Following the recent lockdown in Sydney which commenced in late June, the Commonwealth government is offering monetary compensation for workers (i.e. employees and sole traders unable to operate their business from home) who have been financially impacted by a state public movement order (i.e. lockdown) now that JobKeeper is no longer on foot.
The compensation is in the form of COVID-19 Disaster Payments. This payment has application across all of Australia, once a jurisdiction is subject to a public movement order. Accordingly, it was extended to Victoria and South Australia once those jurisdictions were locked down in July.
To qualify you must fall into one of the following circumstances:
- you live in, work from or have visited a Commonwealth-declared COVID-19 hotspot that is subject to a state restricted movement order
- you were unable to earn your usual income because you were in the COVID-19 hotspot and are subject to restricted movement order when you return to your work or where you live.
Additionally, you must:
- be at least 17 years of age
- be an Australian resident or hold a visa class permitting you to work in Australia
- have lost work (full-time, part-time or casual or as a sole trader) during a week or a full day of your usual work as a result of a movement order. A full day or your usual work is what you were scheduled to work but could not work because you were locked down. A minimum of 8 hours per week applies in some states. This criterial must be re-tested for each week before making a claim for that week
- you are not in receipt of an income support payment, ABSTUDY Living Allowance, Dad and Partner Pay or Parental Leave Pay
- you are not in receipt of the Pandemic Leave Disaster Payment, a state or territory pandemic payment or a state small business payment for the same period
- you have lost income and don’t have any appropriate paid leave entitlements.
Losing work includes being stood down, not being assigned any shifts for the week of restrictions, or being unable to work from home.
To be clear, you need only be eligible for one day of a week of restrictions to qualify for the entire week.
Do I have to exhaust my leave first?
Importantly, you are not required to exhaust or even dip into your annual leave or long service that you have accrued. However ‘appropriate paid leave’ that you must use before receiving the Disaster Payment includes special pandemic leave, paid sick or carers leave only when you are sick or injured or need to care for an immediate family/household member who is sick or injured, or for an emergency.
Is there an assets test?
The liquid assets rules, which applied for the first two weeks of the payment in New South Wales, have been scrapped. Liquid assets are any funds readily available to you in cash or savings, or assets that can easily be converted into cash. It also includes money loaned to other people.
This depends on how much work you have lost during the week. If you have lost more than 20 hours of paid employment, the amount of compensation is $600 per week. If less than 20 hours, the payment is $375 per week (a minimum of 8 hours applies in some states). The money will be paid into your bank account by Centrelink.
By way of comparison, this is approximately the same rate that applied under JobKeeper version 2 (from 28 September 2020 to 4 January 2021), but less generous than the original version of where fortnightly payments of up to $1,500 were available.
The disaster payment is taxable. Unlike JobKeeper, however, tax will not be withheld from the payment. This is because it is paid to recipients (straight into their bank account) by Centrelink who usually do not withhold tax from taxable payments they make. You can however request withholding by using your Centrelink online account through myGov
If the Disaster Payment is your only source of employment-related income for the period and you are claiming the tax-free threshold, the standard weekly tax usually withheld is $58* (for the $600 payment) or $3* (for the $375). These figures can be used to make provision for your year-end tax liability. *Please note individual variances may apply.
How to claim? Which areas are the affected areas? Other state-specific criteria?
The sign up and claim system is very streamlined. For more details of this and other state-specific details of the payment, see the following links:
If your state or territory is in the future subject to lockdown, check back here for the specific details of those Disaster Payment rules.