INSIGHTS INTO THE $66BN STIMULUS RELIEF PACKAGE

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We recognise that during this unprecedented health crisis it can be difficult for you to know how best to protect yourself, your family and your business. From which social distancing practices you should adopt, to knowing how best to manage your finances, it's important to get the right advice.

We want to reassure you that we are keeping on top of all the latest developments, are closely monitoring your investments and looking after your financial interests.

Over the weekend the government unveiled a $66 billion stimulus relief package for Australians in order to counteract the economic impact of the COVID-19 virus. This new safety package is being released on top of the initial $17.6 billion package and more than $100 billion in emergency banking measures.

We wanted to reach out to you to highlight how some of these relief measures may impact you and your business.


Highlights of the $66 billion

Early Superannuation access, temporary reduction of minimum pension payment requirements for retirees, $550 extra a fortnight for job seekers, loan relief for small businesses, and a $750 tax-free payment for 5.2 million Australians.

 

1 Superannuation

  • From mid-April, the government's new special 'condition of release' measures will give those in financial distress early access to Superannuation savings to meet immediate family living expenses like groceries, utilities, medical bills and education costs.

  • Eligible people will gain access to tax-free payments of up to $10,000 this financial year, and an additional $10,000 after 1 July 2020.

  • Eligible people include Australians who are unemployed; or are entitled to receive Jobseeker Payment, Youth Allowance, Parenting Payment, Special Benefit, Farm Household Allowance; or are a sole trader/casual worker who has seen their income or hours reduced by 20% due to the Coronavirus.

  • Claims will be able to be made online and amounts received will not impact Centrelink or DVA entitlements.

 

2 Small Business

  • Small Business loan relief: Banks will soon support small businesses struggling from the impact of COVID-19 by deferring loan payments for up to six months.

  • Coronavirus SME Guarantee Scheme: From April, $40 billion will be available to provide more lending to SME businesses. Loans of up to $250,000 for up to three years will be available for businesses with a turnover of less than $50 million, with a six month period where no repayments are required.

  • Lump sum, tax-free payments to employers: Up to $100,000 rebate for PAYG on wages for businesses with turnover below $50m.

  • Debt relief: Temporary increase in threshold that allows creditors to issue statutory demands for debt from $2000 to $20,000 for a 6 month period. The ATO can also defer certain tax debts for businesses impacted by the Coronavirus, for up to 6 months.

  • Instant asset write-off: Threshold increased from $30k to $150k for businesses with a turnover of less than $500m and for assets purchased from 12 March - 30 June 2020.

 

3 Coronavirus Supplement

  • As of 27 April, job seekers will now be eligible to receive double the usual allowance to help those impacted by loss of work due to the Coronavirus.

  • The Coronavirus supplement will provide $550 a fortnight in addition to the existing job seeker allowance or new start payment. Job seekers who pass the eligibility test online can receive up to a maximum of $1100 a fortnight.

  • The asset test and waiting period for the job seeker allowance will be waived during the Coronavirus health crisis.

4 Reduction in minimum pension payments

  • The minimum pension payment requirement for all account based pension holders will temporarily be reduced in both 2019-2020 and 2020-21. This will give retirees more flexibility in how they manage their retirement incomes.

  • The amount by which retirees are able to reduce their pension payment will depend on their age. From a 2% minimum for those under 65, up to a 7% minimum for those over 95 years of age.

 

These relief stimulus measures will help bolster the economy and support Australians across the financial spectrum.

For a more detailed analysis of the package click here.


Courage is knowing what not to fear

We might not have power over the financial markets, but we do have power over how we react to them. Despite the unprecedented situation we all find ourselves in together, historically we can rely on the markets to recover and trust that shares will offer higher returns than more stable assets in the long-run.

Reacting impulsively to the fear factor in the financial market by selling shares or switching to a more conservative investment strategy after a major fall just crystallises the loss. If we look at the ways we can change a crisis into an opportunity, the sharp fall in the market provides an opportunity for some to invest for the long term.

We won't beat around the bush, this crisis is going to have a serious impact on the economy, but forming a strong investment strategy that works best for your situation will help you weather the storm.

Please contact us if you would like to discuss how best to navigate your finances through the Coronavirus health crisis. 

We hope that you and your family stay safe and well during this challenging time.

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