Update: COVID-19 economic response measures

Just over a year ago, we first started covering the COVID-19 pandemic, providing both health and Government economic response related information.

Over the months we have covered off on many of the Government’s economic response measures—including policies implemented by the Government to support individuals, households and businesses, and the flow of credit.

This article provides a brief status update on several of these COVID-19 economic response measures from both an individual and a household personal finance perspective.

COVID-19 economic recovery measures

COVID-19 early release of super

The COVID-19 early release of super, a temporary condition of release introduced to provide support (another possible financial resource) to individuals affected by COVID-19, has now ended (on 31 December 2020).

For more information on the COVID-19 early release of super, please click here.

Economic support payments

The fourth and final (as announced to date) economic support payment for certain eligible income support recipients was paid by Services Australia or the Department of Veterans’ Affair from 1 March 2021.

For more information on the economic support payments, please click here.

JobKeeper Payment program

The JobKeeper Payment program, a wage subsidy to support employees and businesses affected by COVID-19, has now ended (on 28 March 2021).

Please note: As advised by the ATO, monthly business declarations for JobKeeper Fortnights in March need to be completed by 14 April 2021 to receive final JobKeeper payments.

For more information on the JobKeeper Payment program, please click here.

Paid Parental Leave extended work test

The Paid Parental Leave work test period extension (from 392 days before the birth or adoption of a child, to 600 days) to support parents affected (employment-wise) by COVID-19, has now ended (on 31 March 2021).

Please note: The work test period extension was available to parents if:

• they didn’t meet the standard work test because their employment hours were reduced, or they stopped work, due to COVID-19; and
• their child’s birth or adoption was between 22 March 2020 and 31 March 2021.

For more information on the Paid Parental Leave work test period extension, please click here.

HomeBuilder program

The HomeBuilder program, a grant to support owner-occupiers (including first home buyers) build a new home or substantially renovate an existing home, has now ended (on 31 March 2021).

Please note: While contracts must have been signed on or before 31 March 2021, applications for the HomeBuilder grant may be submitted up to 14 April 2021.

For more information on the HomeBuilder program, please click here.

Coronavirus Supplement

The Coronavirus Supplement, an additional temporary financial assistance supplement for certain eligible income support recipients, has now ended (on 31 March 2021).

For more information on the Coronavirus Supplement, please click here and also see below under Other important social security updates.

Shortcut method

The temporary shortcut method, a simplified arrangement for calculating home office expenses introduced by the ATO to support employees working from home, continues to be available for the 2020-21 financial year.

Please note: In terms of the 2019-20 financial year, an employee will need to use one of the other deduction methods in relation to working from home before 1 March 2020 (e.g. 1 July 2019 to 29 February 2020).

For more information on the shortcut method, please click here.

Minimum pension drawdown requirement

The temporary reduction in the minimum pension drawdown requirements to support retirees continues to apply for the 2020-21 financial year. As it stands, the minimum pension drawdown requirements are:

For more information on the minimum pension drawdown requirements, please click here.

Social security deeming rates

The reduction of deeming rates to support income support recipients (inclusive of Age Pensioners), continues to apply. As it stands, the social security deeming rates are:

• The lower deeming rate is 0.25%, which applies to the first $53,000 of financial assets for a single person (the first $88,000, for a couple*).
• The upper deeming rate is 2.25%, which applies to financial assets in excess of $53,000 (in excess of $88,000, for a couple*).

*A combined threshold of $88,000 applies when at least one member of a couple receives a pension, otherwise the threshold is $44,000 for each member of a couple.

For more information on the social security deeming rates, please click here.

Other important social security updates

On 22 March 2021, the Social Services Legislation Amendment (Strengthening Income Support) Bill 2021 passed through the parliamentary process and became law.

Here is a summary of several of the changes contained within the Bill, which took effect from 1 April 2021:

• The maximum basic rates of working-age social security payments will be permanently increased by $50 per fortnight. The working-age social security payments include JobSeeker Payment, Youth Allowance, Youth Disability Support Pension, Parenting Payment and Austudy.
• The income free area for JobSeeker Payment, Youth Allowance (Other), Parenting Payment (Partnered) and related payments will be permanently set at $150 per fortnight. It’s also worth noting that:
  • the two-tier income test reduction will be reintroduced, for example:
    • JobSeeker Payment and Parenting Payment (Partnered) will taper at $0.50 per $1 of income between $150 and $256, then at $0.60 per $1 over $256.
    • Youth Allowance (Other) will taper at $0.50 per $1 of income between $150 and $250, then at $0.60 per $1 over $250.
  • there will be no annual adjustment (in line with movements in the CPI) of the income free area.
• The following temporary COVID-19-related social security measures will be extended to 30 June 2021:
  • The qualification for recipients of JobSeeker Payment and Youth Allowance (Other) in situations where an individual is required to quarantine or self-isolate due to COVID-19;
  • The waiver of the ordinary waiting period for JobSeeker Payment, Parenting Payment and Youth Allowance; and
  • The portability period for certain Age Pensioners and recipients of the Disability Support Pension (for severely disabled persons).

For more information on these social security updates, please click here.

If you have any questions regarding this article, please contact us.