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COVID-19 Money Solutions

Coronavirus (COVID-19) has resulted in an unprecedented financial impact for many individuals, households and businesses.

Taking the initiative and getting the most out of your personal or business’ situation is essential, however navigating the everchanging Government policies, new lending rules, and various service provider offerings is hard.

The below COVID-19 money solutions tool provides you with information and simple actions for different scenarios in just a few clicks.

Individuals & Couples

Cash Flow

If your employment income has changed or you were already on a low income
Employees impacted by COVID-19 could receive a minimum of $1,500 per fortnight from their employer fully subsidised by the Government. This subsidy (provided to employers impacted by COVID-19) is passed on in full to employees, regardless of their working capacity (including if fully stood down) and even if they were earning less than $1,500 per fortnight previously. Take action If your income from employment has been impacted, or you are earning less than $1,500 per fortnight, you should talk to your employer about accessing the JobKeeper wage subsidy in full which they can pass on to you. The Victorian Government has also released a program called Working for Victoria to access new work opportunities. Click here for the Government factsheet (employees) Click here for the Working for Victoria information page
If you receive or may be eligible to receive an entitlement from Centrelink
Twenty-eight Centrelink payments and concession cards are eligible for additional  payments, which could include:
  1. Up to two tax-free payments of $750
  2. A tax-free fortnightly payment of $550 for six months
 The extra payments are not just for ‘JobSeekers’ and are in addition to the standard benefit.  Eligible individuals include; Age Pensioners, Commonwealth Seniors Health Card Holders, Parenting Payment and Carer Allowance recipients. Take action If you have not previously claimed your entitlement, taking action might be as simple as applying via myGov, given waiting periods and asset tests have been waived. If you were previously ineligible for Government entitlements due to your amount of assets or income (including that of your partner), strategic asset planning could help.  Chances of a successful claim have improved as deeming rates have been reduced, and the value of super, shares and property are likely lower (see Social Security section). Click here for the Government factsheet (Individuals) Click here for the Government factsheet (Households)
If your spouse is still working and you want to claim JobSeeker
The amount a spouse can earn before impacting an individuals eligibility for JobSeeker has changed. Take action Apply for JobSeeker via myGov. Click here for the JobSeeker Income & Asset Limits
If you have children
The Federal Government is providing funding to early childhood education and care centres from 6 April 2020.  To receive government funding, eligible childhood education and care centres must not charge families for care, so enquire with your relevant provider. The system will be reviewed after one month, with an extension considered after three months. Take action Talk to your childcare centre.  You may be eligible for this service regardless of your child’s childcare history. Click here for the Government media release
If you are pregnant
A work test exception exists for individuals who need to cease work due to pregnancy risks associated with COVID-19 under the Dangerous Job provisions.  This exception effectively changes the 13-month work test period to finish on the day that the person ceased work. Also, if your employer can’t pay you because of Coronavirus, Centrelink can pay you directly. Take action Contact Centrelink to discuss your eligibility. Click here for the Affected by coronavirus information page
If you are suffering severe financial hardship
An option to access superannuation funds of up to $20,000 is available for eligible individuals. Take action See the ‘Super & Retirement Income Streams’ section below for more information.
If you pay utilities
Many providers have waived late fees and introduced flexible payment options.  Also, the Victorian Government operates an independent comparison site.  You get $50 just for comparing your services. Take action Check with your providers for telecommunications, electricity, gas, water and council rates. Click here for the Vic Energy Compare website

Tax

If your income is likely to look different next financial year

As a result of COVID-19, many individuals will have a large variance of income between the current financial year (2019-20) and next financial year (2020-21).  Strategic tax planning will help you minimise your total tax over the next two years.

Take action

Contact your tax specialist ASAP to discuss potential strategies to minimise your tax.

If you have been made redundant

Those who have been made redundant may have an opportunity to manage tax on these payments; particularly before the end of the financial year.

Take action

Contact a financial adviser who can holistically consider taxation strategies while taking into account your holistic position.

If you are working from home

There are dozens of items that are claimable for individuals working from home.  These could include stationery, equipment and even a portion of your utilities and communications.

Take action

Appropriate actions could include keeping your receipts and completing a work diary; however, the best course of action is to check in with a tax professional before the end of financial year for activities tailored to you.

If you pay land tax on a property (Victoria)

Residential and commercial landlords may be able to access a 25% discount on land tax

and defer the balance of their 2020 land tax assessment until March 2021.

Take action

Check your eligibility by visiting the State Revenue of Victoria’s website.

Click here for the State Revenue Office of Victoria’s response to COVID-19

Super & Retirement Income Streams

If you want to access $20,000 from your super

From mid-April 2020, eligible individuals in financial stress will be able to access:

  • Up to $10,000 of their superannuation before 1 July 2020, and
  • A further $10,000 from 1 July 2020 until 24 September 2020.

The payments will be tax-free and will not impact a person’s Centrelink or Department of Veterans’ Affairs (DVA) entitlements.

Take action

The ATO processes applications for the early access to super policy.  Applications can be completed via the myGov website.

Consider discussing your options with a financial adviser or financial counsellor who can explain the consequences of accessing your super early and can provide alternative solutions.

Click here for the Government factsheet

If your income or your spouse's income has changed

Concessions to boost superannuation for individuals and their spouse have been in place for a long time.  These could come in the way of additional government contributions and tax concessions, particularly where an individual is a low-income earner.

Take action

Talk to your Financial Adviser about the tax advantages of contributing to your or your spouse’s superannuation account, particularly before the end of the financial year.

If you would like to make a contribution to super

Eligibility for particular contribution strategies is based on your total super balance (TSB).  These include:

  • Work test exemption contribution
  • Catch-up concessional contribution
  • Non-concessional contributions
  • Government co-contribution and Spouse contributions

A lower superannuation balance could provide an opportunity for individuals to contribute during the 2020-21 financial year.

Given the market downturn, there is a strong likelihood that a client’s TSB will be less than anticipated, come 30 June 2020. 

Take action

There can be significant advantages of contributing to superannuation, yet there are pitfalls if you do not understand the complex rules.  Get advice from a financial adviser before making a decision.

If you have an income stream (e.g. account-based pension)

The minimum pension payment required to be drawn will be reduced by 50% for the 2019/20 and 2020/21 financial years.  This will apply to most income streams, providing flexibility to retain more assets within the super environment while markets are down.

Take action

Contact your income stream provider who can outline their process to implement your instructions.  Your financial adviser can also assist you.

Click here for the Government factsheet

If you have ceased an employment arrangement (Over 60s)

A standard condition of release exists for individuals over 60 who cease an employment arrangement. 

Benefits include:

  • Complete access to superannuation benefits which in most cases are 100% tax-free upon withdrawal.
  • The ability to restructure super so that any future earnings or growth are in a tax-free environment.

Take action

If you are over 60 and have ceased an employment arrangement, consider the significant advantages of applying for a full condition of release from your super. 

It’s highly recommended that you speak to a Financial Adviser about potential strategies to maximise your opportunities.

If you don’t intend to return to work and have reached preservation age

Individuals who have reached preservation age and do not intend to return to work may have met a superannuation condition of release.  Eligible persons could benefit from additional flexibility and an opportunity to explore tax-effective strategies.

Tax action

If you don’t intend to return to work, discuss your situation with a financial adviser and/or your super fund.

If you were taking part in the First Home Super Saver Scheme (FHSSS)

The change in market conditions, and a person’s overall financial circumstances, may impact plans to purchase a home.  The ATO now provides an automatic 12-month extension to those who have withdrawn under the scheme.

Take action

If you have contributed to super, intending to access funds to purchase a home or recently withdrawn funds, you should contact a financial adviser for further guidance.

If you have property in your Self-Managed Super Fund (SMSF)

The ATO can provide temporary relief to rental arrangements with tenants, including those who are related parties. 

While this would typically trigger a range of compliance breaches, the ATO has indicated that it will not take compliance action for the 2019-20 or 2020-21 financial years.

Take action

Click here for guidance to issues that may be experienced by SMSF Trustees

Loan

If you have a loan or want a new loan

The Reserve Bank of Australia (RBA) has provided $90b of funds to the banks at a fixed interest rate of 0.25%.  This provision is ultimately passed on to individuals and businesses in the form of lower interest rates.

Lower rate funding complements actions from various government departments to put downward pressure on interest rates.

Take action

A review of both your loan products and lending strategies could provide you with a better outcome.  A mortgage broker is likely to be the most effective specialist to assist with this.

Click here for the Government factsheet

If you are struggling to pay your mortgage

Some banks are offering borrowers up to six months deferral of their repayments, which includes principal and interest repayments.

