If you're running a Family Day Care service that needs to close or if you have to reduce your business activities due to Coronavirus you may be able to receive support from a variety of different sources. These include Coronavirus Supplement, Early Access To Superannuation, Mortgage and Loan Repayments and more.
- Coronavirus Supplement and Jobseeker Payment
- $750 Cash Payment
- Ability to draw upon any superannuation up to $10,000
- Contacting your bank or lender for financial assistance to defer mortgage and/or other loan repayments
- Rental Assistance through Centrelink for those entitled to Jobseeker Payments
- Assistance for Employers
Coronavirus Supplement and Jobseeker Payment
Coronavirus Supplement and Jobseeker Payment is available to employees, sole-traders and self-employed individuals.
Am I a sole trader? - A sole trader is when you operate your business through your personal name. You can confirm this by going to www.abr.gov.au and enter your ABN (or your name) into the search box.
When your name is displayed you will see Entity Type.
Trading through a Partnership, Company or Trust
While the documentation and information in sections refer to “Sole Traders” only, the documentation in other sections states the benefits relate to sole traders AND the “Self-Employed”.
Unless you are an employee of a scheme, you are generally considered to be self-employed regardless of whether you operate your Family Day Care business as a sole-trader, or through a partnership, trust or company the benefits may be available to you.
In the event that you are an employee, the Accelerated Income Support and Superannuation Lump Sum withdrawal concessions are applicable regardless.
Coronavirus Supplement
This is particularly helpful because this supplement is something you may be entitled to now if you are operating at partial capacity.
Sole traders and casual workers who are currently making less than $1,075 a fortnight will be eligible to receive the full supplement.
You are entitled to receive the supplement for the next 6 months.
Whether the $1,075 is based on your individual income or combined income with your partner, the details are limited, but at this point, it is our understanding that only your individual income which comes into account.
We will be making continuing to make enquiries in relation to this and will update everyone accordingly. If you believe you are entitled to this payment you may wish to make further enquiries to determine whether or not you may be eligible.
Jobseeker Payment
In addition to the Coronavirus Supplement, a Jobseeker Payment is available to employees, sole-traders and self-employed individuals.
The following example, taken from official government documentation, is likely to be the most applicable for Family Day Care Educators:
Melanie is a sole trader operating a family daycare educator from their home.
The economic downturn due to Coronavirus required Melanie to close her business, and her income has been reduced to zero.
Melanie will be able to apply for the new JobSeeker / Coronavirus supplement and will not have her assets included as part of the eligibility assessment for the payment. Melanie will also not be required to serve a Liquid Asset Test Waiting Period, as that has been waived.
Melanie is eligible for the Jobseeker payment and, as she is married, will receive:
- JobSeeker Payment partnered rate of $510.80 per fortnight; plus
- Energy Supplement of $7.90 per fortnight; plus
- Coronavirus supplement of $550 per fortnight
- This brings Melanie’s total fortnightly income support payment to $1,068.70.
$750 Cash Payment
This payment is a payment to be made in April 2020 to all individuals who receive a government pension or allowance including Family Tax Benefit. This will automatically be paid to current recipients.
An additional $750 will be paid in July 2020.
Temporary early access to superannuation
You can access up to $10,000 of your superannuation balance if you are an employee who is made redundant, or had their hours reduced by 20%.
This is also available to educators whose turnover (your income before deductions) decreases by 20%.
Many Family Day Care Educators may not have a superannuation balance of $10,000 or more, and therefore may not have any superannuation available to withdraw, but this is something you should be aware of for family members who may be affected by the virus.
Important: If you are considering withdrawing your superannuation you need to be mindful that many superannuation balances have reduced significantly due to the decreased value of the share market. Withdrawing your superannuation may have a significant impact both upon your balance and it’s earning potential in the future.
It is therefore recommended that you speak to a licenced financial planner if you are considering withdrawing your superannuation.
Mortgage and Loan Repayments
If you have to close or reduce your services and you have a mortgage which you may be unable to make a payment, you should contact your bank or lender to see what they can do to assist you to reduce or stop any loan repayments you may be required to make for up to 6 months.
Important: Banks who defer your repayments will generally capitalise your interest. This means the balance of your loan will increase by the amount of interest you are charged and not being paid as part of your regular payment.
For example, if the balance of your mortgage payable is $400,000 and the interest portion of your loan each month is $1,500 your loan would increase to $401,500. Or if you deferred for 6 months with no repayments, your loan would increase to $409,000 being $400,000 + (6 x $1,500).
Rental Assistance
If you rent, and you are required to apply for Jobseeker Payment, you may be entitled to rental assistance on top of your Jobseeker Payment and Coronavirus Supplement.
There are also current discussions with State and Territory Governments as to other relief or additional rent assistance and protections available to those affected by Coronavirus.
If / when additional rental assistance information becomes available, we will provide further updates.
Employer Assistance
There is significant assistance available to employers. As the majority of educators do not have employees most educators will remain ineligible and have therefore have not included details in those details at this time.
For more information: FDC Tax
Reference:
COVID -19 Support For FDC Services, FDC TAX, 27 March
Disclaimer: This information should be used as a general guide only and support available depends on individual circumstances and eligibility.
