JobSeeker payment (previously Newstart) and Coronavirus supplement
On the 22 March the Federal Government announced changes to Newstart (now named JobSeeker payment) and the introduction of a Coronavirus Supplement of $550 a fortnight that will be available from the 27th of April. Below is a summary of the how the entitlements will work.
Between today and 13 April
Between April 14 and April 27
- People who are unemployed or have seen their income drop below the threshold can access the normal JobSeeker payment – this is the old newstart and remains at the previous level of $565.70 a fortnight for a single person with no children (dependent on income and family circumstances). They will also receive the first lump sum $750 payment from Government which will be delivered from 31 March (through to 13 April as people sign on)
- People will still have to provide proof they have been let go from their job (Employment Separation Certificate) if applicable.
- The ordinary waiting period has been waived (which is one week) but the Liquid Assets Waiting Period (scales with savings from 1 week at $5,999 in savings up to 13 weeks for $11,500 or more in savings) still applies. This requires people with significant savings to wait for payments
- All asset tests still apply.
- Revised mutual obligations (4 jobs per month)
After April 27
- All the above applies but you will not receive the first $750 payment.
- In addition to the Jobseeker payment an additional $550 per fortnight Coronavirus supplement begins to be paid all eligible recipients (This will also be paid to those receiving sickness allowance, youth allowance, parenting payment, partner allowance, special benefit and the farm household allowance) for 6 months
- Asset tests, liquid asset waiting period, proof of dismissal are all waived for 6 months. Anyone serving one of these waiting periods gains access to the system.
- Special eligibility for sole traders and the self-employed, which allow them to satisfy mutual obligation through the continuation of their business, begin for 6 months.
- If you are eligible for the Coronavirus supplement then you are NOT eligible for the second $750 lump sum payment.
- Revised mutual obligations (4 jobs per month)
This is general guidance only and was correct at the time of writing 09:00 24/03/2020. Check government sources for more details.
Temporary Early Access to Superannuation
The Government has legislated to provide for some people to access super early. Accessing your super in times of financial hardship should be a last resort. This is a step which should only be taken by workers if all other ways of getting income support are exhausted. If you are unclear of what measures you could take, you can talk to your union or visit the Services Australia website to find what payments you qualify to access. You may also have an insurance policy in your fund to protect against loss of income. Contact your fund to help you determine if you have income protection insurance you can access.
Your super balance is probably lower now than it has been over recent times, due to the significant drop in financial markets. Your super fund still holds the same assets as when your balance was higher, just now the value of those assets has temporarily fallen. In most cases if you cash out now, you’re locking in your losses.
If you take out too much of your super you may lose your insurance. Most people have life insurance, total and permanent disability insurance and sometimes income protection insurance with the super fund. If you withdraw too much, you may fall below the insurable level. Each fund has different rules on this, and which kick in at different minimum account balance thresholds. Make sure you consult your fund about this prior to taking any action.
Taking super out of your account during your working life has a huge impact on your retirement. In the example below, two people in the same circumstances, one withdraws now rather than leaving their super invested. June, who took her super early, would be $37,000 worse off in retirement.
Comparing the pair
Industry Super Australia Retirement Income Projector
|June, 25, $20,000 in super, earning $60,000
|| Janice, 25, $20,000 in super, earning $60,000
|If June withdraws it all this year, she will retire with: $378,231.
|| If Janice does not withdraw her super, she will retire with: $415,348
If you are unsure about any of this, you should consider speaking to a financial advisor or a financial counsellor. You may be entitled to discounted or free financial advice with your super fund. Accessing super early is a big decision, that can have life-long consequences and should be viewed as a last resort.
Workers are able to access $10,000 before 1 July and $10,000 after 1 July from their superannuation fund in two separate payments from mid-April through the ATO on www.my.gov.au.
Tax is not payable on the withdrawn amount and it will not affect other Government payments, like Jobseeker payments.
You are eligible if:
- You are unemployed
- You are receiving other Government benefits, job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
- Since 1 January 2020:
- You have been made redundant,
- Your working hours have been reduced by 20 per cent or more, or
- If you are a sole trader (ABN worker) and are experiencing a 20 per cent reduction in revenue.
To access early release of superannuation you must submit a declaration through www.my.gov.au
that you meet the above criteria.
You are also required to contact your fund, or your fund will contact you, to establish Proof of Identity
Your super fund will explain how to do this. You will also be required to tell your super fund your bank account details for them to deposit the funds in.
This is not financial advice and is not personal financial advice. Financial advice is specific to you and your circumstances, which may differ from that described above. If you are unsure about anything you have read, please contact your fund to direct you to a good-quality financial adviser. The information in this note is current as of 23 March 2020.