INDIVIDUAL STIMULUS MEASURES
SUPERANNUATION MEASURES
ACCESS TO LUMP SUMS FROM SUPER
Effective: mid-April 2020
Eligible people may access up to $10,000 of their super before 1 July 2020. A further $10,000 can be accessed from 1 July 2020 for approximately three months (the exact timing will depend on the passing of the legislation).
To be eligible to access lump sums from super, a person must be:
- unemployed
- eligible for a Jobseeker payment, Youth Allowance for job seekers, Parenting Payment (including the single and partnered payments), special benefit or farm household allowance
- and on or after 1 January 2020 had one of the following occur:
o be made redundant
o had their working hours reduced by 20% or more
o be a sole trader and had their business suspended or there was a reduction in business turnover of 20% or more.
These payments are tax-free and not treated as income under the Centrelink income test.
Steps to follow to apply for the lump sum:
- Contact the super fund to ensure it has the person's current bank account details and proof of identity documents.
- The person applies for the lump sum through their myGov account.
- If eligible, the Australian Taxation Office (ATO) will issue a determination to the person and also provide a copy to the super fund.
- The super fund pays the lump sum to the person's bank account. There is no need for the person to apply to the super fund.
What is the impact of the measure?
This measure will provide some cash flow to those affected sole traders and employees who are on reduced hours or who are stood down because of the COVID-19 crisis.
REDUCED MINIMUM PENSION PAYMENTS
Effective: 2019/20 and 2020/21 financial years
The minimum pension payments required from account-based pensions and similar products will be reduced by 50%:
What is the impact of the measure?
Pensioners who invest in growth investments may crystallise smaller capital losses as they may dispose of a smaller proportion of their investments to meet minimum pension payments. This may allow any remaining growth investments to potentially grow in value when the markets recover.
CENTRELINK MEASURES
TWO $750 TAX-FREE LUMP SUM PAYMENTS FOR ELIGIBLE PEOPLE
Effective date: 12 March 2020
Up to two, separate, tax-free $750 lump sum payments may be paid to people who receive one of the following payments or who hold any of the following concession cards, as shown in Table 1 below. A person who holds more than one of these will only receive a maximum of two lump sums. A person can only receive one $750 payment in each round of payments even if they qualify for each round of payment in multiple ways. For example, someone receiving Carer Payment and Carer Allowance may receive a first payment of $750 and a second payment of $750, but they won't receive four lots of $750.
Those who are eligible for the Coronavirus Supplement will only receive the first lump sum payment and will not be eligible for the second lump sum.
Eligibility criteria to receive $750 tax free lump sums
To be eligible for these payments the person must be residing in Australia.
The first payment will be paid from 31 March 2020. Those who lodged a claim for an eligible payment or concession card at any time between 12 March 2020 to 13 April 2020, which is subsequently approved, will also receive the first payment.
The second payment will be made from 13 July 2020.
Table 1: The following are eligible payments and concession cards:
| Eligible for up to 2 x $750 lump sums |
May receive the first lump sum but will receive the Coronavirus Supplement instead of the second lump sum |
| Eligible for up to 2 x $750 lump sums · Age pension · Disability support pension · Carer Payment · Widow B Pension · ABSTUDY (Living Allowance) · Austudy · Bereavement Allowance · Newstart Allowance · Family Tax Benefit (includes Double Orphan Pension) · Carer Allowance · Pensioner Concession Card holders · Commonwealth Seniors Health Card holders · Veterans Service Pension; Veteran Income Support Supplement · Veteran Compensation Payments (includes lump sum payments) · War Widow pension, and Veteran Payment · DVA Pensioner Concession Card holders · Disability Pensioners at the temporary special rate · DVA income support pensioners at $0 rate · DVA Gold Card holders |
May receive the first lump sum but will receive the Coronavirus Supplement instead of the second lump sum · Parenting Payment · Wife Pension · Jobseeker Payment · Youth Allowance Jobseeker · Partner Allowance · Sickness Allowance · Special Benefit · Widow Allowance · Farm Household Allowance |
The payments will not be treated as income for Social Security, Department of Veterans' Affairs (DVA) and Farm Household Allowance purposes.
What is the impact of the measure?
This means a single person may receive up to $1,500 and couples may receive up to $3,000 from the first and second payments.
CORONAVIRUS SUPPLEMENT
Effective: 27 April 2020
The Government will expand access to income support payments which will provide access to the Coronavirus Supplement. The Coronavirus Supplement is a $550 fortnightly payment for a time-limited period of six months which will be paid to eligible beneficiaries, see Table 1 above. Eligible beneficiaries will receive the full rate.
To provide more access to income support payments other arrangements during the time-limited six-month period include:
- Waiving the asset test for Jobseeker Payment, Youth Allowance Jobseeker, and Parenting Payment.
- The income test will continue to apply to the other payments the person receives.
- The one-week ordinary waiting period, liquid assets waiting period, seasonal work preclusion period and newly arrived residents waiting period will not apply during this period. These waiting periods will be waived for those currently serving these waiting periods.
- Income maintenance periods and compensation preclusion periods will continue to apply as payments received by the person are treated as income.
Those who are receiving employer entitlements, such as sick leave or annual leave, and those receiving income protection insurance, may not receive Jobseeker Payment and Youth Allowance Jobseeker.
New applicants are encouraged to lodge claims for eligible payments online through their myGov accounts for faster processing. Applications can also be done by phone.
REDUCED DEEMING RATES
Effective: 1 May 2020
The upper deeming rate for income in excess of the income threshold will reduce from 3% to 2.25%, and the lower deeming rate from 1% to 0.25%.
What is the impact of the measure?
As the coronavirus situation is expected to last for most of the remainder of this year, many pensioners and income support recipients will experience a significant reduction in the value of their investments which are assessed under Social Security, DVA and Aged Care assets tests. This decline in value, combined with the reduction of deeming rates from 1 May 2020, is expected to make more people eligible for the Age Pension or income support. Many people who are currently receiving part pensions and less than the full rate of income support may receive increased entitlements.
| Living Arrangement |
Income Threshold |
| Single |
$51,800 |
| Couple |
$86,200 |
| Age |
Default minimum drawdown rates (%) |
Reduced by 50% in 2019/20 and 2020/21 income years (%) |
| Under 65 |
4 |
2 |
| 65-74 |
5 |
2.5 |
| 75-79 |
6 |
3 |
| 80-84 |
7 |
3.5 |
| 85-89 |
9 |
4.5 |
| 90-94 |
11 |
5.5 |
| 95 and older |
14 |
7 |
LEGAL
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Investngro Pty Ltd ABN 53 113 102 695 trading as Murray Nankivell Financial Planning, is an authorised representative of Count Financial Limited ABN 19 001 974 625 holder of Australian financial services licence number 227232 (“Count”). Count is owned by Count Limited ABN 111 26 990 832 of GPO Box 1453, Sydney NSW 2001. Count Limited is listed on the Australian Stock Exchange. Any taxation and accounting services are provided by Murray Nankivell and are not within the authority Count. The information on this web site is not financial product advice and is provided for information only.