Economic response to the coronavirus

The Australian Government is making temporary changes to superannuation to provide support for individuals impacted by the coronavirus.

At QSuper we’re committed to supporting our members and their employers, and never more so than during the current coronavirus health crisis.

The Australian Government recently announced a suite of changes to superannuation as part of a support package for individuals and business. We’re here to keep you informed about how these changes impact our members and their employers and provide useful resources and links for accessing the most up-to-date information.

The new superannuation measures include the following:

Temporary reduction in minimum drawdown rates

To help retirees minimise the impact of market volatility, the Government will temporarily reduce superannuation minimum drawdown requirements for account-based pensions (such as QSuper’s Income account) and similar products by 50% for 2019-20 and 2020-21. This measure is intended to provide retirees with more flexibility as to how they manage their superannuation.

This means that drawdown rates will change as follows:

Here are the common questions our members are asking us about this change.

Treasury has also released a factsheet so that you can find out more about the proposed legislation.

Changes to social security deeming rates

In response to the current low interest rate environment, the government has reduced the deeming rate effective 1 May 2020. The government expects the change to benefit around 900,000 income support recipients, including Age Pensioners.¹

From 1 May, deeming rates will be:

For singles:

For couples and at least one of you get a pension:

According to the government, the new, lower deeming rates will mean more money in the pockets of older Australians receiving a part-pension.

Here is some more information on how deeming works.

Temporary early access to superannuation

The Government will allow individuals financially impacted as a result of the coronavirus to apply to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-2021 (conditions and eligibility apply). (This is no longer available).

The amounts released will not be subject to tax and will not affect Centrelink or Veterans’ Affairs payments.

The government has specified that 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% or more; or
• if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20% or more.

Here are the common questions our members are asking us about this change.

Treasury has also released a factsheet so that you can find out more about the proposed legislation.

Find out about the other ways you may be able to access your super early.

How to find out more

For more information on the Australian Government’s Economic Response to the coronavirus visit treasury.gov.au/coronavirus

 

1. Joint media release, The Hon. Scott Morrison MP (Prime Minister), The Hon. Josh Frydenberg MP (Treasurer) 22 March 2020