$10,000 Coronavirus Superannuation Payment

$10,000 Coronavirus Superannuation Payment

Those suffering hardship due to the Coronavirus pandemic will be able to access a $10,000 Coronavirus superannuation payment this financial year 2020, and another $10,000 next financial year after 1 July 2020. The payments are expected to be available from 20 April 2020 and will be able to be applied for online via myGov or via the ATO for a payment to be made from an SMSF.

Also see: FAQs on Super Early Release for SMSFs here.

A factsheet on the $10,000 Coronavirus Superannuation Payment can be found here: https://treasury.gov.au/coronavirus/households (PDF)

When can you access the $10,000 Superannuation Payment?

Payments are expected to commence from 20 April 2020 and you will be able to apply via ATO online services under myGov.

  • You will need to certify that you meet the eligibility criteria (see below)
  • After the ATO has processed your application, they will issue you with a determination
  • The ATO will also provide a copy of this determination to your superannuation fund, which will advise them to release your superannuation payment
  • Your fund will then make the payment to you, without you needing to apply to them directly
  • Ensure your super fund has your most up to date contact details

$10,000 Coronavirus Superannuation Payment

Source: AFR 22/03/2020 Government to release extra $66b

From 20 April 2020, those affected will gain access to that superannuation, capped at $10,000 this financial year and a further $10,000 next financial year.

These withdrawals will be tax-free and available to those who are eligible for the Coronavirus Supplement as well as sole traders who have seen that hours work, or income fall, 20 per cent or more as a result of the Coronavirus.  So if you are a sole trader or a casual and you have seen your income or your hours work followed by 20 per cent or more as a result of the pandemic, you will be  able to get early access to the $10,000 Coronavirus superannuation payment.

Applications will be made online through a simple declaration to the Australian Taxation Office. This initiative builds on in provisions on the super on the grounds of compassion grounds or hardship and up to $27 billion of superannuation can be put back into the pockets of hard-working Australians.

Mr Frydenberg said this would release less than 1 per cent of the $3 trillion saved in superannuation, and that the prudential regulator APRA had advised there would be no significant impact to the industry.

The government is also giving retirees more flexibility over their superannuation. Currently, retirees are required to draw down a minimum of 4 per cent a year from that superannuation, a number that increases with their age.The government is halving this requirement to 2 per cent for this year and for next year, to give retirees more discretion over the management of their assets. More about this initiative here: SMSF Minimum Pension 2020 Drawdown Relief

How to apply for the $10,000 Coronavirus Superannuation Payment

If you are eligible for this new ground of early release, you can apply directly to the ATO through the myGov website: www.my.gov.au

Access $10000 super coronavirus via MyGov

You will need to certify that you meet the below eligibility criteria. After the ATO has processed your application, they will issue you with a determination. The ATO will also provide a copy of this determination to your superannuation fund, which will advise them to release your superannuation payment. Your fund will then make the payment to you, without you needing to apply to them directly.

However, to ensure you receive your payment as soon as possible, you should contact your fund to check that they have your correct details, including your current bank account details and proof of identity documents.

$10,000 Temporary Early Release from SMSFs

Separate arrangements will apply if you are a member of a self-managed superannuation fund (SMSF). Further guidance will be available on the ATO website: www.ato.gov.au.

You will be able to apply for early release of your superannuation from 20 April 2020.

A factsheet on the $10,000 Coronavirus Superannuation Payment can be found here: https://treasury.gov.au/coronavirus/households (PDF)

Eligibility

To apply for early release you must satisfy anyone or more of the following requirements:

  • you are unemployed; or
  • you are eligible to receive a job seeker payment, youth allowance for job-seekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
  • on or after 1 January 2020:
    • you were made redundant; or
    • your working hours were reduced by 20 per cent or more; or
    • if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.

People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

Coronavirus Supplement

On 22 March 2020, the Government announced it will provide a temporary Coronavirus Supplement of $550 a fortnight to new and existing income support recipients from 27 April 2020 for six months. People will receive their usual payment plus $550 each fortnight for the six month period.

The Coronavirus Supplement will be provided to people receiving:

  • JobSeeker Payment
  • Sickness Allowance
  • Youth Allowance for jobseekers
  • Parenting Payment Partnered
  • Parenting Payment Single
  • Partner Allowance
  • Sickness Allowance
  • Farm Household Allowance.

From 27 April 2020, the Government has also put expanded eligibility and qualification criteria in place for six months. Eligibility for JobSeeker Payment and Youth Allowance for jobseekers will also be expanded to assist:

  • Sole traders and self-employed people. They will be able to meet mutual obligation requirements by continuing to operate their businesses.
  • People caring for someone infected or in isolation as a result of contact with Coronvirus.

The Government will temporarily waive, for certain payments:

  • the assets test
  • the Ordinary Waiting Period (already waived until 12 June 2020)
  • the Liquid Assets Waiting Period
  • the Seasonal Workers Preclusion Period
  • the Newly Arrived Residents Waiting Period.

Also from 27 April 2020, access to payments will become easier with a temporary removal of the requirement for an Employment Separation Certificate, proof of rental arrangements and verification of relationship status.

Temporary early access to superannuation

The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.

While superannuation helps people save for retirement, the Government recognises that for those significantly financially affected by the Coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings until retirement. Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation).

How Superfund Partners can help you access this early release of super?

Once the guidance is available from the ATO, we can assist you apply for the early release $10,000 Coronavirus Superannuation Payment from your SMSF.

If you have any questions, please contact us.

mm

SMSF Specialist at Superfund Partners. I love working in the SMSF space. Self-managed super funds are more than just a savings vehicle - they enable people to truly take control of their financial situation which is key to achieving happiness. I can assist with SMSF setup, SMSF tax and accounting, SMSF pensions and ensure SMSF investments comply with the SMSF laws and regulations.