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Economic Response to the COVID-19 Summary (12 March 2020 and 22 March 2020)


Benefit eligible for Economic Stimulus Program

 

1.     Support for Businesses

 

Aim

Eligibility

Measure

Timing

How to Access It

Boosting cash flow for employers

Small & Medium Businesses with turnover less than $50 million in the prior financial year.

 

Not For Profits including charities with turnover less than $50 million in the prior financial year.

 

Must employ workers.

 

Employers will receive a payment equal to 100% (up from 50%) of the PAYG withholding, with the maximum payment being increased from $25,000 to $50,000.

 

The minimum payment is being increased from $2,000 to $20,000, even if they are not required to withhold tax – if you are registered and paying wages, you will get this benefit. Payments will be structured over the March, June and Sept 2020 quarters.

 

Payments will only be available for active eligible employers established prior to 12 March 2020. This rule does not apply to charities which can register at any time and be eligible.

 

This measure is to be applied for a limited number of activity statement lodgements between 1 January 2020 to 30 June 2020. The ATO will credit businesses upon lodgement of the activity statement. Where this places the business in a refund position, the refund will be paid within 14 days.

 

The minimum payment of $10,000 will be applied to the business' first lodgement.

 

Eligibility for additional payment

 

To qualify for the additional payment, the entity must continue to be active.

 

· Monthly Activity Statement Lodgers: Additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to a quarter (25%) of their total initial Boosting Cash Flow for Employers payment following the lodgement of June 2020, July 2020, August 2020 and September 2020 activity statements (up to a total of $50,000).

· Quarterly Activity Statement Lodgers: Additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to half of their total initial Boosting Cash Flow for Employers payment following the lodgement of June 2020 and September 2020 activity statements (up to a total of $50,000).

Covers amounts withheld between 1 January 2020 to 30 September 2020.

 

 

Type of lodger

Eligible period

Lodgement due date

Quarterly*

Q3 (Jan, Feb and Mar 2020)

Q4 (Apr, May and Jun 2020)

28 April 2020

28 July 2020

Monthly**

Mar 2020

Apr 2020

May 2020

Jun 2020

21 April 2020

21 May 2020

22 June 2020

21 July 2020

*Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.

**Monthly lodgers will be eligible to receive the payment for the March to June 2020 lodgements. To provide a similar treatment to the quarterly lodgers, the payment for the monthly lodgers will be calculated at 300% in the March 2020 activity statement (For example say the March 2020 withheld amount is $5,000, on lodgement a payment of $15,000 will be made equal to 300% of the withholding)

 

 

 

The additional payment will be applied to a limited number of activity statements.

 

Type of lodger

Eligible period

Lodgement due date

Quarterly*

Q4 (Apr, May and Jun 2020)

Q1 (Jul, Aug and Sept 2020)

28 July 2020

28 October 2020

Monthly**

Jun 2020

Jul 2020

Aug 2020

Sep 2020

21 July 2020

21 August 2020

21 September 2020

21 October 2020

* Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020. Each additional payment will be equal to half of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

** Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 lodgements. Each additional payment will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

Lodgement of IAS/BAS with the ATO

Increasing the instant asset write-off

Small, Medium & Large Businesses with aggregated annual turnover of less than $500 million

Increase of the instant asset write off threshold from $30,000 to $150,000 until 30 June 2020. Threshold applies on per asset basis and is available for new and/or second hand assets first used or installed ready to use in this timeframe.

 

The above two measures start 12 March 2020.

 

Immediately until 30 June 2020.

Self Assessed

Backing business investment

Small, Medium & Large Businesses with aggregated annual turnover of less than $500 million

Businesses are able to deduct 50% of the cost of an eligible asset on installation, with the balance being subject to existing depreciation rules.

 

This incentive only applies to new assets such as plants and equipment – second hand assets are not eligible, nor are structural improvements which are subject to capital works depreciation. The assets must be first used or installed by 30 June 2021. (No change from 12 March 2020).

Now to 30 June 2021.

Self Assessed

Temporary relief for financially distressed businesses

All businesses

Temporarily increasing the threshold (from $2,000 to $20,000) at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive;

 

The package also includes temporary relief for directors from any personal liability for trading while insolvent; and;

 

Providing temporary flexibility in the Corporations Act 2001 to provide temporary and targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.

 

Note: Debt will still be payable unless forgiven by creditor.

Applies for six months.

Self Assessed

Supporting apprentices and trainees

Small businesses with less than 20 full time employees.

 

Must have apprentices and/or trainees.

 

Apprentices or trainees must have been employed as at 1 March 2020.

Eligible employers can apply for a wage subsidy of 50% of the apprentice's or trainee's wage for up to 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. (No change from 12 March 2020).

