News

Superannuation contributions

Employers should note that there are no changes to the requirement to make superannuation contributions in accordance with the Superannuation Guarantee law.

Superannuation Guarantee Charge Amnesty

The SGC amnesty period started on 6 March 2020 and will conclude at midnight on 7 September.  No change has been made to this period.  It should be remembered that payments after 7 September 2020 in relation to the SGC amnesty will not be tax deductible.

Stimulus payments to households

Also provided for is the payment of the first economic support payment of $750 to Social Security and Veterans’ income support recipients, Farm Household Allowance recipients, Family Tax Benefit recipients and holders of a Pensioner Concession Card, Commonwealth Seniors Health Card or Commonwealth Gold Card.

There will also be a second economic support payment of $750 to the above people who receive a qualifying payment or hold a qualifying concession card on 10 July 2020. This second payment will not be paid to a person who receives, on 10 July 2020, the new Coronavirus supplement detailed below.

Additional supplement for income support recipients

The stimulus package also amends the Social Security legislation to provide financial assistance to people who are affected by the COVID-19 crisis. Australians can claim Jobseeker payment or Youth Allowance (other) if they are an Australian resident (or exempt from the residence requirements). If qualified, a person receives the current rate of Jobseeker payment or Youth Allowance (other) along with a fortnightly supplement of $550 or such other amount determined by legislation.

The supplement is also available to existing recipients of Jobseeker payment, Youth Allowance (other), Parenting Payment, Special Benefit, and the Farm Household Allowance. The Minister for Families and Social Services may extend the supplement to other social security payments by legislative instrument should a need arise.

The supplement is available for an initial six month period, although this may be extended depending on how the current crisis unfolds.

Recipients of Jobseeker payment or Youth Allowance (other) (which includes new and existing recipients) and Parenting Payment are also exempt from the assets test, liquid assets waiting period, ordinary waiting period, newly arrived resident’s waiting period and seasonal worker preclusion periods. The exemption from the newly arrived resident’s waiting period also applies to special benefit. The supplement and exemptions also apply to recipients of the Farm Household Allowance.

Note that the date of affect for these measures is 27 April.

Early release of superannuation

The stimulus legislation allows individuals affected by coronavirus to have up to $10,000 released from their superannuation or retirement savings account on compassionate grounds. Each person is permitted to have up to two releases – one for an application made during the 2019-20 financial year and another for an application made during the 2020-21 financial year. The amounts that are released are not subject to tax.

From mid-April eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 until 24 September 2020.

The legislation states that to apply for the determination for such early releases, the person must satisfy any one of the following requirements about their employment or business status.

At the time the person applies for the determination, they are:

• unemployed;
• eligible to receive a Jobseeker payment, Youth Allowance, Parenting Payment (which includes the single and partnered payments) or special benefit under the Social Security Act; or
• eligible to receive the Farm Household Allowance; or

On or after 1 January 2020 the person:

• was made redundant;
• their working hours were reduced by 20% or more; or
• if the person is a sole trader – their business was suspended or there was a reduction in their turnover of 20% or more.

Superannuation drawdowns

The bill amends the regulations to give effect to the Government’s announced measure to reduce the minimum payment amounts for account-based pensions (and for the equivalent annuity products) by half for the 2019-20 and 2020-21 financial years.