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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.

UPDATE: On 22 July 2020, the Federal Government announced an extension and changes to the JobKeeper wage subsidy, Coronavirus Supplement and temporary early superannuation access scheme. For details about the changes, go to this article.

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:

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.

The fifth is:

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.

The sixth is:

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.

This article is a useful guide to the range of lending relief measures and how to apply for hardship. Alternatively, MyBudget may be able to speak to your creditors and bank for you. 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.

Rent relief measures

The Federal Government initially announced a six-month ban on residential rental evictions, however, details were scant until mid to late-April as to how that would work in practice. As residential tenancies fall under state laws, it’s been up to each state and territory government to determine how to implement the Federal Government’s announcement. Also, whether to introduce further measures to keep people in housing, all the while trying to balance the interests of tenants and landlords.

The situation is now clearer and you’ll find a state-by-state summary below. For more information, including tenant and landlord rights and responsibilities and how to negotiate reduced rent, read and bookmark our rent relief article.

New South Wales COVID-19 rent relief measures

The NSW Government has introduced a 60-day ban on evictions if your household income has fallen by at least 25% due to COVID-19. The ban can be extended to six months if necessary, and before requesting an eviction, landlords must first try to negotiate a rent reduction with you.

For further information about your rights contact the Tenants’ Union of NSW.

Victoria COVID-19 rent relief measures

Victorian renters may be eligible for a $2,000 grant providing you first try to negotiate a six-month rent reduction or deferral with your landlord. You must also lodge the terms of any new agreement with Consumer Affairs Victoria.

To be eligible for the Rent Relief Grant, which will be paid to your landlord to count towards the new rental amount, you need to have less than $5,000 in savings, be still paying at least 30% of your income in rent and have household income of less than $1,903 per week.

If you’ve been unable to negotiate new rental terms with your landlord, but meet the other eligibility requirements, you may still be eligible for the grant providing you’ve undertaken a rental dispute resolution or mediation process with Consumer Affairs Victoria.

For further information contact Tenants Victoria.

Queensland COVID-19 rent relief measures

The Queensland Government has also introduced a six-month freeze on evictions due to COVID-19 and rental grants.

To be eligible for a rental grant, you must have lost your job due to COVID-19, applied for Centrelink benefits, and have less than $10,000 in savings. In addition, you’ll need to have exhausted all attempts to negotiate a rent reduction or freeze with your landlord, and be able to provide evidence of this.

The COVID-19 Rental Grant is a one-off payment of up to four weeks rent (to a maximum of $2,000), which will be paid to your landlord on your behalf.

For further information contact Tenants Queensland.

Western Australia COVID-19 rent relief measures

In Western Australia, a ban on evictions for six-months is set to be introduced for those affected by COVID-19, along with a ban on rent increases and grants. Tenants and landlords are urged to negotiate on rental payments and you’ll also be able to end a lease early without incurring break fees.

Grants will be available for tenants or sub-tenants who have lost their job, applied to Centrelink for income support, or have less than $10,000 in savings and are paying at least 25 per cent of their rent. WA Consumer Protection will administer residential relief grants with applications open from May 1.

For further information contact Tenancy WA.

South Australia COVID-19 rent relief measures

South Australia has outlawed rent increases for six months and introduced a ban on evictions in cases where tenants are facing extreme COVID-19 related financial hardship.

For further information contact the Tenants’ Information and Advisory Service.

Tasmania COVID-19 rent relief measures

The Tasmanian Government has introduced measures to protect tenants from eviction until at least 30 June, which may be extended further. It is also encouraging tenants and landlords to negotiate if COVID-19 circumstances mean you can no longer pay the full rental amount.

Both tenants and landlords can also apply to break a lease in the event of a 25% or more reduction in household income - this includes any government assistance.

For further information contact the Tenants’ Union of Tasmania.

Australian Capital Territory COVID-19 rent relief measures

The ACT Government has banned evictions in the short-term and frozen rental increases. It has also introduced incentives for landlords to offer rent reductions of at least 25% for up to six months.

For further information contact Legal Aid ACT.

Northern Territory COVID-19 rent relief measures

The NT Government is yet to implement a ban on evictions, but pressure is building on it to do so and an announcement is expected shortly. New rental legislation due to take effect has been postponed to consider longer negotiation periods between tenants and landlords and create fairer terms for tenants who can demonstrate hardship due to COVID-19.

For further information contact the Darwin Community Legal Service.

What about utilities and power bills?

The Australian Energy Council and Australian Energy Regulator, peak bodies that represent electricity and gas retailers, have 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. This article contains more information about energy relief measures and how to keep your power bills down.

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 out 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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