Economic stimulus packages for superannuation explained

Over the past few weeks, the Government has announced two economic stimulus packages to cushion the economic impact of the Coronavirus.

A total of $189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business.

This includes $17.6 billion for the Government’s first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to deliver easier access to finance, and $66.1 billion in the weekend’s economic support package.

There are some important superannuation measures that you should be aware of:

As of 1 May 2020, the upper deeming rate will be 2.25% and the lower deeming rate will be 0.25%.

The reductions reflect the low interest rate environment and its impact on the income from savings.

The change will benefit around 900,000 income support recipients, including around 565,000 people on the Age Pension who will, on average, receive around $105 more per fortnight from the Age Pension in the first full year that the reduced rates apply.

The changes will be effective from 1 May 2020.

While superannuation helps people save for retirement, the Government recognises that for those significantly financially affected by the Coronavirus, accessing some of their superannuation today may outweigh the benefits of maintaining those savings until retirement.

Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020.

They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation).

The exact eligibility requirements will be formed in the coming days, but broadly, to apply for early release you must satisfy any one or more of the following requirements: