Stimulus Package – Social security

On 22 March 2020 the Government announced the second of their stimulus packages to support Australia through the economic consequences of the Covid-19.

Social Security measures

750 cash payments

Two payments of $750 each will be paid to eligible income support recipients and concession cardholders. The first tax-free payment will be available to eligible income support recipients as at 12 March 2020 and is expected to be automatically paid to eligible recipients from 31 March 2020. The second payment will be available to those who aren’t eligible for the Coronavirus supplement (see below) and will be automatically paid from 13 July 2020.

Eligibility for payment one

To be eligible, you must be residing in Australia and receiving one of the income support payments, or a holder of one of the concession cards listed in the table below. However, in relation to the first $750 payment, you must also have been receiving an income support payment on 12 March 2020. If you had applied for an eligible payment before 12 March 2020 and are subsequently granted the payment, you will also be eligible for the one-off payment.

Coronavirus Supplement

The Coronavirus supplement of $550 per fortnight will be paid to new and existing recipients of:

  • JobSeeker Payment
  • Youth Allowance (Jobseeker)
  • Parenting Payment
  • Farm Household Allowance, and
  • Special Benefit.

The supplement will be paid over the next six months and will be paid automatically with the person’s ordinary fortnightly entitlement. It will be paid from 27 April.

Existing social security recipients

  • Recipients of Carer Payment who are impacted will not have their benefits changed.
  • Child Care Subsidy: if your child cannot attend childcare as a result of COVID-19, but you’re still charged a fee from your childcare provider, you may still receive the subsidy for up to 42 days of absence. This applies also to non-COVID-19 related absences. If your activity hours change, you don’t need to update your activity tests where it is due to a requirement to self-isolate, or if you’re on leave.
  • Newstart or Jobseeker: Recipients with mutual obligations (for example Newstart or Jobseeker recipients who usually need to be actively looking for work, volunteering, or doing some paid work) will be provided flexible options to ensure your safety. This may apply where you’re unable to satisfy these requirements because you’re self-isolating, or you’re a primary carer, caring for a child whose school has closed, or a disabled adult whose day service closes. You may receive an exemption from this requirement without a need for medical evidence.
  • Youth Allowance (student): Activity requirements for study will be amended. This means that if you’re a student and you’re unable to attend studies due to the virus, you may be exempt from meeting this requirement.
  • Students and trainees: If you’re self-isolating at home or your education provider closes or reduces your study load, your payment won’t change. You must remain enrolled in study and have a plan to return and must tell Centrelink if this doesn’t apply to you.

If you’re already receiving a particular benefit or payment and your circumstances change due to COVID-19, your benefit may remain unchanged. However, a change in circumstances that is not a result of COVID-19 will be assessed under the ordinary rules, and may impact your entitlement. All changes should be reported to Centrelink or DVA.

Applying for a benefit

If you’re unable to work, are in isolation or hospital, or you need to care for children as a result of COVID-19, you may be eligible to apply for a payment.
If you apply for a social security benefit or concession card and your claim is related to COVID-19, some of the ordinary eligibility rules may be waived. Also, if you’re an employee, and you are diagnosed with COVID-19 or are in isolation, you may be eligible for an income support payment if you have no employer leave entitlements.

Waiting periods and assets testing

The ordinary one week waiting period that applies to some payments will be waived when you’re claiming because you’re impacted by COVID-19. The Liquid Assets Waiting Period (LAWP) will also be waived if you’re entitled to the Coronavirus Supplement. If you’ve already applied for a payment and are currently serving a LAWP, you won’t need to serve the remainder of the waiting period. This applies also if you’ve applied for a payment which is eligible for the Coronavirus Supplement.

The Income Maintenance Period and Compensation Preclusion Periods will continue to apply.

The assets test will also not be applied when determining entitlement to JobSeeker Payment, Youth Allowance (Jobseeker) and Parenting Payment for six months. The income test will continue to apply and may reduce the amount of the payment you’re eligible for.

To access these measures, recipients of JobSeeker Allowance and Youth Allowance (Jobseeker) cannot be receiving employer benefits (such as sick leave or annual leave payments) or income protection payments at the same time.

Reduction in deeming rates

A further reduction in deeming rates was announced on 22 March. The deeming rates will reduce as follows:

Current From 1 May 2020
Lower deeming rate 1.0% 0.25%
Upper deeming rate 3.0% 2.25%

The deeming thresholds are unchanged at $51,800 (single) and $86,200 (couple) which are generally indexed on 1 July each year. The rates will take effect from 1 May 2020, and any additional entitlement will be paid from 1 May 2020.

Other measures

Additional measures announced include:

  • Support for regions and communities impacted by the virus with reliance on tourism, agriculture and education
  • Administrative relief provided by the ATO for certain tax obligations, such as lodging tax returns and activity statements, which will be assessed based on individual circumstances, and
  • Comprehensive health package of $2.4 billion.
  • You may wish to contact the ATOs Emergency Support Infoline on 1800 806 218 or COVID-19@taxissues@ato.gov.au.