The Government has announced a series of stimulus packages to help the economy survive the impact of the Coronavirus COVID-19. This article summarizes the key benefits available and will be updated regularly as the Government releases more details. Our office will remain open throughout this pandemic to assist you in these troubling times.
1. JobKeeper Payments
The Government announced on 30 March 2020 the JobKeeper payment, which is a fortnightly payment of $1,500 for eligible employers to help them pay employees during the Coronavirus pandemic. Eligible employers will start receiving payments from the first week of May 2020, however these payments will be backdated and cover wages from 30 March 2020. The payments will continue for six months and will be paid by the ATO monthly in arrears. Self-employed people will also be eligible for this assistance.
Eligibility
To be eligible for the JobKeeper payments, the following criteria must be met:
The turnover of the business or not-for-profit has fallen by 30% relative to a comparable period a year ago (50% for businesses with turnover over $1 billion). For example, if your sales were $100,000 in March 2019 and $70,000 in March 2020 you would be eligible.
The business is not subject to the bank levy.
The employee must have been an active employee on 1 March 2020. This should be evidenced through Single Touch Payroll and BAS lodgements (with the exception of sole traders).
Employees must be at least 16 years of age and cannot be receiving the JobKeeper payment from any other employer.
How to Claim
The first step in the registration process is to register your interest on the ATO website, using the following link.
Once the legislation has passed, an application form will be sent to your business. Please do not hesitate to contact us if you require help completing this application.
Click here for more information about this payment
2. Cash Flow Boost for Employers
Small and medium businesses and not for profit organizations with a turnover of less than $50 million that employ staff will be eligible for up to $100,000 back from the ATO when they lodge their March 2020 to June 2020 BAS. The ATO will pay up to $100,000 in two $50,000 stages, with a minimum total payment of $20,000 ($10,000 per stage). Only active eligible employers with an ABN at 12 March 2020 will receive these payments. It is important to have all tax and BAS lodgements up to date to ensure you receive the benefits.
Quarterly
Stage 1 Payment - If you lodge your BAS quarterly you will receive a credit on your ATO account equal to 100% of the amount of PAYG withheld on your March 2020 and June 2020 BAS up to a maximum of $50,000 with a minimum of $10,000.
Stage 2 Payment - You will also receive a credit on your ATO account equal to 50% of the Stage 1 Payment credit after lodging your June 2020 BAS and another 50% after lodging your September 2020 BASs.
Monthly
Stage 1 Payment - If you lodge your BAS monthly you will receive a credit on your ATO account equal to three times (300%) of the amount of PAYG withheld on your March 2020 BAS and a credit of 100% of the April 2020, May 2020 and June 2020 BAS up to a maximum of $50,000 with a minimum of $10,000.
Stage 2 Payment - You will also receive a credit on your ATO account equal to 25% of the Stage 1 Payment after lodging your June 2020, July 2020, August 2020 and September 2020 BAS.
Click here for more information about this concession.
3. $10,000 NSW Small Business Grant
On 3 April 2020, the NSW Premier Gladys Berejiklian announced a grant of up to $10,000 for small businesses. To be eligible, your business will need to:
Have between 1-19 employees
Have a turnover of more than $75,000
Have an annual payroll below $900,000
Have an Australian Business Number as at 1 March 2020
Be based in NSW
Employ staff as at 1 March 2020
Be highly impacted by the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 issued on 30 March 2020. Businesses such as cafes, restaurants, corner shops, gyms, accommodation, massage, beauty, etc would likely be eligible for the grant
Use the funding for unavoidable business costs such as utilities, overheads, legal costs and financial advice
Provide appropriate documentation upon application
The application form to obtain this grant will be available through Service NSW within a fortnight and you have until 1 June 2020 to apply.
Click here for more information about this concession.
4. $250,000 Government Loan Supplement
The Government is encouraging banks to continue to lend to small business by guaranteeing up to 50% of the value of loans issued to small businesses, up to a maximum of $250,000.
These loans are short term (3 years only) with an initial six month repayment holiday. The loans are unsecured which means that you do not have to provide an asset as security. The loans have to be used for working capital for your business.
The Government is encouraging the lenders to provide a facility that only has to be drawn down if needed. This will mean that it will only incur interest once you start to draw down on the loan.
You will need to contact your business bank relationship manager for more details on what each bank has to offer. We have relationships with several banks and finance brokers if you require assistance getting an application started.
