Finance Welfare TND breaks down the federal support on offer for Victorians during lockdown

TND breaks down the federal support on offer for Victorians during lockdown

lockdown Victoria
A debate is raging about whether the federal government is offering enough support for Victorians. Photo: TND
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A war of words broke out over the weekend after Victorian politicians slammed the Morrison government for offering no further support during the state’s latest lockdown.

Victorian Acting Premier James Merlino described the lack of federal assistance as “disgraceful” and sought to paint the problem as a direct consequence of the Commonwealth’s bungled vaccine rollout.

But it wasn’t long before Treasurer Josh Frydenberg took to social media to defend his government’s contribution.

Mr Frydenberg argued the Commonwealth had already given more than $45 billion to Victorian families and businesses and said further support was available via three specific programs: The Pandemic Leave Disaster Payment, the Crisis Payment for National Health Emergency, and the loss carry back tax offset.

But what Mr Frydenberg failed to point out is that many Victorians affected by the latest lockdown are ineligible for the schemes he was trumpeting.

Pandemic Leave Disaster Payment

Who is eligible? People unable to work because they are caring for someone with COVID-19 or directed to self-isolate or quarantine.

How much is it? The payment is $1500 per person.

How many people has it supported? The payments supported just 13 Victorians in the week ended May 13, bringing the total number helped since August to 12,345, according to the most recent records.

Who misses out? Victorians who lose work as a result of the lockdown but were not told by authorities to self-isolate. This includes more than 500,000 casual workers in Victoria who don’t get leave pay, according to ABS data.

How much money has been handed out? About $20,000 was paid in the week to May 13 and about $18.5 million has been paid in total under the scheme.

These numbers will spike when claims for the payments covering the lockdown are filed with the COVID-19 committee next week.

In the two weeks covering Victoria’s five-day lockdown in February, just under $1 million was paid to 662 people.

Crisis Payment for National Health Emergency

Who is eligible? People already receiving income support from the federal government who are either told to self-isolate or are caring with someone that has COVID-19.

How much is it? The payment is a week’s worth of income support. A JobSeeker recipient with no kids would receive about $310. One payment is made for each isolation, with a cap of two payments every six months. That’s a maximum of $620 over any six-month period.

Who misses out? Income support recipients who experience financial hardship as a result of the lockdown are ineligible for additional assistance if they were not told to self-isolate.

How many people has it supported? We don’t know because the government releases no public information on how many people have applied for the payment.

The New Daily asked Services Australia for this data on Monday, but the agency did not provide an answer before deadline.

About 1.2 million Victorians were receiving some form of income support from the federal government on May 14 and could therefore qualify for the payment if they met the other eligibility criteria.

How much money has been handed out? The government has not published aggregate costings for the scheme.

Loss carry back tax offset

Who is eligible? Companies that record losses can claim them against tax bills from previous years, clawing back money paid to the ATO.

How much is it? This depends on two things: Business tax liabilities in prior years and losses made in the current year.

Business accountant Lisa Greig of Perigee Advisers said the amount will be fairly small for most businesses, because those that optimised their tax affairs last year will have paid higher directors fees to maximise the benefit of the government’s other business program, the cash flow boost.

“A lot of times companies don’t actually pay tax,” Ms Greig told TND.

“What they do is they move the money into the hands of their mum and dad shareholders.”

How many people has it supported? We won’t know the answer to this until companies file their 2021-22 tax returns, which means any money paid under the program won’t hit the bank accounts of eligible businesses until after the lockdown (unless it’s extended for several months).

Who misses out? Many firms structured as trusts or partnerships are ineligible, according to Tony Greco, a senior tax adviser at the Institute of Public Accountants (IPA) and a Board of Tax adviser.

“A lot of small businesses are ineligible because they’re not corporate entities,” Mr Greco told TND.

An estimated 363,000 Victorian businesses (a majority) aren’t classified as companies, ABS data published for the 2019-20 year shows.