THIS SITE IS INTENDED FOR ADVISER USE ONLY

By clicking through to the Adviser content within, you confirm that you are a licensed adviser operating under an Australian Financial Services License.

I'm an Adviser

I'm not an Adviser

The Government's Coronavirus economic support package: super and pension provisions

The Government has announced its economic support package designed to help Australians who are under financial stress as a result of the Coronavirus. The measures became law last week and we now have more details about how members can apply.

We also have a range of support material available to help you better understand these provisions (as well as the other elements of the Government’s economic support package) and to share with your clients:

Early Release of Super

  • The Government is allowing eligible Australians to apply to withdraw up to:

    • $10,000 of their superannuation in financial year 2019-20 (before 1 July 2020), and
    • Up to a further $10,000 in financial year 2020-21 (from 1 July until 24 September 2020).
       
  • Members can apply for early access to your super through myGov from Monday 20 April.

    • Your clients register your interest with the ATO now by logging in to their myGov account and following the ‘Intention to access coronavirus support’ instructions. 
    • The ATO will then notify your client by email or SMS when applications for early access open.
    • If your client doesn’t already have a myGov account, they can set one up by selecting 'Create an account'.

  • Visit the ATO website.

Reducing minimum pension payments

  • The Government has announced it is reducing the minimum pension payment requirement for account based pensions and similar products by 50% in both 2019-20 and 2020-21 financial years.

  • The amount by which your client can reduce their pension payment will depend on their age:

    Age Minimum annual pension payment NEW* optional minimum annual pension payment for 2019-20 and 2020-21
    Under 65 4% 2%
    65-74 5% 2.5%
    75-79 6% 3%
    80-84 7% 3.5%
    85-89 9% 4.5%
    90-94 11% 5.5%
    95+ 14% 7%

    *Note: Your clients can still choose to take above the minimum.

    Other things to be aware of:

    • Minimum percentages are calculated on account balance at commencement of the pension date and at the start of each subsequent financial year.
    • Pension payment amounts for the current financial year (2019/20) will remain the same unless you or your client requests to change it.
  • Your clients can request to reduce their pension payments at any time.

    If your client requests to reduce their pension payment to the new minimum or to a specified amount below the current minimum, the earliest we expect to apply the change is from 23 April 2020 (if they are paid fortnightly) or 24 April 2020 (if they are paid monthly).

     

  • There are a couple of ways your client can reduce their pension payments:

    • By completing the ‘Pension Payment Update’ form and uploading it via FirstNet or by emailing it to ClientMaintenance@cba.com.au with the email subject heading: Change of Pension Payments – Reduction In Minimums. We also accept this form via post. 
    • Online in FirstNet: We are working to enable pension payment updates online from mid-April.


    Things to be aware of:

    • If your client has already been receiving the minimum pension payment on the previous rates and they request to reduce their payments to the new minimum, we will stop any further pension payments for the 2019/2020 financial year.

     

  • You can read more in this Government factsheet.

Reducing deeming rates

    • The Government is reducing the deeming rates by a further 0.25 percentage points on top of the already announced 0.5% reduction to reflect the latest cash rate reductions by the RBA.
    • As a result, the lower deeming rate will be 0.25% and the upper deeming rate will be 2.25%.
    • The Government will automatically apply the lower rates from 1 May 2020, with any increased Age Pension entitlements paid from that date.
  • You can read more in this Government factsheet.

Insurance cover for Coronavirus

Your clients with death, total and permanent disablement or income protection within their Colonial First State super account will be covered for Coronavirus.

While the Product Disclosure Statement provides the insurer with an option to apply an exclusion for pandemics for new members, our insurer has informed us they will not be applying that option.

If your client is intending to take advantage of the Government initiative regarding early access to your super and they wish to keep their current insurance cover, please ensure they retain enough funds in their account to cover insurance premiums so that it will not be at risk of being cancelled.

Market volatility continues

Markets continue to feel the effects of Coronavirus. We continue to closely monitor the situation and our teams are regularly communicating with investment managers. Together we’re actively managing the risks and opportunities in investment markets as developments unfold.

We have a wide range of information on our website to help you and your clients, including the latest market updates and tips for managing volatile periods. 

Support for Commbank Customers

CommBank is updating their coronavirus support page regularly with the latest advice and guidance. They’ve also developed a Financial Support Guide which outlines some of the support measures available for individuals impacted, including people whose jobs have been affected and retirees

If you and clients are not Commbank customers, many other banks are providing similar support packages and information so please get in touch with your bank. 

Our business response to Coronavirus

Here are just some of the steps we’re taking to prioritise the health, safety and wellbeing of our employees and limit the impact to our members:

  • We’re closely following advice from the Australian Government and Australia’s Chief Medical Officer and are taking practical precautions in line with the latest guidance from both federal and state authorities. 
  • We have robust remote working capabilities and continue to monitor arrangements to meet the increased use across all our teams.
  • Our business continuity coordinators and leadership teams meet daily to assess the evolving situation and adjust our responses as required.

Be aware of scams involving Coronavirus

Visit the Stay Smart Online website for information about Coronavirus scams and how to stay safe. If you or your client think you have been scammed, you can make a report on the Scamwatch website, and find more information about where to get help.

Support for you and your clients

We’re experiencing higher than usual call volumes, email enquiries and extended wait times. We apologise for any inconvenience. If you need to speak with us, we will do our best to get back to you in a timely manner. We also provide a range of online information, resources and self-service options for members available here.

If you would like more information, please contact your local Advice Relationships team or our Adviser Services team on 13 18 36 (8am – 7pm, Monday to Friday, Sydney time).

ADVISER USE ONLY

Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (Colonial First State) is the issuer of FirstChoice Personal Super, FirstChoice Wholesale Personal Super, FirstChoice Pension, FirstChoice Wholesale Pension, FirstChoice Employer Super offered from the Colonial First State FirstChoice Superannuation Trust ABN 26 458 298 557. It also issues interests in the Rollover & Superannuation Fund (ROSCO) and Personal Pension Plan (PPP) offered from the Colonial First State Rollover & Superannuation Fund ABN 88 854 638 840. This is based on the understanding of the initiatives that have been announced by the Commonwealth Government and current regulatory requirements and laws as at March 2020. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), to the maximum extent permitted by law, no person including Colonial First State or any member of the Commonwealth Bank group of companies, accepts responsibility for any loss suffered by any person arising from reliance on this information. This document provides information for the adviser only and is not to be handed on to any investor. It does not take into account any person’s individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) and Financial Services Guide (FSG) before making any recommendations to a client. Clients should read the PDS and FSG before making an investment decision and consider talking to a financial adviser. The PDS and FSG can be obtained from colonialfirststate.com.au or by calling us on 13 18 36.

Contact us

The content displayed on this page is intended for financial advisers only