arrangements
There will be greater flexibility and safety for individuals receiving Jobseeker payment.
Jobseekers who have caring responsibilities, or who need to self-isolate, are able to seek an exemption from their mutual obligation requirements without the need for medical evidence.
Activities can be rescheduled if the job seeker is unable to attend as a result of the coronavirus. Job Plans will be adjusted to a default requirement of four job searches a month (or one a week) to reflect softening labour market conditions.
Payments to support households
Two separate $750 payments will be provided to social security, veteran and other income support recipients and eligible concession cardholders. The first payment (previously announced in the Government’s first response on 12 March 2020) will be made from 31 March 2020 and is available to those who are eligible payment recipients and concession cardholders at any time from 12 March 2020 to 13 April 2020 inclusive.
The second payment will be made from 13 July 2020 and is available for eligible payment recipients and concession cardholders on 10 July 2020.
A person can be eligible to receive both a first and second support payment. However, they can only receive one $750 payment in each round of payments, even if they qualify in each round of the payments in multiple ways. The payment will be tax-free and will not count as income for the purposes of Social Security, Farm Household Allowance and Veteran payments.
Early release of superannuation
Individuals in financial stress as a result of the coronavirus will be allowed to access up to $10,000 of their superannuation in 2019/20 and a further $10,000 in 2020/21.
Eligible individuals will be able to apply online through myGov from mid-April 2020 for access of 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 three months (exact timing will depend on the passage of the relevant legislation).
To apply for early release, the applicant must satisfy at least one of the following requirements:
• the applicant is unemployed
• the applicant is 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, and
• on or after 1 January 2020:
– the applicant was made redundant
– the applicant’s working hours were reduced by 20% or more, or
– if the applicant was a sole trader — their business was suspended or there was a reduction in its turnover of 20% or more.
People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Applicants can apply directly to the ATO through the myGov website. The ATO will then issue the applicant a determination and provide a copy of it to the superannuation fund. The fund will then make the payment to the applicant directly. Different arrangements apply to members of self-managed superannuation funds (SMSFs).
Temporary reduction in superannuation minimum drawdown rates
The superannuation minimum drawdown requirements for account-based pensions and similar products are being reduced by 50% for 2019/20 and 2020/21.
Default minimum drawdown rates
2019/20 and 2020/21 reduced rates
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Further reduction in social security deeming rates
From 1 May 2020, the social security deeming rates will be further reduced by 0.25%. The upper deeming rate will be 2.25% and the lower deeming rate will be 0.25%.
This reduction is additional to the previously announced 0.5% in both the upper and lower deeming rates the Government first announced on 12 March 2020.
2. Boosting cash flow for employers
The Government is providing tax-free payments to eligible entities that employ workers. Eligible entities are small and medium business entities or Not-for-Profits (NFPs) entities (including charities) with aggregated annual turnover under $50m.
Under the enhanced scheme from the first package announced on 12 March 2020, employers will receive payments delivered as an automatic credit in the ATO’s activity statement system. The initial payment, to be made from 28 April 2020, will equal to 100% of their salary and wages withheld (up from 50%), with the maximum payment of $50,000 (up from $25,000) and the minimum payment of $10,000 (up from $2,000).
Entities that continue to be active may be eligible for additional payments. For monthly activity statement lodgers, the additional payments will be equal to a quarter of their total initial payment following the lodgment of their June 2020, July 2020, August 2020 and September 2020 activity statements (up to a total of $50,000). For quarterly activity statement lodgers, the additional payments will be equal to half of their total initial payment following the lodgment of their June 2020 and September 2020 activity statements (up to a total of $50,000).
3. Regulatory protection and financial support for businesses
The Government will establish a Coronavirus SME Guarantee Scheme and provide temporary relief for financially distressed businesses.
Coronavirus SME Guarantee Scheme
The Coronavirus SME Guarantee Scheme will be established to guarantee 50% of new loans issued by eligible lenders to small and medium enterprises (SMEs). It will guarantee up to $20b to support $40b in SME loans.
Providing temporary relief for financially distressed businesses
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time that companies have to respond to any statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent. The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the coronavirus.