COVID-19 Disaster Support Payment boosted: PM and Treasurer

The PM and Treasurer released a joint media release on 28 July 2021 stating “increased financial support for hundreds of thousands of workers in New South Wales will be available from [2 August] as part of the Commonwealth Government’s expanded national COVID-19 Disaster Payment”.

The COVID-19 Disaster Payment focuses on the support for affected workers and details that were first announced on 13 July 2021.

Matters set out in the media release are as follows:

  • eligible workers will receive $750 per week if they lose 20 hours or more of work, while those that lose between 8 and less than 20 hours, or a full day of work, will receive a payment of $450 per week;
  • the new national payment rate will commence for payments processed week commencing 2 August and will be automatically updated for those already in the Services Australia system;
  • it will be available from Day 1 of any potential lockdown in the future, with claims made from Day 8 in arrears for the previous 7 days. A weekly payment will then be made for the duration of the hotspot declaration;
  • there will be no liquid assets test applied to eligibility for these payments and an individual does not need to run down personal annual leave;
  • individuals who currently receive an income support payment will receive a weekly payment of $200, in addition to their existing payment, if they can demonstrate they have lost more than 8 hours of work and meet the other eligibility requirements for the COVID-19 Disaster Payment.

The increased payment rates will be automatically updated for those in the system.

More information about the COVID-19 Disaster Payment can be found on the Services Australia website. It is set out on a State-by-State basis, ie currently NSW, Victoria and South Australia.

Current state of play

The above media release is almost a demonstration how you make an announcement when you don’t want to make an announcement. Since the PM announced the COVID-19 Disaster Payment, the Government has received calls to reinstate JobKeeper which it has consistently rejected.

However, this latest announcement increasing rates etc is pretty much a nod to JobKeeper – without actually being JobKeeper. That said, the system does lack the transparency and simplicity of JobKeeper.

– Ian Murray-Jones, Senior Tax Writer, Thomson Reuters

As noted above, the Disaster Payment is tailored on a State-by-State basis, currently NSW, Victoria and South Australia (ie the only States that have implemented lockdown orders recently). Taking NSW as a guide, it is not possible to state definitively how much an applicant will get each week. It is not a simple number (as it was for JobKeeper), but rather a matrix which determines the payment based on:

  • where the applicant lives, ie “Parts of Sydney payments”, “Greater Sydney payments” and “all other parts of NSW” (ie rural people get less than Greater Sydney residents);
  • how much work has been lost, “8 to 20 hours”, “full day of a usual work week” and “20 hours or more of work”; and
  • the period the payment is referable to, ie “1 July to 14 July”, “15 July to 30 July”, but also “18 July to 30 July” (ie some weeks the rate is less than others).

By way of a fuller briefing, there are also eligibility requirements which are unchanged, namely the applicant:

  • must be an Australian resident or holds a visa giving the right to work in Australia;
  • is aged 17 years or older;
  • does not get an income support payment, ABSTUDY Living Allowance, Dad and Partner Pay or Parental Leave Pay;
  • is not getting the Pandemic Leave Disaster Payment, a State or Territory pandemic payment or a State small business payment for the same period; and
  • has lost income on or after Day 8 and does not have any appropriate paid leave entitlements.

Applications are to be made online. In addition, recipients must advise of any changes of circumstances, including the following:

  • change of employment (eg new employer);
  • changes in hours of work compared to the last claiming period;
  • change in bank account details;
  • change in residency states residence status;
  • changed in the place where the recipient lives or works; and
  • if no longer subject to a second public health order as a result of being present in a COVID-19 hotspot.

Recipients should also advise of they start to receive any of the following:

  • Pandemic Leave Disaster Payment;
  • any State based pandemic payment;
  • employer funded pandemic-related leave entitlements; and
  • an income support payment for any days in the same claiming period as the COVID-19 Disaster Payment.

It might be observed that there is always a push to simplify income tax etc. The ongoing changes and complexity of these COVID-related payments demonstrate that implementing any revenue based rules seems to automatically invite complexity. This is exacerbated by what could be described as policy on the run, ie changes and tweaks which are announced as “new”. Policy on the run is somewhat understandable in the current environment – viruses don’t keep still, do they – but it can make it challenging for practitioners, advisers and businesses to stay on top of it all.

This article was first published in Thomson Reuters’ Weekly Tax Bulletin.

Ian has worked at Thomson Reuters for over 15 years as a senior tax analyst with expertise in income tax and GST. He has been involved in tax publishing for over 25 years.

Prior to his tax writing career, Ian worked as a manager for a Big 4 accountancy firm and then with a firm which provided specialist tax advice for the music and recording industry.

Ian holds a Bachelor of Economics degree, is a Chartered Accountant and a registered tax agent. Among other things, Ian is the author of the Australian GST Handbook, the GST Commentary Service, the Australian Financial Planning Handbook and the specialist income tax commentary services, as well as being a regular contributor to the news services.

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