As Australia’s economy is left reeling from the flow-on effects of the coronavirus pandemic, the Federal Government has unveiled a suite of new measures designed to soften the blow.
The $66 billion package includes relief for retirees, and a “safety net” for workers already bearing the brunt of the crisis.
With no end in sight, it’s sure to be a welcome relief for those who’ve been calling for a lifeline.
But what do the new measures actually mean for your pay packet? And who is set to benefit?
1. Casuals and sole traders
If you’ve found yourself affected by the economic downturn, you’ll be able to access a “coronavirus supplement” of $550 a fortnight for the next six months.
That’s on top of other benefits — so if you’re already receiving payments through Jobseeker (formerly known as Newstart), you can claim both.
Sole traders and casual workers who are currently making less than $1,075 a fortnight will be eligible to receive the full supplement.
In practice, that means if you’re a single parent (receiving a maximum fortnightly payment of $612 through Jobseeker), for example, and you meet the criteria, you’ll take home about $1,162 a fortnight.
“This means anyone eligible for the maximum Jobseeker payment will now receive more than $1,100 a fortnight, effectively doubling the Jobseeker allowance,” Treasurer Josh Frydenberg said.
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’re not eligible to receive the coronavirus supplement, you could still be able to claim a $750 stimulus payment.
The payment will be made automatically from July 13 to about 5 million Australians, including those receiving the age pension, a carers allowance or family tax benefit and Commonwealth senior card holders.
That’s in addition to a separate $750 stimulus payment announced earlier this month.
“This is clearly saying that we expect this to go on for some time and we know that those vulnerable groups may need additional income support during those periods,” Prime Minister Scott Morrison said.
“Yes, it will provide some sort of support for the economy, but it will also provide some very real financial support for the most vulnerable in our community.”
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 beginning of May, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent.
To put things in 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.
According to the Government, the change will benefit around 900,000 income support recipients, including age pensioners, and is estimated to cost $876 million over the forward estimates period.
4. Employers who want to keep staff
Not-for-profits and small businesses with a turnover under $50 million will receive a tax-free cash payment of up to $100,000 to help them retain staff and continue operating.
The Government expects 690,000 businesses employing 7.8 million people and 30,000 not-for-profits will be eligible for measures in the stimulus package.
It doesn’t mean extra pocket money if you’re an employee, but by linking the payments to staff wage tax withholdings, businesses will be given an incentive to hold on to more of their workers.
“We know that small businesses are enormously resilient but this is really hurting them,” Mr Morrison said.
“Whether it is a coffee shop or mechanic or hairdresser… by providing at a minimum $20,000 and up to $100,000 for small businesses who employ people, [it] gives them a chance to get to the other side.”
Expect more to come…
An important thing to keep in mind is that this is the second suite of measures announced by the Government in just a matter of weeks.
The first, announced on March 12, also included one-off cash payments for welfare recipients, and changes to welfare payments for casual workers who contracted COVID-19 or had to isolate themselves.
In announcing Sunday’s package, Mr Morrison himself warned that it would not be his “last visit to these podiums”.
“There will be more packages and more support,” he said.
“There will be more issues that even now have not presented themselves or could not even be conceived at this point.”
So, if you’re doing it tough, expect more measures in the near future.
What the experts are saying about coronavirus:
- Coronavirus ‘cures’ and preventions around the world: experts look at what they are, and if they work
- ‘Go home and you isolate and you obey those rules’: Chief Medical Officer warns of steep growth in cases