Coronavirus Economic Stimulus Package
On 22 March the Government announced a second set of economic responses to provide timely support to affected workers, businesses and the broader community.
MEASURES IMPACTING BUSINESSES
Cashflow assistance for employers
PAYG WITHHOLDING ASSISTANCE
Up to $100k over the 2020 & 2021 years for eligible businesses with turnover under $50M
Payments will be automatically credited to the business’ ATO Integrated Client account
2020 Financial Year
100% of PAYG Withholding up to a maximum $50k during the 2020 Financial year
Minimum payment of $10k, even if no PAYG Withholding has been paid
Must be registered for PAYG Withholding as at 12th March 2020 (no backdating)
2021 Financial Year
Same benefit as paid in 2020 year will be split upon lodgement of Jun 2020 to Sep 2020 BASs
SUPPORTING APPRENTICES & TRAINEES
Businesses with less than 20 employees can access a wage subsidy of 50% of apprentice wages from 1 Jan 2020 to 30 Sep 2020 (max of $21k)
This subsidy also applies to all businesses who employ an eligible out-of-trade apprentice or trainee
Registrations available from early April and must be lodged by 31 December 2020
Apprentices must be approved by an Australian Apprenticeship Support Network (AASN) provider
Delivering support for business investment
Instant asset write-off has been increased from $30k to $150k for business with a turnover of less than $500M (until 30 Jun 2020)
This will revert to $1,000 from 1 Jul 2020 for businesses with turnover less than $10M
Assets must be used or ready for use by 30th Jun 2020
Assets not within the threshold can be depreciated at 50% in the first year (through to 30 June 2021) and 30% for every year thereafter
Government guarantee scheme
Government will provide a guarantee of 50% for new unsecured business loans to be used for working capital (for eligible businesses with a turnover less than $50M)
Maximum loan size is $250k
Loans for up to 3 years with an initial 6-month repayment holiday
These loans will be in the form of unsecured finance, i.e. no asset security
Available for new loans made between Apr 2020 and Sep 2020
Loans will be subject to lenders’ credit assessment processes
Banks are also providing aid to customers in the deferral of loan repayment and discounted interest rates.
We strongly encourage you to contact your business banker directly to find out what options are available to you.
Payroll Tax – NSW State Government Payroll Tax Relief
Clients who are registered for payroll tax and have total grouped Australian wages of less than $10M will not have to pay the monthly Mar 2020, Apr 2020 or May 2020 payroll tax
When lodging the annual reconciliation, a 25% credit will be applied to the total payroll tax liability
The payroll tax threshold will increase to $1M from 1 Jul 2020
Other states have also released payroll tax relief measures. Please contact your accountant to discuss if this applies to you.
Temporary relief for financially distressed businesses
A temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive
A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition
Temporary relief for directors from any personal liability for trading while insolvent
Providing temporary flexibility in the Corporations Act 2001 to provide targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.
MEASURES IMPACTING INDIVIDUALS
Early access to superannuation
Early access to up to $10k of your superannuation before 1 Jul 2020, and a further $10k in 2021 financial year.
To apply you must:
Be unemployed; or
Be eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
on or after 1 Jan 2020:
Be made redundant;
Have your working hours reduced by 20 per cent or more;
Be a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more
Income support for individuals
Any individual eligible for the Coronavirus Supplement will receive $550 per fortnight
Support payment categories eligible to receive the Coronavirus supplement are:
Jobseeker Payment (and all payments progressively transitioning to Jobseeker Payment; those currently receiving Partner Allowance, Widow Allowance, Sickness Allowance and Wife Pension)
Youth Allowance Jobseeker
Parenting Payment (Partnered and Single)
Farm Household Allowance
Special Benefit recipients
Expanded access to income support categories listed above, including those who have been stood down, lose employment, sole traders, self-employed, casual workers and contract workers who meet the income tests as a result of the economic downturn due to the Coronavirus. This could also include a person required to care for someone who is affected by the Coronavirus
Reduced means testing: Asset testing for JobSeeker Payment, Youth Allowance Jobseeker and Parenting Payment will be waived for the period of the Coronavirus supplement. Income testing will still apply to the person’s other payments, consistent with current arrangements.
Temporary relaxation to JobSeeker conditions: JobSeekers with partners earning less than $3,068 per fortnight are now eligible for JobSeeker payments and associated Coronavirus Supplements. Income testing will still apply to the person’s other payments, consistent with current arrangements.
Payments to support households
The Government is providing two separate $750 payments.
The first payment is made to the following recipients, and paid automatically from 31st Mar:
Age Pension
Disability Support Pension
Carer Payment
Parenting Payment
Wife Pension
Widow B Pension
ABSTUDY (Living Allowance)
Austudy
Bereavement Allowance
Newstart Allowance
JobSeeker Payment
Youth Allowance
Partner Allowance
Sickness Allowance
Special Benefit
Widow Allowance
Family Tax Benefit, including Double Orphan Pension
Carer Allowance
Pensioner Concession Card (PCC) holders
Commonwealth Seniors Health Card holders
Veteran Gold Card holders
Farm Household Allowance
Veteran Service Pension Veteran Income Support Supplement; Veteran Compensation payments, including lump sum payments; War Widow(er) Pension; and Veteran Payment.
DVA PCC holders; DVA Education Scheme recipients; Disability Pensioners at the temporary special rate; DVA Income support pensioners at $0 rate
Provided you are not receiving the coronavirus supplement mentioned in point 7, you will also be eligible for a second payment of $750 to be paid automatically from 13 Jul 2020.
Providing support for retirees
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for the 2019-20 and 2020-21 income years.
More information
Feel free to contact the office and arrange a phone meeting with our team on (02) 9529 4411.
