Income support changes and COVID-19
We all know that money is not everything, but it certainly is a necessity to keep life going, particularly during this current COVID-19 climate.
With the changes to the COVID-19 income support provided by the Government, our Financial Counselling team are today sharing how these changes may affect you in this “Make it Count” blog.
“These changes may impact people who are receiving or seeking to receive this assistance,” said Southcare’s Financial Counsellor Duncan Edgar.
Originally, the COVID-19 Supplement was $550 per fortnight, but has now been reduced to $250 per fortnight. It affects those who currently receive income support payments from Centrelink including:
- JobSeeker Payment*
- Partner Allowance
- Widow Allowance
- Sickness Allowance
- Youth Allowance
- ABSTUDY Living Allowance
- Parenting Payment
- Farm Household Allowance
- Special Benefit
*JobSeeker recipients may be able to earn up to $300 per fortnight before their payments will be affected, but if the earnt income exceeds $300 per fortnight then the income will reduce by 60 cents for every dollar earnt over this amount.
“In addition to the reduced payment of JobSeeker, there may be an increase in demand for financial counselling and support in the coming weeks with the JobSeeker cuts,” Duncan said.
The JobKeeper subsidy was a temporary financial scheme to support businesses covering employees’ salaries and wages by providing a fortnightly payment of $1,500. From this month, businesses are now required to re-test their eligibility to determine if they can still receive the benefits.
“Moving forward there are a number of changes that people need to be prepared for, with the available funds gradually declining over a period of months,” Duncan said.
Fortnightly payments are now reduced to $1,200. For people working less than 20 hours per week, the payment is $750 per fortnight.
From January 4, 2021, the payment will further reduce to $1,000 per fortnight. For people working less than 20 hours per week, the payment will be $650 per fortnight.
On March 28, 2021, the fortnightly payment will end altogether.
“People need to be aware that no superannuation payments are required to be paid in addition to these payments,” Duncan said.
Accessing your superannuation is also an option right now but there are conditions that need to be met. You need to be either unemployed or current recipient of JobSeeker, Youth Allowance for JobSeeker, Parenting Payment or Special Benefit.
If you are eligible, you will be able to withdraw up to $10,000 from your superannuation between July 1 and December 31, 2020.
Since January 1, 2020, you will also be eligible if:
- You have been made redundant
- Your income has reduced by more than 20%
- You are a sole trader with turnover that has dropped by 20% or more.
- Meet all the criteria? You can apply through the ATO via MyGov to request for an early access to your superannuation.
“It is equally important to note that there are significant fines in place if you are found to have made an early withdrawal of superannuation without meeting the eligibility criteria,” Duncan said.
Southcare provides a free and confidential financial counselling service, offering advice to help you manage during difficult financial situations.