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The accounting profession has largely welcomed the government’s temporary COVID disaster payment, but challenges the eligibility requirements attached to it.
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‘Shouldn’t matter whether they have savings or not’: COVID disaster payment eligibility under spotlight
04 June 2021
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11 minute read
CPA Australia’s general manager of external affairs, Jane Rennie, said that the temporary payment announced by the federal government on Thursday should be made available to everyone unable to work as a result of state and territory-imposed restrictions, not just those who pass eligibility tests.
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“Other federal disaster recovery payments aren’t means-tested and this shouldn’t be either,” Dr Rennie said. “We’re talking about workers who have been denied the ability to earn a living by the government.
“It shouldn’t matter whether they have savings or not. All workers who are unable to work because of lockdown restrictions should be eligible for the COVID disaster payment.”
The new temporary COVID disaster payment will provide financial support for areas defined as COVID-19 national hotspots and are undergoing lockdown for more than seven days.
Workers who are unable to work because of lockdown restrictions will be eligible for $500 a week if they normally work more than 20 hours each week, and those who work less than 20 hours receive $325 weekly until restrictions ease.
To be eligible for the payment, workers must have liquid assets of less than $10,000. Eligible applicants aren’t required to use annual leave entitlements, but must have exhausted all other leave entitlements available to them.
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.
“It’s important that the eligibility criteria for the new COVID disaster payment aren’t prescriptive,” Dr Rennie said. “Some of the conditions that applied to schemes like JobKeeper and coronavirus supplements may not be appropriate.”
Dr Rennie did, however, say that the payment will not only bring welcomed reprieve for Victorian workers, but for the businesses who are unable to support them, too.
“It’s not only workers that benefit from this payment,” Dr Rennie said. “Many small business owners have been worried about the impact that forced lay-offs have had on their workers. This payment should reduce their concerns.
“Casual workers who lose hours in a lockdown may look elsewhere for employment and aren’t always available to return to work when restrictions are lifted. This payment will help employers retain their workforce so that they’re ready to open their doors as soon as they can.”
Susan Franks, senior tax advocate at Chartered Accountants Australia and New Zealand, welcomed the payment, commending the government’s “agile” policy-making and use of Single Touch Payroll infrastructure to verify applicant data.
“CA ANZ welcomes the announcement of support for workers affected by COVID lockdowns by the federal government which complements the Victorian government’s business package announced earlier this week,” Ms Franks said.
“From this announcement, we have seen agile policy-making and now we look forward to seeing how it will be backed up by agile data matching between the Single Touch Payroll system and Services Australia.”
Emergency Management Minister David Littleproud said the new payment will be delivered through Services Australia, with applications to open to affected Victorians on Monday.
“Similar to JobSeeker,” Ms Franks said, “we understand it is expected that workers would be applying for this assistance directly and that information remitted by employers through Single Touch Payroll (STP) may be used to verify some of the criteria such as lost income.
“Since the beginning of this year, Services Australia has been using information from STP to make it easier for Centrelink customers to report their income. STP phase 2, which is scheduled to commence 1 January 2022, will expand the type of information that can be exchanged between STP and Services Australia.”
The Institute of Public Accountants’ general manager of technical policy, Tony Greco, said that it may still be too early to determine whether the payment is sufficient, though he welcomes the payment as a positive measure.
“You’ve got a lot of casuals, you’ve got a lot of employers not being able to afford to continue to pay employees if they’d been shut down,” Mr Greco said. “Yes — I think an income support payment of what was described, it has to be seen as a positive, especially for Victorians.
“I think that extra week would have pushed a lot of people over the limit. There’s a lot of employers who just can’t pay people for doing nothing, or on top of all the other lockdowns.
“We have to make note of the fact that this is the first lockdown where there is no JobKeeper. So, there’s that whole question mark of what they can do that is a little bit different.”
The payment would become available from the date an area — whether a single postcode, a metropolis (like Melbourne) or even an entire state — has been determined a Commonwealth hotspot, and cease as soon as restrictions are lifted.
Mr Morrison said his government has yet to determine the cost of the payment, or how it will be paid for, though he signalled on Thursday that he would be turning to the states affected to split the costs “50–50”.
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