Second lot of Coronavirus stimulus package

As we all are preparing for a great change in our lives with lock-down introduced by our governments, today I want to confirm for you the second part of the stimulus package provided to Australians.

This is part of the support provided to private people, workers, retirees, and households.

 Income Supplement for 6 months

1. $550.00 per fortnight supplement for the period of the next 6 months will be paid if you are receiving the following payments:

• Job Seeker payment
• Youth Allowance
• Parenting payment
• Farm Household allowance
• Special Benefit

 Benefits for retirees under the stimulus package

1. $750 bonus payment I was talking about last time will be doubled to all Centrelink and Veterans Affairs support recipients and eligible cardholders such as:

• Pensioner Concession Card
• Commonwealth Seniors Card
• DVA Gold Card

The first lot of $750 is to be paid on 31 March and the second lot on 1 July 2020.

This is the second time we are seeing this measure being taken, the first time was during GFC. You can reduce your pension draw-down by 50% in 2019/2020 & 2020/2021 financial year.

So what does that mean?

Pension funds have strict rules set up by our government and one of those rules is the amount of the minimum income that a pension fund is required to pay to a member annually. The calculation is being done by the super fund at the beginning of each financial year and then provided to the member.

Now, due to the outbreak, and market behaviour (reduction), this payment can be reduced by 50% to preserve your assets within the pension account and to ensure your money can grow back when the virus is over and we return to normality and markets start to rebound and to grow again.

Deeming rates are being reduced by a further 0.25% to reflect the latest cash rate reduction by the Reserve bank, making it the lower deeming rate of 0.25% and upper deeming rate of 2.25%

 Access to super savings

1. The government also allows access to superannuation savings if you are financially stressed due to COVID-19,

• Limit of $10,000 this financial year and another $10,000 next financial year. Those withdrawals will be tax-free and available to recipients of the coronavirus supplement as well as sole traders, who have seen their working hours, or their income reduced by 20% as a result of the coronavirus outbreak.

 Aged Care

• Direct care workers will receive payments of up to $800 after tax per quarter for 2 quarters
• In-home carers will receive payment of up to $600 after tax per quarter for 2 quarters
• Over $90M paid to home care providers and organisations, e.g. Meals on Wheels to offer services for people in self-isolation such as shopping and meal delivery.
• Other assistance for Aged Care institutions to allow them providing proper services to Aged Care residents.

It is great to see our government taking initiatives in fiscal policies to support the most vulnerable part of our community, but also forward planning to assist ongoingly Australian economy not to stagnate and hopefully to void any type of a recession.

Please take care and stay safe 😊

by:  Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement