(00:00): The Australian government is providing financial assistance to Australians who’ve been affected by the coronavirus pandemic. This assistance includes income support for individuals, payments to support Australian households, temporary earlier release of superannuation, temporarily reducing income stream minimum draw down rates and reducing social security deeming rates.
(00:33): Income support for individuals will be provided in the form of a coronavirus supplement. Over the next six months, the government is temporarily expanding eligibility to income support payments and establishing a new time-limited coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of Job seeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Allowance, and special benefits.
(01:04): The Australian government is also providing payments to support Australian households in the form of two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made on the 31st of March, 2020, and the second payment will be made on the 13th of July, 2020.
(01:27): Around half of those that will benefit, our pensioners. This payment will help to support confidence and domestic demand in the economy. The second payment will not be made to those eligible for the coronavirus supplement.
(01:42): The government is also allowing for temporary early release of superannuation. Those affected by the coronavirus pandemic can access up to $10,000 of their superannuation in 2019/2020 financial year and a further $10,000 in the 2020/2021 financial year. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centerlink or Veterans’ Affairs payments.
(02:10): Income stream drawdown rates will also be temporarily reduced in products such as account-based pensions by 50% of the 2019/2020 financial year, and the 2020/2021 financial year. For example, a retiree between the ages of 65 and 74 will no longer be required to draw 5% of their account-based pension valuation, this and next financial year. This will reduce by half to two and a half percent. This measure will benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements.
(02:45): Social security deeming rates will also be reduced in order to reflect the low interest rate environment we’re currently in. On the 12th March, the government announced 0.5% reduction in both upper and lower social security deeming rates. The government will now reduce these rates by another 0.25 percentage points. As of 1st of May, 2020, the upper deeming rate will be 2.25%, and the lower deeming rate will be 0.25%. The reductions reflect the low interest rate environment and its impact on the income from savings.
(03:17): The change will benefit income support recipients, including age pensioners who will on average receive $105 more for the Age Pension in the first full year, the reduced rates apply.
(03:29): If you’d like more information on the coronavirus Australian Government Stimulus packages, for individuals or businesses, please contact your [inaudible 00:03:36] financial services advisor.
(03:29): If you’d like more information on the coronavirus Australian Government Stimulus packages, for individuals or businesses, please contact your [inaudible 00:03:36] financial services advisor.
(03:39): Fact sheets for these payments are available on Treasury’s website at treasury.gov.au/coronavirus.
