Federal COVID-19 disaster payment to be phased out

The COVID-19 disaster payment that has supported individuals unable to work in their usual employment due to the effects of lockdowns will be phased out gradually as the various States and Territories reaches vaccine targets of 70% and 80%. This means that depending on the State/Territory that you live and work in the date of phase out may differ. For example, it is expected that NSW will reach the 70% full vaccination target around 10 October, while Victoria won’t reach that target until at least 26 October.

The government has announced the phasing out of the COVID-19 disaster payment to individuals as the country gradually reaches various vaccine targets and learns to live with the virus. The payment was begrudgingly provided by the Federal government during the current wave of lockdowns after criticisms and calls to bring back to JobKeeper which kept the relationship between employers and employee intact.

In essence, the payment provided support for eligible individuals who are unable to work in their usual employment due to COVID-19 but is paid through Services Australia (Centrelink) instead of employers. Individuals that lose 20 or more hours of work were able to receive up to $750 per week, and those that lose between 8 and 20 hours per week could receive up to $450 per week. Those individuals on income support such as JobSeeker were eligible for $200 per week in addition to their support payments if they lose over 8 hours of work.

According to the government, once a State or Territory reaches 70% full vaccination of its population in those individuals 16 or older, the automatic renewal of the COVID-19 disaster payment will end and individuals will have to reapply each week to Services Australia (Centrelink) to confirm their eligibility. Remember, to be eligible for the payment, an individual has to either live or work in a Commonwealth-declared COVID-19 hotspot. Therefore, to reapply and be eligible for the payment the “hotspot” declaration must still be in place at the time of application. This information can be found on the Commonwealth Department of Health website.

In addition, once a State or Territory reaches 80% full vaccination of its population (16 years or older), the COVID-19 disaster payment will step down over a 2-week period before ending completely even for those still in a Commonwealth declared hotspot. Logistically, how it will work is, in the first week after a State or Territory has reached 80% vaccination, the COVID-19 disaster payment will be a flat rate of $450 for those that have lost more than 8 hours of work. The payment for those an income support will be reduced to $100 (down from $200).

Following that, in the second week, the COVID-19 disaster payment will be bought into line with the JobSeeker rate of $320 per week for those that have lost more than 8 hours of work, while the payment will no longer be made to those on income support. Presumably, after the second week, those individuals still in need of support will need to apply for the JobSeeker or other income support payments as the disaster payment will end completely after the second week.

For individuals that have gotten their hours back but may still need support in relation to future quarantining requirements, the government has decided to leave the pandemic leave disaster payment in place until 30 June 2022. This consists of $1,500 for each 14 day period to support individuals who must self-isolate or quarantine at home.

For the States and Territories that currently have hotspot declarations, based on projections, NSW will reach the 70% full vaccination target around 10 October and the 80% target around 31 October, which means the disaster payment is due to phase out very soon for eligible NSW recipients. While eligible Victorian recipients of the disaster payments will have until 26 October and 5 November before the State reaches the 70% and 80% target, respectively. ACT is on a similar trajectory to NSW and is expected to reach the 70% target around 9 October and the 80% target around 21 October.

How will it affect you?

If you’re currently receiving the COVID-19 disaster payment due to losing hours of work, beware that your payment could soon be cut down depending on when vaccine targets are reached. If you need a cash buffer to protect against the phasing out the payment and haven’t lodged your tax return, we can take all the hassle out and get you the maximum refund.