Coronavirus Stimulus Package Summary
Over the weekend the Government announced its economic responses to the Coronavirus in the form of a $189 billion economic stimulus package. This package aims to protect the economy by maintaining confidence and providing timely support to affected workers, businesses and the broader community. It is also designed to position the Australian economy to recover strongly once the health challenge has been overcome.
The key messages from their most recent announcement include:
Casuals & Sole Traders
If you have found yourself affected by the economic downturn, you may be able to access a coronavirus supplement of $550 a fortnight for the next 6 months. This will be in addition to any other benefits you may be currently receiving through Jobseeker (formerly known as Newstart). Notably, asset tests and waiting periods will not apply to access this supplement.
This means anyone eligible for the maximum Jobseeker payment will now receive more than $1,100 a fortnight, effectively doubling the Jobseeker allowance.
Sole traders or casual workers who have had their income or hours reduced by 20 per cent or more as a result of coronavirus will also be able to access to up to $10,000 of their superannuation tax-free.
If you are not eligible to receive the coronavirus supplement, you could still be able to claim a $750 stimulus payment.
The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. These payments will help support households to manage the economic impact of the Coronavirus.
The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020.
Deeming rates will be reduced by a further 0.25 percentage points to reflect the latest rate reductions by the RBA, which follows similar cuts made earlier this month.
This is important because deeming rates are used for the pension income assessment, and therefore affect how much someone will receive through their pension.
From the 1 May 2020, the lower deeming rate will be 0.25% and the upper deeming rate will be 2.25%.
To put this into perspective, when deeming rates were reduced by half a percentage point in the first stimulus package, National Seniors estimated age pensioners would receive on average an additional $219 per year.
The Australian Government is supporting Australian businesses to manage cash flow challenges and retain employees. Assistance includes cash flow support to businesses and temporary measures to provide relief for financially distressed businesses. This will include, but not limited too:
- For Small business and not-for-profits, with aggregate annual turnover of under $50 Million, the Government is providing up to $100,000 to eligible businesses that employ people, with a minimum payment of $20,000. These payments will help businesses and not-for-profits with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
- Similarly, for small businesses to retain their apprentices and trainees, eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
- The establishment of a scheme to guarantee 50% of new short-term unsecured loans to SMEs. The Scheme will guarantee up to $40 billion of new lending. This is in addition to the $90 Billion of funding being made available by the Reserve Bank to Australian Banks.
We understand this is an unprecedented time, but with the economic stimulus packages that have been announced to date, we do believe it will provide some timely support to affected workers, businesses and the broader community.