Posted on 03/04/2020
COVID-19, is having extraordinary impacts on our daily lives, with the information and advice regarding how the Coronavirus pandemic needs to be managed changing on a daily, even hourly basis. As a result of the economic impact of the pandemic, job losses have been sudden and far reaching.
Whether your job loss is temporary or permanent, it can cause significant shock. Once you are over the initial shock, we recommend you do the following 5 things to help reduce the ongoing impact to your livelihood.
- Speak with your Employer – even if you have recently been stood down. The JobKeeper payment is the latest government imitative to help businesses cover the cost of their staff wages; this may ultimately help you keep your job and your income.
Eligible employees are expected to receive at least $1,500 per fortnight from their employer, with the government subsidising these costs for up to 6 months.
It is expected that if you have already been stood down, and both you and your employer are eligible, you could receive payments in May – backdated to 30 March.
- Speak with Centrelink - the government has recently allowed easier access to payments for those who have had a reduction in their work hours due to the Coronavirus. Register your intent to claim early and understand what you may be entitled to.
- Access to your Super - the government announced temporary measures to allow for early access to super for eligible persons, allowing you, if eligible, to gain early access to up to $10,000 before 30 June 2020 and another $10,000 from 1st July 2020 (and before 24 September 2020). These payments are tax free and will not impact Centrelink entitlements. Whilst this can provide much needed funds, you need to be aware of the long term impact on your retirement savings and any other entitlements you might have with your membership or account.
For most, your super will be worth less today than it was 3 months ago due to the broad economic impact of the Coronavirus. Therefore taking money out of your super now, may mean you are crystallising losses that have already occurred because of the downturn in the market. This could have an impact on anticipated earnings.
- Understand what your ongoing income needs are - work out what you can and can’t live without. It may also be possible to negotiate a reduction or a halt on payments of your key expenses:
a) If you have a mortgage, speak with your bank as some have announced they can pause payments for up to 6 months.
b) If you are renting, speak with your landlord or the agent as the government has announced protections for those who are unable to make payments due to financial hardship.
c) Contact the suppliers of your other services such as electricity, gas and phone – as many have policies to support those experiencing financial hardship.
Please remember, pausing or deferring payments may impact you in the future. The payments you are not making now may need to be paid once you are employed again. In the case of mortgages, interest will still accrue and will be payable once you are in a better position to recommence payments.
- Seek advice from a qualified Financial Planner - this can not only provide peace of mind, but they will guide you through your options and prioritise, and help you understand how long your money is likely to last.