As the impact of the coronavirus on our daily lives and livelihoods rapidly evolves, below are the latest measures released by the Government to reduce both the impact to the nations health, economy, household and business finances.
At times like these it’s important to have someone to talk to, so we urge you to contact us if you have concerns about your finances.
As part of the measures taken by the government to support those impacted by COVID-19 some people will be able to access up to $10,000 of their super between now and 1 July 2020, with a further $10,000 in the first three months of the 2020-21 financial year, tax free.
Those who are eligible include the unemployed, people receiving JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit. People who’ve been made redundant, had their work hours reduced by 20% or more or sole traders whose turnover has reduced by 20% or more since 1 January this year are also eligble.
Applications can be made online from mid-April by using myGov. Members will self-certify that they satisfy the eligibility criteria.
While this provides an additional safety net for individuals and families who face the loss of a job or a significant fall in income, we do urge our clients to consider accessing their super as a last resort.
Taking a chunk out of your retirement savings now, after a big market fall, would not only crystallise your recent losses but it also means you would have less money working for you when markets recover.
So before you do anything, speak to us and we can help you review other income support measures that may be applicable to your situation.
As part of the Government’s series of measures to support the economy and individuals through the Coronovirus crisis, Newstart recipients, age pensioners and veterans are being provided with a one-off payment of $750.
These payments started flowing into the bank accounts of 6.5 million (mainly) lower-income Australians from March 31.
While most working Australians won’t receive this payment, this type of tightly targeted payment will provide maximum bang for buck in terms of stimulating the economy.
Pensioners have also received additional support. On top of the $750 payment announced on March 12, an additional $750 will be paid to any eligible recipients, as at 10 July 2020, receiving the Age Pension, Veterans Pension or eligible concession card holders.
If you have any questions about your entitlements to government payments, please don’t hesitate to call.
Information in this article has been sourced from https://treasury.gov.au/coronavirus/households
Federal Government’s second support package announced March 22, flicked the switch to more income support for retirees.
Retirees affected by falling superannuation balances and deeming rates out of line with historically low interest rates have been offered some reprieve.
In addition to the cut in pension deeming rates announced in the first stimulus package, the Government has cut deeming rates by a further 0.25 percentage points.
Deeming rates are the amount the Government ‘deems’ pensioners earn on their investments to determine eligibility for the Age Pension and other entitlements, even if that rate is lower than they actually earn.
This move will bring deeming rates closer in line with the interest rates pensioners are receiving on their bank deposits, especially those with lower balances.
From 1 May 2020, deeming rates will fall to 0.25 per cent on investments up to $51,800 for singles and $86,200 for couples. A rate of 2.25 per cent will apply to amounts above these thresholds.
|Investment value||Deeming rate||Investment value||Deeming rate|
|Up to $51,800||0.25%||Up to $86,200||0.25%|
|Over $51,800||2.25%||Over $86,200||2.25%|
Federal Government’s second support package announced on March 22 offered assistance for self-funded retirees.
Minimum drawdown rates for account-based pensions and similar products will be halved for the 2020 and 2021 financial years. This means retirees will be under less pressure to sell shares or other pension assets in a falling market to meet the minimum payments they are required to withdraw each financial year.
The new rates are in the table below:
|Age of member||Default minimum drawdown rates|| Minimum drawdown rate for the 2019-20 and 2020-21 income years
|95 or more||14%||7%|
Contact us if you’d like to discuss what these changes will mean for your income in retirement.
Information in this article has been sourced from the Treasury website: https://treasury.gov.au/sites/default/files/2020-03/factsheet6providingsupportforretireestomanagemarketvolatility-25march2.pdf
This Newsletter provides general information only. The content does not take into account your personal objectives, financial situation or needs. You should consider taking financial advice tailored to your personal circumstances. We have representatives that are authorised to provide personal financial advice. Please see our website https://superevo.net.au or call 02 9098 5055 for more information on our available services.