Your finances through COVID-19
Over the last 12 weeks, COVID-19 has made our world a very different place. In response, the government has stepped on an extraordinary scale, we’re tightening our belts, and we’re keeping safe by social distancing. As digital brokers, It’s Simple is grateful that we’re able to continue as normal, just servicing our clients from the comfort of home for now. In case you’re feeling confused by any of the government measures in place, or you’re wondering what your broker or bank is doing to help you, we’ve broken it down and kept it Simple. We’re in it together (apart). For more information, subscribe to our Simple Tips newsletter to download our FREE COVID-19 eBook and budgeting tool, scroll to subscribe.
What has our government done to help?
JobKeeper Stimulus Package
- The JobSeeker allowance is for financial help if you’re between 22 and Age Pension age and looking for work. It’s also for when you’re sick or injured and can’t do your usual work or study for a short time.
- The Morrison government initially rolled out a $17.6 billion economic stimulus package where all people on JobSeeker would receive a $750 one off cheque to continue injecting income into our economy.
- The government then came in with a second stimulus package for JobSeekers of $14 billion, whereby those receiving JobSeeker payment would receive an extra $550 per fortnight over the next six months in what is being called a temporary Corona Virus supplement.
- For JobSeeker Payment, Services Australia has increased the amount your partner can
earn before it affects your eligibility and payment amount. From 27 April 2020, the partner income limit at which your payment will cancel temporarily increases to $3,086.80 gross per fortnight. If you earn any income, it will also count in this income test.
To qualify, applicants need to satisfy age, residency, income and asset tests. Download our eBook here for more information on eligibility.
The historical $130billion JobKeeper Package
- The Morrison Government is providing a historic wage subsidy to around 6 million Australian workers who will receive a flat payment of $1,500 per fortnight through their employer, before tax. The $130 billion JobKeeper payment will help Australians keep their jobs as businesses tackle the significant economic impact from coronavirus.
- The payment will be open to eligible businesses that receive a significant financial hit caused by the coronavirus. (At least a 30% reduction in revenue.)
- The payment will provide the equivalent of around 70 per cent of the national median wage. For workers in the accommodation, hospitality and retail sectors it will equate to a full median replacement wage.
- The payment will ensure eligible employers and employees stay connected while some businesses move into hibernation.
- To qualify, employers and sole traders must satisfy certain criteria. Download our eBook here for more information on eligibility.
Early Access to Superannuation
The government is allowing individuals affected by COVID-19 to access up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21. Individuals will not need to pay tax on amounts released – coronavirus amounts are then not taken into account under any income or means tests.
Eligible individuals will be able to apply to access up to:
- $10,000 of their super before 1 July 2020
- A further $10,000 from 1 July 2020 until 24 September 2020.
There is an eligibility test for early release of superannuation. Download our eBook here for more information.
How are banks helping?
- The RBA has reduced the cash rate to 0.25% to boost the cashflow of businesses and household expenditure through the economy.
- Banks are following suit, and interest rates are up to a whole 1% lower than this time last year
- Some banks are considering JobSeeker and JobKeeper payments when assessing mortgage serviceability
- Banks are now offering customers
the option to pause their current loan repayments for 3 months with the possibility to extend for another 3 months, provided they were up to date with repayments prior to COVID-19.
Banks are doing more to help distressed borrowers. Download our eBook here to read more.
How we can help – refinance your mortgage
Many Australians do not know that they do not have to be locked into one bank or one rate for life. Or, they don’t have the time to do their loan homework. You should never stop shopping for home loans, because especially during times of economic crisis, you are likely save on a lower interest rate which can help supplement lost wages or lost savings.
Contact It’s Simple to find out if you could be saving (SPOILER: you are probably paying too much on your mortgage). Or, for more information, subscribe to our Simple Tips newsletter to download our FREE COVID-19 eBook and budgeting tool, scroll to subscribe.