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Your guide to financial assistance in the coronavirus pandemic
By MyBudget Editor

If the threat of coronavirus (COVID-19) isn’t enough, the economy has taken a nosedive and Australians are now deeply concerned about losing their jobs or income. For a lot of people, the axe has already fallen. In response, the Federal Government has announced two economic stimulus packages worth $189 billion and has said that more financial support will be announced over the coming months. “But what does it all mean for me?” you may be asking. Here’s our summary.

To quote a social media meme: the last few weeks have been a long year. Words and phrases such as ‘coronavirus,’ ‘social distancing,’ ‘self-isolation’ and ‘panic purchasing’ have gone from previously unused to dominating our conversations and our lives. Now, the terms ‘economic recession’ and ‘job losses’ have been added.

The most immediate risk of income loss is to casual, gig workers and the self-employed, but nobody is immune. Permanent full-time and part-time workers’ futures are also in question. Qantas, for example, is standing down 20,000 staff while Australia’s national carrier goes into an indefinite holding pattern. At the time of writing, more than 50,000 people have applied for benefits and melted down Centrelink’s phone and website in the process.

To date, the Federal Government, all state and territory governments and a number of other organisations have announced a series of financial measures aimed at helping those affected and trying to prevent the economy from free-falling.

To help you navigate this new territory, here’s a snapshot of the various relief packages that have recently been announced, along with steps you can take to protect your hip pocket as we embark into the unknown.

Federal Government support

To date, the Federal Government has announced two economic stimulus packages worth $189 billion, or 10% of the size of the Australian economy, and has said that more financial support will be announced over the coming months.

The first is:

Coronavirus supplement

For the next six months, the Federal Government will establish a new coronavirus supplement worth $550 per person per fortnight.

This will be paid to both existing and new recipients of:

  • JobSeeker Payment
  • Youth Allowance Jobseeker
  • Parenting Payment
  • Farm Household Allowance
  • Special Benefit

The coronavirus supplement will effectively double the payment for people currently receiving these benefits to $1100 per fortnight. Students receiving Youth Allowance, Austudy and Abstudy will also be eligible. The payments will begin from April 27.

Asset tests and waiting periods that usually apply to these types of payments will be waived, and eligibility will be extended to permanent employees who are temporarily stood down. Sole traders, the self-employed, casual workers and contract workers whose volume of work has been affected may also be eligible, providing they are earning less than $1075 per fortnight.

The income test for partners of unemployed people on the JobSeeker payment has increased. A working partner can earn up to almost $80,000 (before tax) a year before their unemployed partner becomes ineligible for the payment.

If you earn more than this threshold and don’t qualify for the coronavirus supplement, you may still qualify for the $750 stimulus payment (see below).

The second is:

JobKeeper program

Under a new benefit called JobKeeper, businesses may receive a fortnightly wage subsidy up to $1,500 per employee. Employers with an annual turnover of less than $1 billion that have experienced a 30 per cent fall in revenue since March 1 2020 will be eligible for the wage subsidy. Sole traders, self-employed people, partnerships and trusts will also be eligible. You cannot apply for JobKeeper as an individual. The Australian Tax Office will oversee the payment and has created a website for companies to register interest in the JobKeeper program. A person cannot receive JobSeeker and JobKeeper payments at the same time.

The third is:

Household stimulus payments

The Federal Government is providing two $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The payments will be tax-free.

The first payment will be made from March 31, with the second payment made from July 13. People eligible for the coronavirus supplement will not be entitled to the second payment.

It is expected that up to 6.6 million people will be eligible for the first payment and around five million for the second payment.

The fourth is:

Rent relief

Under a Federal Government initiative, the states and territories have agreed to a six month moratorium on residential and commercial evictions where the tenant is impacted by the coronavirus situation. More specific details are expected to develop. We will update this document as they become available.

The fifth is:

Temporary access to superannuation

The Federal Government will allow some people affected by the coronavirus situation to access up to $10,000 of their super this financial year, and another $10,000 in the first three months of the 2020-21 financial year, tax-free.

The unemployed and people receiving the following benefits will be eligible:

  • JobSeeker Payment
  • Youth Allowance Jobseeker
  • Parenting Payment
  • Farm Household Allowance
  • Special Benefit

People who have been made redundant, had their work hours reduced by 20% or more, and sole traders whose turnover has reduced by 20% or more since January 1 this year will also be eligible. Applications can be made to the Australian Taxation Office (ATO) from mid-April.

Measures were also announced to help small and medium-sized businesses. More information about the stimulus assistance for businesses is available from the Federal Government.

Due to the uncertainty around the country’s economic position, the Federal Government has also announced that it will postpone the next Federal Budget until 6 October 2020. The Budget is usually handed down in May.

Free childcare

On 2 April 2020, Federal Government announced free childcare for Australian parents during the coronavirus shutdown. The $1.6 billion temporary program will begin from Sunday 5 April. Unlike the current system, the new package will not be means tested and will replace the current childcare funding platform for the duration of the coronavirus crisis. The gap fee for parents who have been paying for childcare will also be waived and backdated to March 23.

Under the temporary program, childcare centres will prioritise children of essential workers who can't care for their children at home and vulnerable children, and then try to accommodate parents who have taken their children out of care and wish to put them back in. Parents should speak with their child care centre about the program and availability.

What tax measures are being introduced?

If you’re working from home as a result of COVID-19, you may be able to claim a deduction for the additional running expenses you incur, according to the ATO. This could cover expenses such as heating, cooling and lighting in the area you are working from, plus your phone and internet and other running expenses – worth keeping in mind when the time comes to file your tax return.

