The COVID-19 crisis has left many Australians experiencing severe financial hardship. It’s a time of unprecedented uncertainty and difficulty, with many people losing their jobs or having their work hours drastically reduced, and despairing over how they’re going to keep a roof over their heads and food on the table.
However, there are various avenues available for financial relief.
The Federal Government has stepped in with stimulus packages that are designed to help Australians weather the coming months as the country effectively goes into lock-down.
$1,500 stimulus payment for welfare recipients
Welfare recipients – including those on aged and disability pensions, veterans, eligible concession cardholders and people on Newstart (which has been renamed to JobSeeker Payment) and Youth Allowance – are eligible to receive two one-off payments of $750. If you are already on these payments, you don’t need to do anything more; payments will automatically be deposited into your bank account, with the first arriving on 31 March and the second on 13 July. If you aren’t on these payments already but are otherwise eligible, you will need to contact Centrelink.
New $550 fortnightly payment for jobseekers, casuals and sole traders
Australians who are currently receiving Newstart, Youth Allowance (jobseeker), parenting payments, the farm household allowance and special benefit will receive a new fortnightly payment of $550 for the next six months beginning from 27 April.
Sole traders, casual workers, and people who are caring for someone with the coronavirus will also be eligible for this payment, provided they are earning less than $1,075 a fortnight. They will need to apply to Centrelink to receive it. Unlike existing jobseeker payments, these Australians will not need to apply for other jobs to receive this, nor will they need to satisfy any asset tests or be subject to a waiting period.
New $1,500 JobKeeper fortnightly payment for employees and sole traders
The newest initiative from the Federal Government is a new JobKeeper payment, designed to prevent employers from having to stand down their workers. Note: this is something that only employers can apply for on behalf of their employees (both current and previous). See more here.
Early access to superannuation
Individuals who have been financially impacted by COVID-19 will be able to be apply for early access of their superannuation of up to $20K ($10K before 1 July 2020 and a further $10K from 1 July 2020) from from mid-April.
Unlike the previous two payments, this payment is administered by the ATO. You will need to apply for this through the myGov website and self-certify that you meet the below criteria:
1) You are unemployed; or
2) You are eligible to receive a job seeker payment, youth allowance for job seekers, parenting payment (which includes the single and partnered payment), special benefit or farm household allowance; or
3) On or after January 2020:
– You were made redundant; or
– Your working hours were reduced by 20% or more; or
– You are a sole trader and your business was suspended or there was a reduction in your turnover by 20% or more.
Note: this is not a provision that should be taken up lightly. With Australians are already retiring with inadequate funds in their super (the average balance for men and women is currently $270,710 and $157,050 respectively, however the amount recommended by the Association of Superannuation Funds of Australia for a comfortable retirement is $545,000 for a single person and $640,000 for a couple), we need to be putting more into our superannuation, not taking money out.
Other avenues for financial help
Many banks are offering initiatives for deferring home loan payments for up to six months. For renters, laws are currently being debated in the Tasmanian Parliament that could protect renters from eviction for the next four months – and it’s something that NSW is looking at implementing, too. Watch this space.
A handful of utility, internet and mobile network providers have also announced COVID-19-specific measures to help customers with bill payments. Beyond that, most providers also have financial hardship programs that can help customers who are having difficulties paying their bills.
If you have any questions, or need help with managing your finances over the coming months, please get in touch – I’m here to help.