Covid-19 Stimulus Package – Income Support For Individuals

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The Government yesterday released a second, far reaching $66.1 billion, stimulus package that boosts income support payments and introduced targeted changes to the superannuation rules for individuals to assist them during the next six months.

Please note the stimulus measures are not yet legislated. Parliament will reconvene Monday 23 March 2020. The Government has also flagged that additional stimulus packages will be required.

 

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In Summary

  1. Supplements increased, access extended and eased – for 6 months from 27 April 2020:
    • A temporary coronavirus supplement of $550 will be paid to existing income support recipients (people will receive their normal payment plus $550 each fortnight for 6 months).
    • A second one-off stimulus payment of $750 will be paid automatically from 13 June 2020 to certain income support recipients (in addition to the payment made from 31 March 2020).
  1. Early release of superannuation

Individuals in financial distress are able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax-free and will not affect Centrelink or Veterans’ Affairs payments.

  1. Temporary reduction in minimum superannuation draw down rates (Only applicable to individuals in pension phase)

Superannuation minimum drawdown requirements for account-based pensions and similar products reduced by 50% in 2019-20 and 2020-21.

  1. Bankruptcy safety net

Temporary 6 month increase to the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor from $5,000 to $20,000.

This document contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should speak to a licensed financial advisor who should assess its relevance to your individual circumstances.  While The Field Group believes the information is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the corporations Act 2001.

About the author

The Field Group is composed of experts in the fields of Xero accounting, personal tax, self-managed superannuation, audit services, business services, bookkeeping, bench marking, business structuring and ATO Compliance. Based in Melbourne, The Field Group are also able to work with clients all over Australia and are the market leader for accounting services in the Ringwood, Croydon, Chirnside Park, Lilydale and general Melbourne eastern suburb region.

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