- The Savvy Promise
At Savvy, our mission is to empower you to make informed financial choices. While we maintain stringent editorial standards, this article may include mentions of products offered by our partners. Here’s how we generate income.
In this article
Preparing our finances and benefits for unemployment can help stave off some of the economic pain that we find ourselves in right now. As more and more businesses shut down to contain the spread of coronavirus disease (COVID-19) the prospect of people becoming unemployed looms larger.
As of 21st of March, the Federal Government and State Governments have resolved to shut down non-essential businesses where many people gather.
This includes pubs, clubs, sporting venues, religious venues, and other related industries.
Restaurants and cafes will only be allowed to offer takeaway and delivery services.
More businesses may close if the public ignores social distancing directives.
This will cause much economic hardship; it’s already caused many hospitality and retail workers to have their shifts cut back. Some will be laid off.
Some jobs can transition from offices to work from home, but trades and other outdoor-based occupations cannot.
Here is how you can prepare for unemployment amid this COVID-19 outbreak.
How to prepare yourself for unemployment
Though many businesses are cutting prices and offering deals, resist the temptation and funnel as much money as you can into paying off your debts such as credit cards.
You may also want to investigate taking out loan insurance or income protection insurance. The latter can pay you 85% of your income while you look for work. The length of payouts and coverage vary from insurer to insurer.
The general advice is to cut down on your spending, pay down your debts, and try to save as much as you can in the event you are unemployed.
If you do need to spend, try to spend within your local economy and community so you can support the businesses around you.
The $66 billion safety net
In addition to a $17.8 billion coronavirus disease stimulus package, the Federal Government is also speeding up $66 billion in relief for workers and retirees.
Workers such as casuals and sole traders (contractors) who have been affected by the economic downturn can apply for a “coronavirus supplement” of $550 a fortnight for the next six months. This is given out on top of benefits such as Jobseeker (formerly Newstart) allowance.
Sole traders and casuals making less than $1,075 a fortnight can claim the full supplement.
Single parents will get about $1,162 a fortnight.
Casuals and sole traders can also access their superannuation accounts. If their income has been reduced by 20% or more, they can withdraw up to $10,000 tax free.
Households may also be able to claim a $750 stimulus payment.
The government will make payments from July 13 to Australians who receive an age pension, a carers allowance or family tax benefit and Commonwealth senior card holders.
The Government is trying to keep people employed
Even if there is a mass economic downturn due to the spread of coronavirus, the government is trying to support businesses to keep people employed.
Not-for-profits and small businesses with a turnover of under $50 million will receive a tax-free cash payment of up to $100,000 to help keep staff employed and to keep functioning.
The Government expects 690,000 businesses employing 7.8 million people and 30,000 not-for-profits will be eligible for the payments.
Did you find this page helpful?
Written by Fact checked
This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.
The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.