 

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

 

 

Employers can register for the subsidy from early April 2020 and final claimed for payment must be lodged by 31 December 2020.

Liaise with Australian Apprenticeship Support Network (AASN) provider.

 

 

 

2.     Support for immediate cash flow needs for SMEs

 

 

Aim

Eligibility

Measure

Timing

How to Access It

Support for immediate cashflow needs for SMEs

Small & Medium Businesses with turnover less than $50 million in the prior financial year.

 

 

Government will provide a guarantee of 50% to lenders to support new short-term unsecured loans of up to $250,000 per borrower.

 

The loans will be up to three years, with an initial six month repayment holiday.

 

The loans will be in form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan

Early April and be available to new loans made by participating lenders until 30 September 2020.

Banks & Mortgage Breakers

Quick and efficient access to credit for small business

Small & Medium Businesses with turnover less than $50 million in the prior financial year.

 

Providing an exemption from responsible lending obligation for lenders providing credit to existing small business customers. This exemption is for six months, and applies to any credit for business purposes, including new credit, credit limit increases and credit variations and restructures.

 

This allows small businesses to access credit quickly and efficiently without having to go through red tape.

Early April and be available to new loans made by participating lenders until 30 September 2020.

Banks & Mortgage Breakers

 

 

 

3.     Supporting Individuals and Households

 

 

Aim

Eligibility

Measure

Timing

How to Access It

Income support for individuals

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

 

Establishing a new time-limited supplement to be paid at a rate of $550 per fortnight.

 

Note: Sole Traders, self-employed, casual workers, and contract workers will be able to access the Jobseeker payment and hence get the supplement.

 

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.

 

One week Ordinary Waiting Time also waived.

 

Cannot receive this payment if you are accessing employer entitlements such as annual leave and/or sick leave, or income protection insurance.

Early April 2020

Services Australia – online platform available as well.

Payments to support households

See attached for eligibility

Two separate $750 payments tosocial security, veteran and other income support recipients and eligible concession card holders

 

First Payment on 31 March 2020

 

Second Payment on 13 July 2020

Service Australia or Department of Veterans' Affairs – banked directly to nominated bank account.

Temporary early release to superannuation

Currently Unemployed

 

Eligible for job seeker, youth allowance, parenting payments, special benefit and farm household allowances

 

On or after 1 January 2020;

- You were made redundant

- Working hours reduced by 20%

- If you are a sole trade – business suspended or turnover reduced by 20%

 

Individuals affected to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.

 

Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans' Affairs payments.

 

 

Mid-April 2020

Apply to ATO via myGov to certify that you meet criteria.

 

Post issuance of determination, your superfund will make the payment to you.

Temporarily reducing superannuation minimum drawdown rate (support for retirees)

Individuals drawing pensions

Temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50%.

Reduction applies for the 2019-20 and 2020-21 income years.

Liaise with your superannuation provider.

Reducing social security deeming rates

Age pensioners

On March 12 March, the Government announced 0.5% point reduction in both the upper and lower social security deeming rates. The rate will be reduced by another 0.25%.

 

This means more people will be able to get greater age pensions.

As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent.

Services Australia

 

 

 

Other Support measures of Businesses affected by COVID-19

 

1.     Australian Taxation Office (ATO)

 

The ATO has implemented a series of administrative measures to assist Australians experiencing financial difficulty as a result of the COVID-19 outbreak. You will need to advise the ATO if you wish to implement any of the below.

 

Options available to assist businesses impacted by COVID-19 include:

 

 

Type of Support

Details

Deferral of payments

Deferring by up to six months the payment date of amounts due through Business Activity Statements (including PAYG Instalments), Income Tax Assessments, Fringe Benefits Tax Assessment and Excise payments.

 

Monthly GST Credits

Businesses on a quarterly reporting cycle to change to monthly to get quicker access to GST refunds.

 

Variation of PAYG Instalments

Allowing business to vary PAYGI (to zero if required) for the March 2020 quarter and claim credits for the September 2019 and December 2019 quarters.

 

Remission of GIC and penalties

Remission of any interest and penalties incurred on or after 23 January 2020

 

Low interest payment plans

Ability to enter into low interest payment plans.

 

 

2.     Australian Banks

 

Australian banks are supporting customers in financial need due to the COVID-19 outbreak by providing payment waivers for 6 months etc.

 

Check your business and personal eligibility for assistance by contacting your respective bank manager.

 

3.     Revenue NSW

 

-       The NSW Govt. has announced that it will defer the payroll tax payments for the rest of 2019-20 for  businesses with payrolls less than $10 million.

 

-       For businesses with payrolls of up to $10 million, 25% of the annual payroll tax liabilities will be waived as part of the 2019/20 annual reconciliations.

 

-       Payroll tax threshold limit to be increased from the current $850,000 to $1,000,000 in 2020-21.

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