Interest will still apply during the deferral period, and it will be added onto the total loan cost once the deferral period ends.

Take action

Financial hardship teams have been set up to assist with:

  • Deferring loan payments
  • Waiving fees and charges
  • Helping with debt consolidation
  • Waiving penalties for early withdrawal of term deposit
  • Deferring upcoming credit card payments and increasing emergency limits

 Click here for the direct line to bank’s financial hardship team

If you want relief from your credit card/personal loan obligations

Most banks have introduced a series of other measures to help customers with lines of credit.  These include payment holidays or reducing the minimum amount that needs to be paid each month.

Take action

Contact your financial institution to discuss your options.

Click here for the direct line to your bank’s financial hardship team

Social Security

If your household income has reduced

Households with significant income from employment or other sources (e.g. rental) have historically received a lower entitlement from Centrelink (e.g. Age Pension).

If a household’s income has changed, they will have improved eligibility for all benefits assessed under the ‘income test.’

Centrelink has also increased the amount a spouse can earn before impacting an individuals ability to claim JobSeeker.

Take action

Update your income from all sources with Centrelink via myGov.  If you are not currently receiving a benefit, consider making an application via myGov.

If you have financial assets that limit your Centrelink entitlement

Households with significant financial assets (cash, shares, super, etc.) have historically received a lower benefit from Centrelink.

In addition to falling asset values (improving eligibility under the ‘asset test’), the deeming rate on financial investments reduced considerably from 1 May 2020 (improving eligibility under the ‘income test’). 

Take action

If your bank accounts, investments or super has decreased recently, you might benefit from updating Centrelink with your current asset values.

Click here for the Government factsheet

Legal

If you are a director of a company

A temporary six-month safe harbour from the directors’ duty to prevent insolvent trading has been put in place. 

The safe harbour only applies to a debt that is incurred in the ordinary course of business.

Take action

Discuss your solvency concerns with your accountant and seek relief under the Corporations Act.

Click here for the Government factsheet

If you are in danger of bankruptcy

A temporary six-month safety net has been put in place to protect individuals against bankruptcy proceedings between 25 March and 24 September 2020.

This measure does not impact on bankruptcy proceedings instigated prior to or after the temporary measures.

Take action

Discuss your bankruptcy concerns with your accountant.

Click here for the Government factsheet

Insurance

If you pay for personal insurance (e.g. Income Protection)

Some personal insurance policies include an involuntary unemployment benefit. 

Benefits vary, but could include a waiver of your premiums for a while and in some circumstances pay your mortgage repayments for up to three months.

Take action

Review your personal insurance PDS or contact your insurer for benefits written into your contract. 

You could also contact your financial adviser who can attempt to negotiate even better terms with the policy provider on your behalf.

Rental

If you need rental relief

The Victorian Government will provide rent relief payments of up to $2,000 to certain Victorians experiencing rental hardship due to coronavirus.

Take action

If you are unable to pay your rent due to financial hardship, in the first instance you should contact your landlord or property manager as soon as possible to negotiate an alternative arrangement such as rent reduction or deferral of payments.

When you reach an agreement, make sure it’s in writing and lodge the agreement with Consumer Affairs Victoria.  You may then be eligible for a Rent Relief Grant.

Click here for the HousingVic information page

FIND OUT MORE

Businesses

Cash flow

If you have a small or medium sized business which employs workers

Most small and medium-size businesses which pay withholding tax may be eligible for a tax-free cash flow boost of up to $100,000 (a minimum of $20,000) in order to keep operating, pay bills and retain employees.

Take action

It is important that you lodge your activity statements with the ATO.  Engage with your accountant to ensure your eligibility.

Click here for the Government factsheet

If you would like a wage subsidy to pay & retain employees

Businesses and not-for-profits impacted by the coronavirus will be able to access a wage subsidy from the Government to continue paying employees.  Affected employers may be able to claim payment of $1,500 per fortnight per eligible employee from 31 March 2020, for a maximum of 6-months.

Take action

Click here for the Government factsheet

If you employ apprentices and trainees

To support small businesses to retain their apprentices and trainees, eligible businesses can apply for a wage subsidy of 50 per cent of the apprentice’s, or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

Take action

Click here for the Government factsheet

If your business has been highly impacted by COVID-19 restrictions (Victoria)

The Victorian Government is providing grants of up to $10,000 to eligible small businesses that employ staff, particularly hardest hit business sectors including accommodation, food, entertainment, sport, tourism, retail and other services.

