Business & Retirees Support

Circuit Breaker Business Support Package

The Victorian Government has launched the $460 million Circuit Breaker Business Support Package to assist small to medium businesses and sole traders. The package will support businesses unable to operate due to these necessary public health measures, including targeted support for the events industry.

With safety nets such as JobKeeper no longer available, this package provides vital support to businesses doing their part to help keep Victorians safe throughout the circuit breaker action.

Victorian businesses in industries affected by the state's seven-day lockdown are able to apply for grants of up to $5,000.

The package features three initiatives for small and medium businesses and sole traders:

  • The Business Costs Assistance Program
  • The Licensed Hospitality Venue Fund
  • Victorian Events Support Package.

The Business Costs Assistance Program

The Victorian government is spending $371 million to fund a second round of the Business Costs Assistance Program. Businesses and sole traders that are unable to operate under the restrictions and can't work remotely, such as restaurants and cafes, event suppliers, accommodation providers and non-essential retailers, will be able to apply for the grants.

Eligible businesses with an annual payroll of up to $10 million can receive grants of $2,500 or $5,000, depending on their ANZSIC business industry code and how long the business was subject to restrictions. See the Business Victoria application webpage (link below) for full eligibility criteria.

Apply here: Business Costs Assistance Program Round Two | Business Victoria

Licensed Hospitality Venue Fund

The package also includes $70 million to fund a new round of the Licensed Hospitality Venue Fund.

As part of the fund, businesses holding an eligible liquor licence and food certificate will be able to apply for a $3,500 or $7,000 grant per premises.

Application process: Eligible liquor licensees under the Licensed Hospitality Venue Fund 2021 payment have been emailed directly by Business Victoria with a link to their grant application form.

More information here: Licensed Hospitality Venue Fund 2021 | Business Victoria

Victorian Events Support Package

Businesses in the events industry will receive support through a $20 million package dedicated to operators that have incurred losses due to the restrictions.

The value of the grants and application dates will be available on the business.vic.gov.au website.

Applications for the Victorian Events Support Package are not yet open (as of 3 June 2021). Check here for updates: Circuit Breaker Business Support Package | Business Victoria

Federal Government Assistance for Workers

The Morrison Government has announced a Temporary COVID Disaster Payment.

Australians who have had their hours of work and income significantly affected due to state lockdown restrictions will be eligible for a temporary COVID Disaster Payment.

The support will be paid weekly to those workers who reside or work in a Commonwealth declared hotspot and are therefore unable to attend work and earn an income as a result of state imposed health restrictions, which last for longer than one week.

Eligible recipients will receive up to $500 per week for losing 20 hours or more of work, and $325 per week for losing under 20 hours. They must not have liquid assets of more than $10,000.

The payment will be made in respect of the second and any subsequent weeks of restrictions.

This support will be available for Australian citizens and permanent residents and eligible working visa holders. Individuals who are already receiving income support payments, business support payments, or the Pandemic Leave Disaster Payment will not be eligible for this new payment. To qualify, people will need to have exhausted any leave entitlements (other than annual leave) or other special pandemic leave.

Applications for this payment will open from Tuesday 8 June via Services Australia. See this link for more information: How to access and claim payments and services in Victoria - Services Australia

Supporting Retirees with Extension of Superannuation Minimum Drawdowns

The Morrison Government has announced an extension of the temporary reduction in superannuation minimum drawdown rates for a further year to 30 June 2022.

As part of the response to the coronavirus pandemic, the Government responded immediately and reduced the superannuation minimum drawdown rates by 50 per cent for the 2019-20 and 2020-21 income years, ending on 30 June 2021. The latest announcement extends that reduction to the 2021-22 income year.

This extension builds on the additional flexibility announced in the 2021-22 Budget.

As per the current rules, it is expected the 12-month extension will apply to account-based pensions (including transition to retirement income streams), allocated pensions (including transition to retirement pensions), and market-linked pensions (also commonly called term-allocated pensions).

It is also important to consider that different drawdown rates apply to allocated and market-linked pensions. As with the current rules, it is also not expected the extension will apply to lifetime or life expectancy pensions.

While this recent announcement is simply an extension of the current temporary rules, in order to ensure the optimal outcome for clients, it is important to understand that the legislation halves the drawdown rates themselves.

For example, the normal 5 per cent drawdown factor for the recipient of an account-based pension aged 65–74 is now 2.5 per cent.

Simply halving the 'normal' payment amount itself, rather than rate, will often give a different result. While the difference may be small, it can result in a pensioner inadvertently failing the minimum pension rules.

There is no halving of the maximum applicable to transition to retirement income streams or marked-linked pensions.

The current $100,000 per annum threshold for market-linked pensions is also not halved, and it is also important to note this threshold (technically known as the 'defined benefit income cap') will be indexed to $106,250 on 1 July 2021.

Sources:

https://www.pm.gov.au/media/temporary-australian-government-assistance-workers

https://www.pm.gov.au/media/supporting-retirees-extension-temporary-reduction-superannuation-minimum-drawdown-rates

https://www.smsfadviser.com/news/20070-halving-of-minimum-pension-draw-down-rates-extended