Social security benefits for a family (COVID-19)

Earlier than COVID-19, Karen was a graphic designer who labored for small advertising firm. Her companion David labored as a sole dealer within the tiling business. They’ve 2 youngsters, aged 6 and 9, who’re enrolled in main college.

David’s work primarily is within the family repairs space, and he makes use of a sub-contractor for some help along with his jobs. He usually pays the sub-contractor $30 per hour on jobs that require a second individual. Earlier than COVID-19, this occurred usually about 32 hours per week (ie. 4 days). The offsider had their very own ABN, and David paid them straight with out withholding tax. He had three sub-contractors that he would name, primarily based on the work to be accomplished and their availability. One other two days per week, on common, David was in a position to full the work personally.

Based mostly on interim figures for 31 December 2019, David was as a consequence of earn roughly $90-95,000 for the 12 months. This was primarily based on usually working about 45 hours per week.

Because of COVID-19, a variety of David’s work has dried up. As an alternative of 45 hours per week, he’s right down to 24 hours on common (3 days). This work is with ongoing contracts, versus one-off jobs. Not one of the sub-contractors are “obtainable for work” anymore.

Karen was working as a mid-level worker on a full-time foundation previous to COVID-19. Her gross weekly wage was $1,355, equating to $70,460 each year. Her superannuation was paid on prime of this, at 9.5%. Attributable to COVID-19, Karen’s firm considerably decreased non-senior workers, and she or he was made redundant on 25 March 2020. Her payout was to be 4 weeks, plus accrued depart of 1 week, which was obtained on 3 April 2020. Regardless of the JobKeeper cost being created by the federal authorities, Karen’s employer is standing by their resolution to make her redundant, leaving Karen unemployed.

David and Karen have gone to their accountant to debate what measures can be found to them, because of the downturn from COVID-19.

Answer

David

David’s earnings after bills and earlier than tax have decreased from normally about $3,960 per fortnight to $2,160 per fortnight because of the decreased degree of contracts.

As he’s self-employed, and his work has decreased by greater than 30%, he’s eligible to use for the JobKeeper cost with the ATO. As David is eligible for JobKeeper, he’ll obtain $1,500 earlier than tax every fortnight.

Throughout COVID-19, David will earn gross earnings of $3,660 ($2,160 + $1,500) per fortnight. He’s additionally eligible to defer any earnings tax funds for six months with the ATO.

Karen

As Karen’s earnings has decreased to nil, she can be eligible to use for the JobSeeker cost which features a Coronavirus complement cost. She doesn’t must serve a ready interval, and no property or liquid property assessments apply.

Nevertheless, Karen can be ineligible to obtain any JobSeeker and Coronavirus complement cost as a result of earnings take a look at. The earnings take a look at, which determines eligibility, takes into consideration David’s earnings. David’s earnings will embody the JobKeeper cost, as it’s taxable in his fingers. As David’s gross earnings is bigger than $3,068 per fortnight, that is above the higher restrict for the help.

Household tax profit

With the discount in earnings, the household could also be entitled to obtain Household Tax Profit (FTB). Nevertheless, FTB is calculated on full monetary 12 months, and have to be estimated for each 2019/20 and 2020/21 earnings years.

As Karen’s earnings would be the decrease earnings for the 2019/20 earnings 12 months, we are going to take a look at her earnings first to find out eligibility for FTB Half B. Firstly, David’s earnings is predicted to be lower than $100,000 for the earnings 12 months. Nevertheless, because the FTB Half B cut-off quantity is $21,973 per earnings 12 months for folks of a kid between 5 and 18 years of age, Karen can be above that quantity primarily based on her earnings for the primary 9 months of the 12 months.

Eligibility for FTB Half A is predicated on whole household earnings for the total 2019/20 earnings 12 months. The restrict at which no quantity is accessible to be paid is $109,379 per earnings 12 months for the household. As at 1 April 2020, the estimated yearly household earnings (David $93,000 and Karen $60,000) is nicely above the FTB Half A restrict for your complete 12 months. The household won’t obtain any quantity for Household Tax Profit Elements A or B within the 2019/20 earnings 12 months.

In relation to the 2020/21 earnings 12 months, Karen can be eligible to use for Household Tax Profit. Nevertheless, it ought to be famous {that a} declare ought to be thought-about fastidiously, primarily based on the understanding that full 12 months incomes are considered. It’s doable {that a} debt could also be utilized later. Based mostly on David incomes an estimated quantity of $93,000, the household can be eligible for the bottom price of FTB Half A, which is $119.56 per fortnight. Additionally, FTB Half B of $110.60 per fortnight can be obtainable.

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