The Government has announced a range of economic stimulus measures to help individuals who have been hit hardest by the financial impact of COVID-19.
The JobKeeper payment is designed to keep people employed during this difficult economic period.
It is a temporary wage subsidy offered by the Government to employers to ensure they continue paying their employees.
How does it work?
The Government provides businesses with the JobKeeper wage subsidy for each employee. JobKeeper payments are made to employers in arrears on a monthly basis.
In the period to 27 September 2020, eligible employees could receive, at a minimum, $1500 per fortnight from the Government. From 28 September 2020, the JobKeeper Payment was extended however the payment rates were reduced and two tiers of payment were introduced as follows:
|JobKeeper rate for 20 hours work a week or more||JobKeeper rate for fewer than 20 hours work a week|
|Up to 27 September 2020||$1,500||$1,500|
|28 September 2020 to 3 January 2021||$1,200||$750|
|4 January 2021 to 28 March 2021||$1,000||$650|
If you receive a wage above the JobKeeper amount normally, you will continue to receive your normal wage; except that the JobKeeper amount is coming from the Government, rather than your employer.
If you do not receive this amount normally, it doesn’t matter. Your employer must pass on the full JobKeeper payment per fortnight to you.
If you have been stood down but your employer is receiving JobKeeper payments, they must continue to pass on the payments to you.
Employers can top up these payments. Where you receive additional payments from your employer, the superannuation guarantee of 9.5% is not required to be paid on top of the JobKeeper payment.
How do you know if your employer is eligible?
Business and self-employed individuals can be eligible if their business is not subject to the Major Bank Levy, and:
- For businesses with an annual turnover of less than $1billion, they will be eligible if annual turnover has already or is estimated to drop by 30% or more.
- For businesses with an annual turnover of $1 billion or more, they will be eligible if annual turnover has already or is estimated to drop by 50% or more.
Registered charities will be eligible if they expect their turnover to fall by 15% of more during this period as compared to a comparable period.
Non-government schools and private vocational education providers are eligible, so long as they fit the above criteria.
From 28 September 2020, eligibility for the JobKeeper Payment will be based on decline in actual turnover in the following relevant periods:
|28 September 2020 to 3 January 2021||Actual GST turnover in the June and September quarters 2020|
|4 January 2020 to 28 March 2021||Actual GST turnover in each of the June, September and December quarters 2020|
Who isn’t eligible?
Governments and their agencies are not eligible to receive JobKeeper payments. This includes the Federal, State and Territory, foreign and local governments.
From 20 July 2020 Childcare providers and employees will be ineligible for JobKeeper payments.
How do you apply?
From 30 March 2020, businesses and not-for-profits can apply for JobKeeper payments at ato.gov.au. Employees do not need to apply. An employer who applies for a JobKeeper payment that relates to you is required to inform you.
To find out more, click here.
Income support and the coronavirus supplement
A temporary coronavirus supplement has been created by the Government that will be paid to eligible individuals at a rate of $250 a fortnight until 31 December 2020. This is on top of other Government income support they may already receive.
How does it work?
To allow more people experiencing loss of work hours to be able to receive financial assistance during the coronavirus, access conditions to the following income support payments have been broadened:
- Youth Allowance
- Parenting Payment (partnered and single)
- Farm Household Allowance
- Special benefit recipients
Who is eligible and what are you eligible for?
The Government is trying to reduce the impact of the coronavirus on the economy and individuals as much as possible. You may find you are now eligible for a government payment, even if you haven’t been before.
If you are already receiving one of the above income support payments, you are eligible for the fortnightly supplement
You will be eligible for the Jobseeker or Youth Allowance payments and the coronavirus supplement if you meet the income test and as a result of the economic downturn caused by the coronavirus, have found yourself:
- Stood down from a role where you were a permanent employee; or
- A sole trader of self-employed who has lost income; or
- A casual worker or contract worker and have seen your income cease.
The Government waived its usual assets tests for Jobseeker, Youth Allowance or Parenting Payments until 25 September 2020. The assets test and the liquid assets waiting period now apply again, however the Newly Arrived Resident’s Waiting Period and Seasonal Work Preclusion Period restrictions will continue to be waived.
Find out more about the Government’s income stream support here.
Temporary early access to super
As part of this early access scheme, you may be able to withdraw up to $10,000 from your super tax free before 31 December 2020, provided you meet eligibility requirements.
Up until now, superannuation was not available to be accessed prior to retirement, except in cases of extreme financial hardship. The superannuation system was not developed for super to be taken out at a younger age, as the investments made by super funds are designed for the long-term to see the best possible growth occur. It’s important to keep this in mind when considering accessing your super and be aware of the impacts that this may have on your retirement income. See what withdrawing your super can mean for you here.
Social Security Waiting Period and Liquid Assets
As part of its COVID-19 economic package the Federal Government made changes to the Social Security system to temporarily waive the Liquid Assets Waiting Period (LAWP). This is the waiting period before you can receive payments such as JobSeeker, youth allowance, Austudy and sickness allowance. The LAWP is a period of between 1 and 13 weeks that you may have to wait depending on your level of liquid assets, such as cash in the bank.
The Government waived the LAWP from 25 March until 24 September so people can access benefits quickly. If you already receive benefits, the waiting period does not resume after the 24 September.
However, from 25 September new applicants for the social security payments , including new JobSeeker applicants, are required to serve a waiting period of between 1 and 13 weeks prior to receiving social security payments. Money obtained from the early access to super scheme which is held by you will be included in the calculation of liquid assets which will determine the waiting period.
Further information on the LAWP can be found here.
How do I know if I’m eligible?
You are eligible for the temporary early access to super scheme if you are an Australian citizen or permanent resident of Australia and New Zealand and:
- are unemployed; or
- receive certain government payments and allowances; or
- were made redundant or have had their hours reduced by 20% or more on or after 1 January 2020; or
- are a sole trader who has had to suspend their business or has experienced a reduction in turnover of 20% or more since 1 January 2020.
If you believe you meet the above criteria and are considering the scheme, we suggest contacting your superannuation fund directly to discuss your options with them. You can apply for the scheme through your MyGov account.
You may be eligible to access some of your super or receive an income stream from your super without making an application. Check here for further details.
How do I apply?
You can apply for this scheme directly through your MyGov account. There have been reports of third party companies approaching people offering to assist them in taking their super out; please be wary of these schemes, particularly if they request a fee.
Your Industry SuperFund is here to help you and your future in retirement. Find out how your fund is responding to COVID-19, or to contact them directly, click on their link below.