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Insights

March 24, 2020

Government Stimulus Package for Individuals

Published by:
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James Morris
Government Stimulus Package for Individuals

The Government have announced a number of relief measures to support Australians in response to the impact COVID-19 is having on our community and economy.  Attempting to put some money back in to the pockets of Australians, below is an outline of what has been proposed.

Income Stream Drawdown Rates

The Government has introduced a temporary reduction in the minimum annual withdrawal amount from your super income stream, reducing the need for some to sell down assets when markets are low. The rates outlined below will apply for the duration of this and next financial year.

Minimum Pension Payments
AgeCurrentNew
Less than 65

4%

2%

65-745%2.5%
75-796%3%
80-84

7%

3.5%

85-899%4.5%
90-9411%5.5%
95+14%7%

 

Access to Superannuation Savings

Access to superannuation savings eligibility conditions have been broadened to those in financial distress as a result of the impact of COVID-19.  To be eligible to access super savings, one of the following conditions must be met:

  • You are unemployed
  • You are able to receive the following payments:
    • Jobseeker
    • Youth allowance
    • Parenting payment
    • Special benefits or Farm Household Allowance
  • On or after 1 January 2020, you were:
    • Made redundant,
    • your hours of work were reduced by at least 20%, or
    • if you’re a sole trader, your business was suspected or your turnover reduced by at least 20%

In the case of meeting one of the conditions above, up to $10,000 may be withdrawn before 30 June 2020. And an additional $10,000 from 1 July 2020 (A three month withdrawal window is expected to apply).

Claims are likely to be available from mid-April via the MyGov site, with certification required by the ATO, confirming that one of the above criteria has been met. On confirmation, the ATO will issue you and your super fund a determination that the withdrawal can be paid.

When will these initiatives be implemented?

With the COVID-19 situation rapidly changing, the Government intent to implement many of the stimulus measures as soon as possible. Parliament has met this week with the Bills passed as legislation to give effect to each proposal.

Supporting you through the changes. From making the most of the stimulus initiatives, through to managing the risks associated with the impact of the Coronavirus, the Modoras team is here to help you build a resilient business. Make well-informed business decisions; contact us on 1300 888 803 book a catch up with a Modoras professional.

IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (VIC) Pty Ltd ACN 145 368 850. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (VIC) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (VIC) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (VIC) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (VIC) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.

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