Take action

Apply for the grant.  You may benefit from discussing your intentions with your accountant who can enhance your eligibility.

Click here for the Business Support Fund information page

If your business operates in the City of Melbourne

The City of Melbourne announced a raft of measures to support businesses affected by COVID-19.

This includes grants for small to medium-sized businesses (including NFOs) of up to $10,000 to develop online and e-services.

Other incentives include suspending fees for street trading permits, reduced registration fees for food businesses and one-on-one advice and support.

Take action

Click here for the City of Melbourne information page

Tax

If you want a significant tax write-off for your business
Most small businesses are currently eligible for an instant write-off on assets up to the value of $150,000. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets. Take action Businesses should confirm their entitlement to the tax deduction with their accountant before making a decision. Click here for the Government factsheet
If your business is considering a large asset purchase
Businesses with a turnover of less than $500 million can deduct 50% of the cost of an asset upon installation. Take action Businesses should confirm their entitlement to the tax deduction with their accountant before making a decision. Click here for the Government factsheet
If you will pay payroll tax in the 2019-20 financial year (Victoria)
Businesses with annual Victorian taxable wages up to $3m will have their payroll tax for the full 2019-20 financial year waived.  In addition, there are options to defer payroll tax for the 2020-21 financial year. Reimbursements will begin from 27 March, 2020. Take action Talk to your accountant about your eligibility. Click here for the State Revenue Office of Victoria’s response to COVID-19
If your business would like ATO administrative relief
The Australian Tax Office (ATO) will provide administrative relief for certain tax obligations (similar to relief provided following the bushfires) for taxpayers affected by the Coronavirus outbreak, on a case-by-case basis. This includes the ability to defer payment of certain taxes up to six-months, and allowing businesses to vary pay as you go instalment amounts to zero for the March 2020 quarter. Take action All taxpayers affected by the Coronavirus outbreak can contact the ATO for assistance.  Taxpayers can contact the ATO on 1800 806 218 or visit the ATO website for further information.  Consider contacting your tax professional for more details. Click here for the Government factsheet

Loan

If you want a business loan facility

The Federal Government is providing banks with a guarantee of 50% on new unsecured business loans up to $250,000, meaning banks will be more likely to approve loans.

The Scheme will be available for participating banks until 30 September 2020.

Take action

Contact a mortgage broker to assess your eligibility, find a participating lender and put a business lending proposal together for you.

Click here for the Government factsheet

If you want relief from your loan obligation

Most banks are currently offering debt relief to small business; a deferral on payments for some loans.  Businesses may have the opportunity to add the interest amount to the balance of the loan or extend the loan term after the deferral period ends.

Also, some banks may offer extra relief such as waiving fees and the offer of extra credit.

Take action

Contact your business banker or a lending specialist to discuss relief measures that may be available to your business.

Legal

If you are a director of a company

A temporary six-month safe harbour from the directors’ duty to prevent insolvent trading has been put in place. 

The safe harbour only applies to a debt that is incurred in the ordinary course of business.

Take action

Discuss your solvency concerns with your accountant and seek relief under the Corporations Act.

Click here for the Government factsheet

If you have solvency concerns

The economic impacts of Coronavirus and health measures to prevent its spread could see many otherwise profitable and viable businesses temporarily face financial distress.

A temporary six-month safety net has been put in place to protect companies from being pushed into insolvency as a result of the pandemic by debts incurred in the ordinary course of running a business.

Take action

Discuss your solvency concerns with your accountant and seek relief under the Corporations Act.

Click here for the Government factsheet

If you are in danger of bankruptcy

A temporary six-month safety net has been put in place to protect individuals against bankruptcy proceedings between 25 March and 24 September 2020.

This measure does not impact on bankruptcy proceedings instigated before or after the temporary measures.

Take action

Discuss your bankruptcy concerns with your accountant.

Click here for the Government factsheet

Rental

If you need relief from your commercial lease (Victoria)

The Victorian Government has introduced a scheme to provide the following support for some tenants:

  • A six-month moratorium on commercial tenancy evictions for non-payment of rent
  • A freeze on rent increases during the moratorium
  • A potential rental payment waiver or deferral

Take action

Click here for information on the Commercial tenancies relief scheme

FIND OUT MORE

Any advice on this website is of a general nature only, and all case studies are for illustrative purposes only.  Please seek advice tailored to your own personal circumstances before acting on this information.

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