Family Social Security Benefits (COVID)

Karen was a graphic designer before covid-19 and worked in a small marketing company. Her partner, David, was an exclusive trader in the ceramic tile industry. They had two children, aged 6 and 9, who attended primary school.

David mainly works in the field of home maintenance, He uses the subcontractor to provide some help for his work. For the work required by the second person, he usually pays the subcontractor 30 dollars per hour. Before novel coronavirus, this situation usually lasted 32 hours per week(i.e. 4 days) Yes. The offside has his own ABN, and David pays it directly. There is no source tax. He has three subcontractors and calls them according to the work they need to complete and their availability. David has two days left on average a week to complete this work directly.

According to the interim data as of December 31, 2019, David’s income this year is about $90-95000, which is usually 45 hours a week.

Because of covid-19, many of David’s work has dried up. It is not 45 hours a week, but an average of 24 hours(3 days). Compared with one-time work, this work is related to the ongoing contract. ” There are no subcontractors. “Can work”; no more

Karen was a full-time intermediary before the onset of novel coronavirus. The total salary per share is $1.355, which is equivalent to $7.460 per year. In addition, her annuity payment rate is 9.5%. Due to the novel coronavirus, Karen’s company has significantly reduced the number of non senior staff fired on March 25, 2020. Her salary is 4 weeks, including one week’s accumulated leave on April 3, 2020. Although the federal government is paying professional managers’ salaries, Karen’s employer insisted on their decision and fired her. Karen lost her job.

David and Karen have gone to their accountant to discuss what measures they can take because of the deterioration of covid-19 infectious disease.

Solution

David

Due to the reduction of the contract, David’s deductible expenses and income before tax are usually reduced from $3960 every two weeks to $2160 every two weeks.

As a self-employed man, his work has been reduced by more than 30%, so he is eligible to apply to the IRS for payment of JobKeeper. David is eligible to become JobKeeper, so he will get a pre tax income of 1500 dollars every two weeks.

During the period of novel coronavirus, David’s total income per two weeks was $3600($2160+$1500). He is also eligible to postpone paying any income tax to the tax bureau for six months.

Karen

Karen’s income has dropped to zero, so she is eligible to apply for the jobseeker’s subsidy, including the novel coronavirus pneumonia subsidy. She does not need to wait for a period of time, nor does she need to conduct asset or current asset tests.

However, due to the income test, Karen will not be eligible to receive novel coronavirus subsidies with job seekers. David’s income is considered in the income test to determine eligibility. David’s income will include JobKeeper’s salary. Because this is his taxable income. David’s total income exceeds $3068 every two weeks, which exceeds the upper limit of aid.

Family tax preference

As income decreases, families may be entitled to family tax benefits(FTB). However, FTB is calculated on the basis of the whole accounting year and should be estimated in 2019/20 and 2019/21.

Karen’s income will be low in 2019/20, so in order to ensure that she meets the qualification of Part B of FTB, her income will be recognized first. First of all, David’s annual income is expected to be less than 100000 dollars. However, the cut-off amount of FTB for parents of children aged 5 to 18 years is 21973 dollars per income year, and Karen will exceed this amount based on her income in the first nine months of the year.

The eligibility of FTB Part A is based on the total family income in 2019/20 total income years. The limit of no amount payable by a family is $109379 per income year. As of April 1, 2020, the estimated annual family income(David $93000 and Karen $60000) It is much higher than the annual limit of Part A of the FTB. In 2019/20 income years, families will not accept the amount of Part A or Part B of the tax preference.

With regard to the 2010/21 income year, Karen is eligible to apply for family tax incentives. However, it should be pointed out that claims should be carefully considered according to the understanding of considering annual income. Debt can be applied later. David’s income is estimated to be $93000, and the family is the basic rate, basic fee rate That is, you are entitled to a fortnightly fee of $119.56, and you can also use part B of the FTB of $110.60 every fortnightly.

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