5. Coronavirus Supplement
A new Coronavirus supplement at the rate of $550 per fortnight will be paid to eligible individuals, commencing on 27 April 2020. This includes both existing and new recipients of JobSeeker Payment, Youth Allowance, Parenting Payment, Austudy and Abstudy for Students, Farm Household Allowance and Special Benefit.
The Government is also temporarily expanding who can access these income support payments. A new category of JobSeeker Payment and Youth Allowance will be available for individuals who are financially impacted, including sole traders, self-employed, casual workers, permanent employees who are stood down and contract workers who meet the existing income tests. Asset testing will also be temporarily waived during this period.
The application process is being streamlined with online applications being encouraged and certain existing requirements being removed. You can claim online from myGov.
6. Tax Free Payments to Welfare Recipients
Payment 1 - People who are receiving Centrelink income or have an eligible concession card will receive a $750 payment after 31 March 2020. To be eligible, you must have been receiving payments or hold a concession card between 12 March 2020 and 13 April 2020.
Payment 2 - There will be another payment of $750 after 13 July 2020 for people receiving Centrelink income or holding an eligible concession card on 10 July 2020.
Click here for more information about this concession.
7. Early Access to Super
Some individuals may be able to withdraw up to $10,000 of superannuation on compassionate grounds, if you meet at least one of the following requirements:
You are unemployed; or
You are eligible to receive the JobSeeker Payment, Youth Allowance, Parenting Payment, Special Benefit or Farm Household Allowance; or
You were made redundant on or after 1 January 2020; or
Your working hours were reduced by at least 20% on or after 1 January 2020;
If you are a sole trader, your business was suspended or there was a reduction in turnover of at least 20%.
If you are eligible, you will be able to withdraw up to $10,000 before 1 July 2020. You need to apply directly to the ATO through myGov and applications will be open from mid-April 2020.
A second withdrawal of $10,000 from your superannuation will be available from 1 July 2020 as long as it is made within six months of the first payment.
Note that these withdrawals are tax free and will not affect Centrelink or Veteran’s Affairs payments.
8. Payroll Tax Waiver
NSW businesses with payrolls of up to $10 million will not have to pay payroll tax for the months of March 2020, April 2020 and May 2020 if they lodge monthly. The full wages for the year will still need to be reported in the annual reconciliation, however they will receive a 25% discount on the tax. Annual lodgers will also receive a 25% discount on their annual reconciliation.
Click here for more information.
QLD employers with payrolls up to $6.5 million will benefit from a two month refund of payroll tax and a three month holiday.
Click here for more information.
The WA payroll tax threshold will be increased to $1 million on 1 July 2020. Employers who pay $7.5 million or less in wages and have been impacted by Covid-19 can apply to defer their monthly payroll tax payments until 21 July 2020. A one-off grant of $17,500 will be available for employers whose annual Australian wages are between $1-4 million.
Click here for more information.
VIC payroll tax is waived for businesses with annual wages up to $3 million for the 2020 financial year. Returns must still be lodged but no further payments need to be made this financial year. The State Revenue Office will contact businesses if they are eligible for a refund of any payments already made. The first quarter of payroll tax for the 2021 financial year can also be deferred.
Click here for more information.
9. Apprentice & Trainee Support
Businesses with less than 20 full time employees who employ an apprentice or trainee may be eligible to a wage subsidy of 50% of their wages from 1 January 2020 to 30 September 2020. Registrations commence from early April 2020.
Click here for more information about this concession.
10. Instant Asset Write Off
From 12 March 2020, the instant asset write off has been increased from $30,000 to $150,000 for businesses with a turnover of less than $500 million. Businesses will now be able to claim a tax deduction for the purchase of large assets such as motor vehicles and machinery (new or used assets both qualify). This concession ends on 30 June 2020.
Click here for more information about this concession.
11. Accelerated Depreciation
Businesses with a turnover of less than $500 million will be able to claim a 50% tax deduction on asset purchases from 12 March 2020 to 30 June 2020. This concession only applies to new assets.
Click here for more information about this concession.
12. Minimum Drawdowns for Pension Payments
The Government is reducing the minimum payment that a superannuation fund is required to pay to a member who is receiving a pension from the fund. This is a temporary reduction of 50% for the 2020 and 2021 financial years and relates to account-based pensions.
This means that you only have to withdraw a smaller amount to achieve tax-free status for your super fund.
Please contact us on 02 4340 2415 if you would like to discuss any of these measures in more detail.