For businesses, the ATO has implemented some relief options, and individuals or businesses having difficulties meeting their tax obligations because of COVID-19 should call the ATO’s Emergency Support Infoline on 1800 806 218.

How have the Big Four banks responded?

The Reserve Bank of Australia (RBA) announced a special cut to official interests rates on March 19 on top of the 0.25% cut it made at the start of March. This means official interest rates in Australia are now just 0.25%, a record low level.

All of the Big Four – ANZ, Westpac, NAB and Commonwealth Bank – responded by making changes to their interest rates, with some making cuts to their variable home loan rates and others to their fixed home loan rates. In addition, the big four banks have all announced that customers affected by COVID-19 will be able to pause their home loan repayments for up to six months, as well as a range of measures for business customers.

As we know, these are uncharted waters for everyone. As a first port of call, it makes sense to check with your bank or financial institution to further understand what financial hardship plans they may have in place.

As an example, MyBudget’s hardship team spoke with the Commonwealth Bank (CBA) last week and were advised that the CBA are immediately going to be more lenient with any assistance requests related to the coronavirus situation. It will include capping arrears for mortgages with equity and delaying payments on cards for up to three months. We expect other banks to follow similarly.

Each situation will need to be assessed on its merits, which MyBudget can help with. We can also assist with financial hardship applications.

State and Territory Government Assistance

New South Wales: The NSW Government has announced $1.6 billion in measures to support businesses.

Victoria: The Victorian Government has announced a $1.7 billion package to support businesses.

Queensland: The Queensland Government has announced a package valued at $27.25 million to assist local government, business and industry, as well as a $200 rebate for all Queensland households (including a $50 ‘Asset Ownership Dividend’) to offset the cost of water and electricity bills. The rebate will be applied automatically through electricity bills.

Western Australia: The WA Government has announced many measures for businesses in its $607 million stimulus package, as well as some measures for individuals. Scheduled increases for household fees and charges, including electricity, water, motor vehicle charges, the emergency services levy and public transport fares will be frozen (previously these services were due to increase by $127 from July 1). And the Energy Assistance Package, which is available to eligible concession card-holders, will be doubled from $300 to $600 as of July 1.

South Australia: The SA Government has announced a $350 million stimulus package for businesses. It has also granted the state’s foster carers immediate, one-off payments of $200 per child to assist with buying cleaning and hygiene products to stop the spread of COVID-19.

Tasmania: The Tasmanian Government has announced a $420 million package, which includes one-off payments of $250 for individuals or up to $1,000 for families who are required to self-isolate. Recipients must hold a Health Care Card, Pensioners Concession Card or be low income earners who can demonstrate a need for financial support, including casual workers.

Australian Capital Territory: The ACT Government has announced a $137 million package. For individuals, it includes rebates of $150 on household rates, as well as a freeze on a number of fees and charges, including the fire and emergency services levy, public transport, vehicle registration and parking fees. Public housing tenants will receive $250 in rental support, as well as a one-off rebate for residential utility concession holders of $200 to help with power bills.

Northern Territory: The NT Government has announced a $65 million plan for businesses.

Further assistance for individuals is expected to be released by the state governments as the crisis develops, along with a rental relief package for both individuals and businesses, which is currently being jointly created by the state and territory governments.

What about utilities and power bills?

The Australian Energy Council, which represents a large number of electricity and gas retailers (including AGL and Alinta), has committed to measures to help people who are having difficulty paying their bills due to coronavirus impacts. These include:

  • Payment extensions
  • Payment plans
  • Bill smoothing to avoid large bills
  • Assistance with accessing grants and concessions
  • Advice on how to best manage usage, including tips on lowering power bills.

For people who can’t pay their bills, there will be no barriers to entering hardship programs, and those receiving hardship assistance won’t have their supply disconnected or be pursued for debt collection, bankruptcy or late fees. The Council says people should contact their electricity and gas providers if they have issues with bill payment. We are also expecting further utilities assistance measures to be implemented by the Australian Energy Regulator. We will update this page as information becomes available.

What else can you do to manage through this difficult time?

If events you’d planned to attend or trips you’d planned to take have been cancelled, follow up with the operator for a refund or at least a future credit.

If you’ve got less money coming in, it’s important to look at exactly where your money’s going, and whether there are adjustments you can make to your budget to save in the current climate. For example, with events cancelled, socialising discouraged and the government advising Australians not to travel, any money you have set aside for eating out, going to the gym, travel or entertainment could be redirected. If you’re working from home you’re probably saving money on petrol, public transport, road tolls, car parking, coffees and lunch.

And finally, if you think you’re going to have trouble meeting your regular financial obligations, such as paying your rent, mortgage or bills, act early. Contact your providers to explain your situation and see if they’re offering payment extensions, freezes to take the pressure off or hardship arrangements.

We’ll get through this together

Here at MyBudget, we’re operating as normal and are ready to help. If you’re a current client, reanalyzing your budget and working together to find the best solution for you is how we can help. And if it looks like some of your financial obligations can’t be met, then we can also work directly with creditors on your behalf.

If you’re not a client, and are interested in finding out more, we can design a customised budget that anticipates ‘what if’ and takes the uncertainty out of your finances. Having a plan is the best way to dial down stress and anxiety and prepare for unknowns. Find our more here.

Our free budget consultation service is now being provided over the phone and the customised budget we design is yours to keep. For more information, contact MyBudget on 1300 300 922 or enquire online.

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