The Government have announced and legislated a number of stimulus and support measures designed to help Australians and businesses who are under financial stress as a result of the Coronavirus. Below we have summarised these measures, the edibility criteria and how the assistance can be accessed.
Assistance for Individuals
Early Release of Superannuation
The Government is allowing eligible Australians to early access of their superannuation savings. Under this measure, eligible persons can apply to withdraw up to :
- $10,000 of their superannuation in the financial year ending 30 June 2020, and
- A further $10,000 in the financial year ending 30 June 2021 (applications to be made between 1 July until 24 September 2020).
Individuals will not need to pay tax on amounts released. Furthermore, funds withdrawn from superannuation do not count towards any income, or means tests.
Who is eligible?
To be eligible for early release of your superannuation, you must satisfy one or more of the following requirements:
- You are unemployed
- You are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance
- On or after 1 January 2020, either:
- You were made redundant
- Your working hours were reduced by 20% or more
- If you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.
You will not be required to attach evidence to support your application, however you should retain records that confirm your eligibility.
How to apply
You can register you interest with the ATO by logging into your MyGov account and following the “Intention to access coronavirus support” instructions. The ATO will then notify you by email or SMS when applications for early access open.
Application for early release of superannuation can be completed via MyGov from Monday the 20th of April.
Withdrawing from your superannuation may affect the underlying insurance that you hold in your superannuation fund and will affect your fund’s ability to generate earnings for your retirement.
You should consult your financial planner for advice before applying for early release of your superannuation.
50% Pension Reduction
To assist retirees, the Government has reduced the minimum annual payment required for account-based pensions, annuities and allocated pensions. The minimum annual payment your need to receive has reduced by 50% for the 2020 and 2021 financial years. Please refer to the below table.
Standard Minimum Withdrawal
Reduced Rates for 2020 and 2021 financial years
65 – 74
75 – 79
80 – 84
85 – 89
90 – 94
95 or older
Who is eligible?
This measure is available to all Australian residents.
How to apply
You do not need to apply for this measure. The new minimum pension requirement is already in place. If you would like to take advantage of this measure, discuss with your provider about how to reduce your pension payments. You must ensure you meet the reduced pension rates as a minimum.
Please seek assistance from your financial adviser before you apply for an early release of superannuation or reduce your pension payments to ensure this is in line with your needs and objectives.