The COVID-19 pandemic has impacted all Australians in ways far beyond those unfortunate 7000 (and counting) who have contracted the illness. The issues of mental health, education and care for the elderly and infirmed have all come to the fore over the past 10 weeks. Similarly, financial planners face a new range of issues that require consideration when guiding clients through this unprecedented environment.
This month’s Industry Insights looks at five new issues for financial planners and their clients to consider in this COVID-19 landscape.
4. The JobSeeker/JobKeeper crunch
In late September, both the JobKeeper Payment, and the coronavirus supplement for JobSeeker Payment (formerly Newstart Allowance) recipients, are due to cease. For those who have not seen their employment reinstated, this looms as a challenging date. For those who were on JobKeeper, they stand to see their income drop $750 per week.
For those on JobSeeker, the $275 per fortnight coronavirus supplement will disappear, and the standard rate of JobSeeker will apply. The asset test and various waiting periods (such as the liquid assets waiting period and ordinary waiting period) will also resume for new JobSeeker applicants. Accordingly, some JobSeeker claimants will see their benefit end altogether.
Former JobKeeper recipients will not necessarily be immediately eligible for JobSeeker in September either – often due to the operation of these waiting periods or significant asset levels. The upshot of all of this is that clients in financial distress need to be planning ahead for this time when government support will aggressively contract.
One way to manage this September period will be to withdraw $10,000 from super to tide clients over. The catch being that, if the clients wait until the end of September to apply for the withdrawal, it will be too late – withdrawals cease on September 24. Forward planning is essential to manage what looms as a time of significant financial hardship for many Australians.
The information contained in this publication is based on the understanding KeyInvest (ABN 74 087 649 474 AFSL No. 240667) has of the relevant Australian legislation as at the date shown in this publication.
The information contained in this publication is of a general nature only and is intended for use by financial advisers and other licensed professionals only. It must not be handed to clients for their keeping nor can any copies of sections of this publication be given to clients. KeyInvest is not a registered tax agent under the Tax Agent Services Act 2009. We recommend that your client be referred to their registered tax agent or legal adviser prior to implementing any recommendations that you may make based on the information contained in this publication.