Victorians to be taxed on new federal coronavirus support payments

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Victorians must have lost all their work to be eligible for the federal government’s new COVID-19 disaster payments, meaning those who picked up a second job or took reduced hours during the lockdown will miss out.

Applications for the new payments open on Tuesday but when they start to arrive recipients will be taxed on the payments, which provide up to $500 a week to people affected by the lockdown.

Melbourne is in its second week of lockdown. Credit:Eddie Jim

The federal government has rapidly worked out the details of the scheme, which it first announced last Thursday, in time to help people shunted out of work by the ongoing Melbourne lockdown. Those who have lost up to 20 hours a week will get $325 while those who have lost more will get $500 if they meet a series of rules.

Emergency Management Australia, a part of the Department of Home Affairs that is responsible for the scheme’s rules, clarified that several components of the scheme would be applied in a relaxed way.

For example, anyone with more than $10,000 in “liquid assets” is forbidden from accessing the coronavirus payment, according to a government website. That term applies to other welfare payments and usually includes things such as term deposits, shares and in some circumstances, assets given by a parent to their children.

A Home Affairs spokesman said the broader test would not be used for the coronavirus support because it is designed as a temporary aid. Instead, liquid assets would just mean “readily available funds in cash or savings”.

Melbourne is the first city to have access to the payments, which kick in after seven days of state-ordered lockdown in a federally-defined coronavirus hotspot. They will also be given to people in any area in the country that fits the definition during the pandemic.

Labor’s government services spokesman Bill Shorten said the payments had been thrown together at the last minute with unclear rules that would discourage people from accessing them.

“Workers from gym instructors to cleaners and delivery drivers will find themselves falling in the cracks,” said Mr Shorten.

Asked whether people on reduced hours or forced to only work one of multiple previous jobs would get the payments, the Home Affairs spokesman said: anyone “receiving an income from paid employment… won’t be eligible”. The government has previously threatened those who get payments improperly with “compliance activity”.

The spokesman also said a rule that requires applicants to have used up “all paid leave entitlements except annual leave” before getting the payment only referred to “any special pandemic leave entitlements”. Some employers created those for staff, such as casuals, who had to stay home from work because of a lockdown.

It suggests workers do not have to use up other forms of leave, such as sick leave, before accessing the payments, which would have posed a problem because being in lockdown does not necessarily entitle someone to take sick leave.

University of Sydney law professor Shae McCrystal said that was because people in lockdown are not necessarily unwell or caring for others.

“Personal leave [also known as sick leave] is contingent leave, it’s contingent on you meeting the conditions, like you’ve got a medical certificate or you’ve got caring responsibilities,” Professor McCrystal said. “In the absence of meeting the criteria, you don’t qualify.”

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