The sooner we see the back of April 2020, the better.
I venture that we’ll think about it for decades to come as the lost month… the month where our financial security blanket was whipped out from underneath us, as countries around the world turned on their economic heads almost in unison.
And while the promise of help here was fast, its delivery hasn’t been.
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The coming cash and concessions
By the end of March, we knew that a ‘floor’ of income support was coming (to most).
The third stimulus announcement on March 30 saw the flat-rate $1,500 JobKeeper wage subsidy join the virtually doubled JobSeeker unemployment benefit (which no longer has a wait or an assets test, and for which you now qualify even if a spouse earns nearly $80,000).
And we knew that there were myriad measures for small business.
But almost none of it has yet landed. Indeed, most are not scheduled to hit until between the end of the month and July.
And the impossible stalemate between renters and landlords – despite various bits of relief and no-eviction rules – only grows fiercer in many cases. This falls to each state to sort out.
So how soon will we – both as individuals and businesses – have some stability of income and see our ‘new’ financial normal?
Here’s what individuals will get – and when
Fortnight commencing March 30 – That’s the first fortnight for which an employer can qualify for JobKeeper refunds of $1,500 a fortnight in wages per staff member (and that’s the minimum it must pay). So that’s when money might have started to flow to you as an employee, but if there’s been nothing, read the issues for employers in the next section.
Backdated to the day you applied – For people still waiting for Centrelink to get back to them, know that any repayments will be backdated to the day you applied. Just don’t accidentally hang up on Centrelink when it calls you – a delay when you answer, before a recorded message begins, makes it sound like a cold call!
Mid-April – For people in receipt of benefits between March 12 and April 13, the $750 bonus will have already dropped into your account.
July – A second $750 will arrive for people on benefits on July 10, who don’t shortly become eligible for the new coronavirus supplement below…
April 27 – The doubling of the JobSeeker payment is achieved with a $550 fortnightly coronavirus supplement that will only be paid from this date, for six months. Importantly, the full amount will go to anyone who earns even $1 of JobSeeker, so it’s worth applying even if you think you’re close to the income cut-off thresholds.
Mid-April – There is now a form on the ATO part of your myGov which lets you – provided your income has fallen by 20 percent of more – access $10,000 of your super this financial year (so before June 30) and $10,000 next financial year (from July 1)… but please don’t. If we can all come out of this with the assets we’ve built up over our lives intact, then that’s the dream result.
For six months from March – there is a moratorium on evicting any tenant, or at least that’s what the prime minister announced several weeks ago. NSW in particular is making that dependent on all sorts of things, including needing to apply to a tribunal for a rent reduction (and parliament is not being recalled until May 11 to debate these measures, leaving renters and landlords both hanging and hamstrung).
Now – the fastest part of this whole process has actually been mortgage concessions. Lenders have been bending over backwards to give immediate repayment holidays to people experiencing hardship… of course, they’ll ultimately collect more in interest from you if you take up this offer. Modelling by RateCity shows that a six-month pause on an average $400,000 home loan at 3.54 percent will cost $6052 in extra interest if you don’t extend the loan term but instead lift your repayments at the end of the period. However, if you don’t up them, it will blow out your loan by 15 months and your interest by more than $17,000!
But all the emergency support, including some offered by their banks, has been traumatically slow for businesses…
Here’s what businesses will get – and when
May – Until mid-April, many employers weren’t sure whether they would qualify for JobKeeper… so many were hesitant to resume paying their staff. Most now have some certainty – and applications opened on April 20 for the more-than 900,000 that pre-registered to start to receive refunds in May.
NOTE: refunds will always be made in arrears the following month… no matter when you start paying. A revenue plunge means some simply can’t bridge wage payments and although the banks are apparently ready and willing to help with credit, at this stage some aren’t getting approvals through quickly enough.
There are two other crucial dates for JobKeeper too:
March 1 – A business needs to have been trading and an employee (full or part-time or casual with more than a year service) must have been on the books on March 1, even if they had or will have to be reinstated thereafter. And the second important date is:
March 12 – If you are a contractor or sole trader, you need to have held an ABN at this date. Meanwhile, this one is really important…
April 26 – An employer has until then to nominate the employees for whom it is claiming JobKeeper. Usually they’ll be able to claim just one fortnight’s refund, but this month, they can get the past two fortnights.
April 28 and after your next two BAS periods – A business with at least one employee and turnover below $50million will get an automatic refund of pay-as-you-go tax in the quarter, under what’s called the cashflow boost. But this will be a minimum of $10,000 (a maximum of $50,000). As long as the business is still trading, they will also get a second minimum of $10,000, split into two lots of $5000 after the next two quarterly BAS periods (the maximum here is also $50,000).
June 30 – There is a supercharged instant asset write off, from $30,000 to $150,000 per item you buy.
Now – If your business is eligible for JobKeeper, you can get a decrease in your rent under an agreement by the National Cabinet. Here is a great little video by the small business ombudsman on how that reduction will be calculated.
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