With a pandemic currently causing an economic crisis around the world, how do you make sure you have the help you need to stay afloat. While having an emergency fund is a great way to make ends meet in times of crisis, even that might not be enough during this time of uncertainty.
Luckily, there are a lot of financial tools available to you to ensure you’re staying above water. Not everyone’s budget is ready for a virus outbreak. Whether you’ve lost your job, you’re temporarily out of hours at work, or you’re no longer able to afford your current living expenses, we’ve got you covered. Keep reading to learn how to find coronavirus financial help in these difficult times.
Why Do People Need Financial Help?
Currently, more people than ever before are experiencing financial hardship or job loss due to the rapid spread of the coronavirus. This virus is a global pandemic, affecting industries across the globe. Since Governments are encouraging people to practise social distancing, many businesses have closed temporarily or even shut down permanently.
Suddenly, people are finding themselves without any form of income. Both individuals and business owners are scrambling to make ends meet to afford household expenses, rent or mortgage payments, and more.
In addition, the uncertainty of not knowing when times will return to “normal” makes this even more challenging. It’s hard to budget for the future no matter how much savings one has when they don’t know how long they’ll be out of work. Unfortunately, it’s not clear when things will return to the way they were prior to the virus or if that will happen at all.
Is There Coronavirus Financial Help from the Government?
Australia’s Government announced specific payments to help people affected by the coronavirus. In addition, there’s a simplified process for getting the unemployment assistance you need if you find yourself suddenly out of work.
If you currently receive an income support payment through the Government, you’ll automatically get an extra $550 a fortnight on top of this income. This will be automatic for those who already receive:
- JobSeeker Payment (previously Newstart Allowance), Partner Allowance, Sickness Allowance, Widow Allowance, and Wife Pension
- Youth Allowance for job seekers, students, and apprentices
- Austudy for students and apprentices
- ABSTUDY for students with Living Allowances
- Farm Household Allowance
- Parenting Payment for both partnered and single
- Special Benefit
You don’t need to do anything if you already get one of these payments. The new payments begin 27 April 2020 and continue for up to 6 months as long as you’re still eligible.
How to Claim Coronavirus Financial Help if You Now Qualify
If any of the programs above now apply to you, you’ll need to lodge an application through your Centrelink account online. For example, if you’re suddenly laid off, you can claim this supplement from the Government through the JobSeeker Payment. If you fall ill, you can claim the Sickness Allowance.
Review the specific types of Centrelink payments to determine which is the right fit for your situation. This money is readily available for those who need it. Don’t feel ashamed about asking for the financial care you need during this time of crisis, even if it’s only temporary.
Who Qualifies for Aid?
One unique experience shared by many amidst the coronavirus is temporary job loss. Many permanent employees have experienced a reduction in hours, though they might pick up at an unknown time in the future. In addition, many people are self-employed or contractors who don’t have the same safety net as a traditional employer.
The good news is the Australian Government temporarily increased eligibility for both the JobSeeker Payment and Youth Allowance. If you’re in any of the following situations, you can apply:
- A permanent employee who lost their job or hours
- Sole trader, self-employed, casual, or contract worker who lost income
- You’re caring for someone affected by the coronavirus
While income testing still applies, asset testing was waived from the process for 6 months. The waiting period for newly arrived residents and seasonal work has also been eliminated temporarily.
Can I Access My Superannuation?
Because this is a time of crisis, many people might wonder if they’re able to access their superannuation. While you can always access these funds, they’re typically tied to a steep tax. This exists to encourage people to save for the future instead of using their super as a savings fund.
However, the Government is temporarily allowing those affected by the coronavirus to access up to $10,000 of their superannuation in 2019-20. They can also access another $10,000 in 2020-21. There will be no taxes on amounts released within these limits, and these withdrawals won’t affect Centrelink payments.
Making a Plan Forward
Aside from Government assistance, you can use this time to make a financial plan. There’s no one-size-fits-all solution, but there are clear steps to take forward. The next things you need to do are similar to how you’d approach any kind of job loss, though you’ll also need to factor social distancing into the equation.
The reality is that many people will likely face the consequences of coronavirus pandemic for a long time. While there is coronavirus financial help available, as outlined above, this isn’t always enough. It’s much more challenging to stay on track with your debt and savings goals if you’re temporarily out of work.
However, it’s important to focus on what you can control during times of crisis, not what you can’t. Though it might not seem like it, now is a great time to make a plan forward and create strong financial habits. Try these financial tips to protect your finances during the pandemic:
- Focus on the basics – Don’t overwhelm yourself trying to do everything at once. Don’t panic, and instead focus on securing food, water, and shelter. There are many local food pantries and organisations that help those in need. Don’t be afraid to call upon these resources.
- Create a budget – Since you might not have income coming in for a period of time, create a strict budget. This should cover the basics you need to survive for up to 3 months as well. Be sure to include any income assistance from the Government.
- Talk to your employer – If you’re not sure whether your employer will stay open, talk to them. Discuss work-from-home options, if available, and talk about their timelines for returning to work.
- Consider a side hustle – If you are laid off and find yourself with more free time, now is the time to start a side hustle or learn a new skill. Things like grocery delivery, contract workers, and so on are in high demand.
- Tap into your savings – For those with an emergency fund, this is the time to use it. Having savings put aside for life’s unexpected moments eases this burden on the entire family. If you don’t already have an emergency fund, make a plan for building one in the future.
- Ask for help – We’re all in this situation together. If you need help, ask for it. Whether friends and family help you buy meals for your family or you stay with a loved one for a while, look for ways to come together.
How to Avoid Scams During Coronavirus
Unfortunately, this is the type of economic environment where scams and misinformation really come out to play. Scammers are waiting for opportunities to prey on those who are worried about the future. They know people are desperate for solutions, and they’re ready with a too-good-to-be-true option.
Avoid things like payday loans that might trap you in a cycle of expensive and endless debt. In addition, avoid any get-rich-quick jobs or schemes that seem unrealistic. Only use reputable, trusted job sites to search for new employment opportunities.
Finally, when applying for Government assistance, remember to go through Centrelink. Third-party scammers might convince you they have another way to apply for Government funds, but this isn’t the case. Never give your bank information or anything else to someone you don’t know and trust.
Do You Need Help with Your Finances During the Coronavirus?
If you’re struggling to make ends meet now that the world seems to have flipped upside down, you’re not alone. Everyone is feeling the effects of this pandemic in some way, shape, or form. Not only are people falling sick, but the economic impact is severe.
If you need help with your money during the coronavirus, don’t delay. The sooner you take action the more time you’ll have to put a plan in place. Many creditors are willing to work with you right now to keep your credit rating and your bank account in good standing. There are many ways to get through this, and you don’t have to face any of these difficult decisions alone.
At Debt Busters, we have over 15 years of experience helping Aussie’s recover from tricky financial situations. While this pandemic might be unprecedented in our lifetimes, we still have an expert team ready to help. Whether you’re struggling to pay your bills or worried about your savings, contact one of our friendly team members today on 1300 368 322. We’re here to help.