The coronavirus is impacting the economy. Picture: iStock
The coronavirus is impacting the economy. Picture: iStock

What COVID-19 means for your money

Life in Australia has changed drastically over the last few weeks as the deadly coronavirus started to spread.

And in addition to the serious health implications, the pandemic is also wreaking havoc on the economy, sparking a flurry of financial shake-ups.

Here's everything you need to know when it comes to COVID-19 and your cash.

Under the federal government's first round of stimulus, around 6.5 million Australians on government benefits such as the Newstart and Carer Allowance and Family Tax Benefits will receive a $750 payment.

Those payments will be paid out from next Tuesday on March 31 - and you won't have to lift a finger to claim it.

It will be processed by Services Australia automatically, and those with existing bank details with Services Australia will simply find the cash in their accounts.

And about five million social security and veteran income support recipients and eligible concession card holders will also receive a second $750 payment from July 13 which was announced as part of the government's second stimulus package.

Again, it will be paid automatically into your account registered with Services Australia.

For more information, click here.

Payments for recipients of the JobSeeker Payment, Youth Allowance, Parenting Payment, Farm Household Allowance and Special Benefit will also rise to $550 per fortnight for the next six months under the federal government's $66 billion stimulus plan.

Individuals struggling as a result of the COVID-19 outbreak will also be able to access some of their super early.

Eligible Aussies will be able to access up to $10,000 in 2019-20, and a further $10,000 in 2020-21.

 

RBA

The Reserve Bank held an unscheduled meeting in March to devise a package to address the unprecedented coronavirus crisis.

That package included slashing the official cash rate from 0.5 to 0.25 per cent, setting a target for the yield on three-year government bonds, supplying credit to business and an adjustment in interest rates on accounts financial institutions hold with the RBA.

For more information, click here.

 

BANKS

Meanwhile, Australia's major banks have started to introduce their own coronavirus policies.

Commonwealth Bank and ANZ customers struggling with the virus's impact will be able to defer their home loan repayments for six months with interest capitalised.

NAB clients can also defer repayments for up to six months if you're an owner-occupier, investor or on a principal and interest or interest only repayment schedule, while Westpac customers will have the option to defer for three months, with a possible three month extension, for those whose job or income has been affected.

For more information, click here.

STATE STIMULUS

NSW: Premier Gladys Berejiklian unveiled a second package worth $750 million to help businesses affected by the coronavirus pandemic. Payroll tax would for six months be deferred for businesses with payrolls over $10 million and waived for those under $10 million.

Tax relief has also been enacted for pubs, clubs and hotels, as well as rental relief for small businesses working out of government-owned buildings. An additional $74 million will be provided for homelessness, charities, mental health support and energy bill relief.

SOUTH AUSTRALIA: Premier Steven Marshall recently confirmed a massive stimulus package which includes a $300 million fund for businesses and industries, $250 million fund for community groups, $60 million in payroll tax relief for businesses, $30 million for the unemployed, $13 million in land tax relief and the waiving of liquor licensing fees.

TASMANIA: Tasmania has also doubled its stimulus package to $1 billion, which includes $150 million for the health sector as well as cash for businesses, families and the wider community.

QUEENSLAND: The state has unveiled a $4 billion relief package in response to the coronavirus, with $2.5 billion to support workers and businesses, $300 million for households, including $200 off utility bills and $1.2 billion for the health system.

ACT: Chief Minister Andrew Barr has put aside $137 million to help the territory through the coronavirus fallout.

VICTORIA: The Andrews government has launched a $1.7 billion package which includes $500 million to help out of work Victorians find a job. More than $550 million in payroll tax already paid by thousands of businesses will also be refunded and most will receive about $23,000 in immediate support.

WESTERN AUSTRALIA: WA residents will benefit from a $607 million package, with household fees and charges frozen until next year and boosts for businesses and public sector workers.

NORTHERN TERRITORY: The NT Government has also announced a $65 million Jobs Rescue and Recovery plan as a result of the pandemic.

JOB LOSSES

Scores of big-name businesses have shut down as a result of the pandemic with thousands of Australian workers stood down.

While more announcements are made daily, so far, some of the best-known companies which have closed include retailers such as Kathmandu and Rip Curl, Smiggle, Peter Alexander, Just Jeans, Jay Jays, Portmans, Jacqui E, Dotti, Platypus, Hype, Athlete's Foot, Colette, Michael Hill, Sussan, Sportsgirl, Suzanne Grae, Saba, Gorman and Alannah Hill.

Countless stores have closed down because of the virus.
Countless stores have closed down because of the virus.

 

Retail Food Group - the owners of popular chains Gloria Jean's Coffees, Brumby's Bakeries, Donut King, and Michel's Patisserie - said it will stand down or cut the hours of its workforce.

And aviation companies have also taken a massive hit, with around 20,000 Qantas and Jetstar staff stood down.

SMALL BUSINESSES

The government is providing up to $100,000 to eligible small and medium sized businesses and not‑for-profits - including charities - that employ people, with a minimum payment of $20,000.

The purpose of this payment is to boost cashflow and allow organisations to keep the lights on - and keep employees on the books.

Under the scheme, which builds upon the first stimulus package, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000.

In addition, the minimum payment is being increased from $2000 to $10,000. The payment will be available from April 28.

The pandemic has changed everyday life for all Australians.
The pandemic has changed everyday life for all Australians.

 

The payments are tax free, there will be no new forms to fill out, and payments will flow automatically through the ATO to small to medium businesses with an annual turnover of less than $50 million that employ staff.

And from July 28, eligible businesses will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments received.

Another measure is the Coronavirus SME Guarantee Scheme, which will see the government guarantee 50 per cent of new loans issued by eligible lenders to SMEs.

Originally published as What COVID-19 means for your money


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