Financial Roadmap For Navigating COVID-19

The coronavirus (COVID-19) pandemic sweeping the world is resulting in significant levels of economic disruption and is likely to be the precursor to an Australian recession. This blog will outline some of the things you can do to help get control of your finances in this difficult time.

Aboriginal people have always had a strong connection to family and community. This is needed now more than ever before.

That means looking after the elders who may not be able to leave home due to severe health risks. Yes, this might mean getting to the shops at 7am and lining up for toilet paper, but it’s nothing compared to what our elders have had to go through in the past.

Below is a bit of a road map that we have put together to help navigate what’s happening during this unique time in our history.

Employment – If you haven’t already, have the conversation with your employer about leave entitlements during this time. Major companies have agreed to pay their casual staff members if they are unable to work or a required to self-isolate. Each employer will be different and have various levels of support.

Government stimulus – Along with the federal government, each state is also announcing its own stimulus package. The government has now announced two stimulus packages for the economy.

If you’ve found yourself affected, you may be able to access a “coronavirus supplement” of $550 a fortnight for the next six months.

That’s on top of other benefits — so if you’re already receiving payments through Jobseeker (formerly known as Newstart), you can claim both.

Casual workers who are currently making less than $1,075 a fortnight will be eligible to receive the full supplement.

Mortgages – Major banks have announced that customers effected by COVID-19 may have their mortgage repayments deferred for up to six months. They’ve also reduced the interest rate on most mortgage loans.

The earlier you contact your bank, the better. Discuss your options in terms of suspending your repayments. Most lenders will have a range of options to discuss and will genuinely want to help in this situation.

Rent – If you believe that you will struggle to pay your rent, contact your real estate agent or landlord as soon as possible. If it’s due to unexpected loss of income and not increased living expenses, they too will have hardship provisions.

Ask for a rent reduction for a period of time. A landlord would prefer low rent to no rent during this time.

Government is looking to make laws that prevent landlords from removing tenants due to COVID-19.

Utilities – Utility companies also have hardship provisions and can provide flexible repayment options. Again, the earlier the conversation is started the better.

Insurance – Now is a great time to check your insurance cover. You may have income protection insurance that could pay a percentage of your wages. Check your superannuation statements as you may also have insurance within your super.

Avoid payday lenders – Things may get really tough, but it is advisable to avoid payday lenders. These are the companies that appear to be your friend by giving you money in a time of need when no one else will. However, they have significant establishment fees and a high interest rate if not repaid within a certain period of time. They can make your situation much worse.

Look after friends and family – Check in with family to see how they are going. Sharing resources such as food and cars may be a big help to someone.

They key message here is to make contact with the relevant companies as early as possible to explore your options. Most companies do have hardship provisions so if you feel that you are experiencing hardship, mention it to them.

The process of speaking to them may take longer than normal, as these companies are having their staff work from home which means there will be fewer call centre staff to answer the phone.