Banks offering relief on repayments, low-interest loans and ATO easing up on tax requirements.
Australians expecting to do it tough during the coronavirus pandemic are receiving a helping hand from banks and the Australian Tax Office, which are both providing assistance measures and support in the wake of a crisis.
“[It’s a] unique situation for the global and local economy”, said Bendigo and Adelaide Bank’s managing director, Marnie Baker.
“Health, safety and wellbeing will always be of paramount importance,” she said.
“While the full-reaching human and economic impacts of COVID-19 are still largely unknown and evolving, we are working with the industry and government to manage the impact on our customers, staff, communities and partners.”
The bank is taking seriously its “responsibility and commitment to support those affected through the good times and the rougher times”, by giving customers access to financial assistance packages.
These include home loan and business loan relief for up to three months, and fees waivered for restructured or consolidated loans.
Credit card customers can also apply for an emergency credit card limit increase, interest rate reductions for early withdrawals on term deposits will be waived and discounted interest rates will be offered on new personal loans taken out by existing Bendigo Bank customers, reports Nest Egg.
The Big Four banks have long profited from the patronage of Australians, and with last year’s royal commission exposing many for malpractice, the chance to offer support for affected customers – including home loan repayment relief, deferral of loan repayments, waiving of fees and charges, interest-free periods or no interest rate increases, and debt consolidation – could restore some trust and faith in financial institutions.
Chair of the Australian Banking Association and Commonwealth Bank CEO Matt Comyn noted that “Australia has a very strong financial system with banks that are well capitalised and have strong balance sheets”.
“Banks have supported the country through difficult times in the past and continue to do so. We are very much open for business,” he said.
Australian Banking Association (ABA) chief Anna Bligh chimed in, saying that banks “stand ready to support customers, and if anyone is in need of assistance they shouldn’t wait but come forward as soon as possible”.
Westpac outlined that its hardship assistance program will be made available to affected customers, which includes the deferring of repayments for up to three months.
“COVID-19 is impacting our customers and we are committed to supporting them during this time,” Westpac general manager, home loans, Will Ranken, told Mortgage Business, adding that the bank is encouraging “any customer with concerns about their loans and repayments to talk to us, so we can provide support”.
“Westpac has a dedicated hardship assistance program to help customers experiencing financial stress, including deferring repayments,” he said.
The banks aren’t alone in coming to the aid of struggling Australians. The Australian Tax Office (ATO) has also said it will provide tax relief to any businesses affected by the pandemic.
Commissioner of taxation Chris Jordan said the ATO will offer tax payment deferrals of up to four months, faster goods and services tax refunds, by allowing businesses on a quarterly reporting cycle to switch to monthly GST reporting, and permission to vary PAYG amounts to zero for the April 2020 quarter, so they can claim refunds for instalments made in the previous two quarters.
The ATO may also remit any interest and penalties incurred since 23 January, which have been applied to tax liabilities, and will allow businesses to enter into low-interest payment plans for existing and ongoing tax liabilities, reports Smart Company.
However, employers will still need to meet their employees’ super guarantee obligations for during this time, and the coronavirus support measures will not be automatically rolled out as they were for bushfire-affected businesses.
“We know that many businesses and communities are being heavily affected by the challenging economic conditions created by the outbreak of COVID-19,” Mr Jordan said in a statement.
“The ATO will work shoulder-to-shoulder with businesses to assist them through this difficult period and do what we can to ease the pressure.”
Do you think you will need the help of your bank?
If you enjoy our content, don’t keep it to yourself. Share our free eNews with your friends and encourage them to sign up.