How payments from the Coronavirus Economic Response Package affect people in bankruptcy
Economic support payments - are not claimable by your bankruptcy trustee as income or as an asset, regardless of whether you receive the payments before or after the date of bankruptcy.
COVID-19 supplement payments - are claimable by the trustee if you receive them before the date of bankruptcy and it remains in your bank account when you become bankrupt. During bankruptcy these payments are included in your after-tax income amount. If your after-tax income exceeds a set amount, you may have to make compulsory payments[?]
More information about these types of payment are available at Services Australia.
Early access to superannuation - Should you receive payments from your superannuation under the Coronavirus Economic Response Package, there is no change to the way this payment is treated in bankruptcy. See Is my superannuation affected? for details on what happens to your super during bankruptcy.
The Australian Taxation Office has more information about super payments on their website at Early access to your super.
One of your obligations when bankrupt is to keep your trustee informed of any changes in your income or employment.
For example, if you:
- change jobs
- receive higher or lower income (including government assistance)
- stop working.
There is no limit to the amount of income you can earn while you're bankrupt. There is also no limit to the amount you can save during your bankruptcy.
Estimate income contributions
Use our income contributions calculator to estimate the annual contribution you may need to pay during bankruptcy.
Case study: Simon
Earning income during bankruptcy
Recently, Simon was offered a position at a school. He accepted the job, and now earns $90,000 (after tax) a year.
If your trustee is the Official Trustee[?] (AFSA) update us now.
When you update your income, your trustee may request further information if they believe your income exceeds the set amount. If you trustee is the Official Trustee (AFSA), they may send you a statement of income form to complete.