Financial support during COVID-19: What stays, what goes?
Government support payments and bank relief packages have been vital for many Australians who’ve lost their jobs, had their income reduced, or had to juggle childcare alongside remote and essential work as a result of COVID-19. But these financial schemes mostly have expiry dates.
So you can plan ahead and budget accordingly, here are some of the current cut-off times and important dates within the economic stimulus. Read on for more details about these and other initiatives related to income, housing, business and banking during the pandemic.
What’s the timeline for JobKeeper, JobSeeker and free childcare?
The JobKeeper payment is currently in place until September 27. However, the scheme is now under review, with the Treasury set to release its verdict to the public on July 23. So this schedule could change by midwinter.
Despite the ongoing assessment, things are running differently for the childcare sector. JobKeeper payments for the industry will cease from July 20 and will be replaced by a $708 million transitional support package.
This change goes hand-in-hand with the end of free childcare services which were introduced across the country in early April. From July 12, parents and carers struggling to meet childcare fees will have to go back to supplementing costs through the Child Care Subsidy. Concession rates for this are dependent on combined family income, the type of childcare arrangement, and the activity level of parents working, studying or seeking employment (although this last requirement is being relaxed until October 4).
The $550 fortnightly boost to JobSeeker (formerly the Newstart Allowance) is also set to time out on September 27, bringing the highest payment for an individual without dependents back to $565.70 per fortnight. Labor and the Greens have pressured the Federal Government to lift the payment above its former rate, and it seems the public concurs. Data from Vox Pop Labs and the ABC has shown 37% of Australians believe JobSeeker’s pandemic rate should be maintained, and another 20% think it should be increased further.
What happens when the moratorium on rental evictions times out?
At the end of March, the government announced a six-month moratorium on rental evictions. The intention was to ensure house security for tenants financially impacted by the pandemic. Since the states and territories are responsible for regulating this federal order, there’s been variation around eligibility criteria, implementation, and insurance implications for landlords.
Whether you’ve negotiated reduced rent or are in full rental arrears, the biggest question is if you’ll have to cover missed payments in full post-moratorium. The answer is frustratingly uncertain and inconsistent.
In Queensland, tenants who’ve negotiated reduced rent will not be liable to pay the difference on the original amount. However, in most other areas and in the case of rent waivers, there’s no precise ruling on repayment plans. It generally comes down to landlords and tenants to deal with the details moving forward, with eviction due to rental arrears on the table when the moratorium ends.
Timeframes for this differ depending on when states and territories enacted the order. It’s roughly between late September and mid October, or subject to extension upon review after that time.
What’s happening with government support for businesses?
There are a number of schemes in place supporting small to medium enterprises (SMEs), but these too have a finish line.
The Instant Asset Write-Off scheme has recently been extended to the end of the year for small businesses. Since an increase in March, businesses with annual turnovers below $500 million can claim immediate tax deductions on equipment purchases up to the value of $150,000.
Other government support schemes for SMEs like the cash flow boost, apprentice wage assistance and loan guarantee are all set to expire by September 30.
Have there been any changes to banks’ emergency coronavirus relief packages?
When the Australian economy started feeling the effects of COVID-19 in March, many financial institutions released relief packages for customers impacted by the crisis.
Mortgage deferrals, where homeowners press pause on home loan repayments or switch to interest-only repayments temporarily, have been high on this agenda. They sit alongside other support measures like fee waivers, interest rate reductions or freezes on loans, and temporarily increased limits on credit applications.
These support options have slowly evolved along with the crisis, so be sure to investigate what your bank or lender is currently offering. Recent notable developments include Westpac’s extension on mortgage relief, pushing out temporary interest-only repayments to 12 months.
In other big bank news, CommBank’s recently announced relief restructuring will involve further customisation of support packages, options to restart interest and principal home loan repayments when appropriate, and increased staff at the bank’s Financial Assistance Solutions teams.