The Federal Government’s coronavirus supplement is starting to flow, giving a $550 fortnightly welfare boost to many, but did you know the payment is taxable and it might not come through for another 14 days?
The supplement will be available for up to six months and will be automatically paid to new and existing people on income support including the JobSeeker payment (formerly known as the Newstart allowance), sickness and youth allowance and Austud.
It’s been especially welcomed by JobSeeker recipients, with the temporary supplement to double their baseline allowance to $1,100 a fortnight.
The government says the payments will begin from April 27, but what does it mean if you’re yet to see the money drop into your bank account?
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Why haven’t I got the money yet?
If you got paid on Monday or Tuesday, and didn’t get the extra $550, it could be because those payments are for a period ending before April 27.
Services Australia which is the government department that delivers Centrelink services has said you’ll only start to receive the extra fortnightly payments once you’ve reported your income for the pay period that includes April 27.
Your regular payment will need to be at least $1 for the supplement to go through.
The supplement has started showing in future payments for some people but if it hasn’t yet don’t worry! it should appear as a future payment in the coming days.
At a Senate committee investigating the national response to COVID-19, Treasury Secretary Steven Kennedy hit back at suggestions that support for unemployed Australians and businesses was rolling out too slowly.
“We have not seen a shock hit this fast in any period,” he said.
“And making literally billions of dollars of payments within four weeks of their announcement which I appreciate is of no comfort to the broader community that’s been hit by these shutdowns I would actually regard as a rapid payment of money.”
He said $10 billion had been paid over the past three weeks, and it was expected three times that amount would flow in the next month.
Is the coronavirus supplement taxable?
Yes it is. This is because most government benefits are taxable income.
The Australia Taxation Office said government payments such as the age pension, carer payments, Austudy, JobSeeker Payment, Newstart and Youth Allowance must be declared on your tax return.
The coronavirus supplement is taxable and needs to be declared.(AAP: Stefan Postles)
Some government payments are exempt from income tax but you still need to declare them.
The information is used to work out whether you are eligible to receive a range of government benefits and tax offsets.
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H&R Block’s Director of Tax Communications Mark Chapman said the supplement would be treated the same as JobSeeker come tax time.
“The $550 additional payment during the coronavirus is not strictly speaking a supplement,” he said.
“The government has simply temporarily doubled the normal JobSeeker rate for six months.
“The actual tax treatment is the same as the normal $550 JobSeeker payment.
Mr Chapman said the supplement would be included as income with the standard tax-free thresholds to apply.
“The tax-free threshold is $18.200. You aren’t subject to tax if your total income from all sources is less than this figure,” he said.
“So, if you’ve already had tax deducted from any income (including JobSeeker) and it turns out that your total income is less than $18,200, you will get a refund of the tax paid when you lodge our tax return.
“If your income is over $18,200, you’ll be pay tax at the normal rates, which start at 19 per cent between $18,200 and $37,000.”
DISCLAIMER: This is general advice only. If you need individual advice, please see a professional.
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Will the supplement be back-paid?
No. The Coronavirus Supplement isn’t back paid and will start from April 27.
How do I get the supplement?
You will automatically get the $550 fortnightly coronavirus supplement if you are currently receiving:
- JobSeeker Payment (formerly Newstart Allowance)
- Partner Allowance
- Widow Allowance
- Sickness Allowance
- Youth Allowance
- ABSTUDY Living Allowance
- Parenting Payment
- Farm Household Allowance
- Special Benefit
If you’re not currently receiving welfare, you’ll need to apply. We have a guide to help you out if you’re applying for Centrelink the first time.
Remember, the Government has temporarily expanded eligibility for the JobSeeker and Youth Allowance payments, meaning you may be eligible if you’re:
- A permanent employee who has been stood down or lost your job
- A sole trader, self-employed, a casual or contract worker whose income has reduced
- Caring for someone who’s affected by coronavirus
If your partner earns more than $79,762 a year you will not be eligible for JobSeeker payments (the partner income threshold was increased from $48,100 on March 30).
The Coronavirus Supplement temporarily doubles the JobSeeker payments to $1,100 a fortnight.(ABC News)
What about this other payment of $750?
The Federal Government has also paid about 6.8 million eligible recipients a one-off Economic Support Payment of $750.
If you are an existing payment recipient or concession card holder, or if you applied for Centrelink before April 13, you should have received the first payment.
The Australian Department of Social Services said payments were made from March 31, and should have been received by the majority of recipients by April 17.
A second payment of $750 will be provided to about 5 million people under the same eligibility criteria if they don’t receive the coronavirus supplement.
It will be automatically paid from July 13 onwards.
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