COVID-19 Update - Superannuation and Retirement

We wanted to share with you details around the Government’s economic stimulus packages.

Over the past two weeks the Government has announced two economic stimulus packages to cushion the economic impact of the Coronavirus.

A total of $189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business.

This includes $17.6 billion for the Government’s first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to deliver easier access to finance, and $66.1 billion in yesterday’s economic support package.

There are some important superannuation measures that you should be aware of:

Early release of superannuation, Temporarily reduced superannuation minimum Pension drawdown rates and reducing Social Security (Centrelink) deeming rates.

The exact eligibility requirements will be formed in the coming days but broadly to apply for early release you must satisfy any one or more of the following requirements:

• you are unemployed; or 
• you are eligible to receive a job seeker payment, youth allowance for jobseekers, 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.

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

Separate arrangements will apply if you are a member of an SMSF. You will be able to apply for early release of your superannuation from mid-April 2020.

Please note this information provided is not considered advice and is general in nature and does not take into account your personal situation.

If you need any assistance with understanding this announcement, you should consider whether the information is appropriate to your needs and where appropriate, seek further advice from our office.