The Federal Government has announced a raft of new welfare payments designed to help financially-stressed Australians get by over the coming months. Here's what you need to know.
Over the weekend, the Federal Government announced a $66 billion stimulus package that is designed to help small businesses and individuals who have been financially impacted by COVID-19.
For individuals, there are three measures that should help to provide some financial relief over the next few months: an additional stimulus payment, a new supplement for job seekers, and a newly introduced provision for early release of super.
Five million Australians to receive an additional one-off $750 stimulus payment
First, welfare recipients who were eligible for the initial $750 stimulus payment – which should be hitting the bank accounts of approximately five million Australians (including those on aged and disability pensions, veterans, eligible concession cardholders and people on Newstart and Youth Allowance) on 31 March – will receive an additional $750 on 13 July.
A new $550 fortnightly "Coronavirus Supplement" for job seekers, casual workers and sole traders
Second, individuals who are on the Jobseeker Payment(previously called 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 starting from 27 April.
The payment has been dubbed the “coronavirus supplement”, and the government is waiving assets and waiting periods to access the payment. Sole traders and casual workers are also eligible for this payment, as are individuals who have lost their jobs and people who are caring for someone with the coronavirus, however they will need to apply for the payment through Centrelink and meet the income test of earning less than $1,075 a fortnight.
This supplement is in addition to other welfare payments that individuals are already receiving, as well as the two lots of $750 stimulus payments.
Access up to $20K this year from your superannuation
Lastly, individuals who have been financially impacted by the COVID-19 will be able to be apply for early access up to $20K ($10K before 1 July 2020 and a further $10K from 1 July 2020) from their superannuation from mid-April.
To apply for early release of superannuation under the new provision, individuals have to apply through the myGov website. You will need to self-certify that you meet the below criteria:
- You are unemployed; or
- 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
- 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.
The ATO will make a determination on whether you are eligible for early release of your super under the new stimulus package provisions. Provided you’re eligible, it will get in touch with your super fund and advise them to release the payment to your bank account.
While you won’t need to contact your super fund separately to process this payment, it’s a good idea to get in touch to make sure they have your correct bank account details and any other documentation they may need.
More information can be found in the government’s fact sheet.
Financial aid timeline: important dates
- 31 March Welfare recipients to receive first $750 stimulus payment
- Mid-April Individuals can apply for early release of super
- 27 April Eligible recipients get first “coronavirus supplement” of $550 fortnightly
- 30 June Last day to apply for early access of superannuation for 2019-20 up to $10K
- 1 July Individuals can apply for early access of superannuation for 2020-21 up to $10K
- 13 July Welfare recipients to receive second $750 stimulus payment
- 30 September Last day to apply for early access of superannuation for 2020-21
Exercise caution when accessing super early
Rachel Hamlen, Head of Customer Experience at FairVine Super, applauded the new measures introduced by the Federal Government, but advised individuals to exercise caution when accessing their retirement funds early.
“I applaud the swift actions by the Federal Government to help Australians access financial relief during these incredibly trying times.With so many people losing their jobs and worrying about keeping a roof over their heads and food on the table, the ability to dip into your retirement nest egg will provide a lot of families with some much-needed peace of mind to get through the next few months of unprecedented uncertainty.
“With that said, accessing your super early should be a measure of absolute last resort. That money is there to help fund your retirement, and draining it unnecessarily may cause you serious financial hardship in the future. If you do need to access the payment, consider taking only what you’ll need to get by, and also reinvesting money you don’t end up using back into your super,” she said.
Get your retirement savings back on track
The COVID-19 crisis means that not only are everyday finances impacted, but superannuation contributions will also be sharply curtailed.
Ms Hamlen recommends making small voluntary contributions wherever possible to cushion the impact of COVID-19 on your retirement savings.
“Simply sweeping the leftover change from your everyday purchases into your super fund can go a long way towards helping boost your super fund balance. The RoundUps feature in FairVine Super automates this process so it’s something you don’t have to consciously think about.
“If every cent counts right now, you can look to a feature like FairRewards for topping up your super without having to touch your bank balance. This innovative savings tool, exclusive to FairVine Super members, has your favourite brands investing money into your super for you. Here’s how it works: every time you shop online with hundreds of participating retailers, they will deposit up to 20c for every dollar you spend with them directly to your super. Participating brands include Menulog, Hello Fresh, BWS, Adore Beauty, and Budget Pet Products.”