COVID-19 Economic Stimulus Update – the essential info for your business and personal needs.
During this period of difficulty for us all, State and Federal Government have released another raft of economic stimulus to help Australians move and trade through this time.
Our office is contacting clients individually in regards to measured that are going to be available to them, but please review this summary and do get in contact if you have any questions or would like to discuss any of these opportunities for assistance:-
- Support for Businesses – FEDERAL Government
· Boosting Cash Flow for Employers via a payment = to 100% of their PAYG Withholding on salary and wages up to a maximum payment of $50,000, with the minimum payment an eligible employer can receive is $10,000.
- Payment will be calculated upon lodgement of the BAS or IAS for the periods from March to June 2020.
- Both quarterly and monthly reporting entities will receive this remittance of the PAYG.
- Additional Boost payment will also be made on the September 2020 BAS = to the total of all Boosting Cash Flowpayments they have received in the initial (March to June) payments.
· This can mean employer receive a minimum of $20,000 to a maximum of $100,000 in cash support for the payment to their employees.
· Increase to the Instant Asset Write-Off
· The Government has increased the Instant Asset Write off to $150,000 for assets installed and ready for us by 30.06.2020.
· Eligible businesses expanded to include those with aggregated annual turnover less than $500,000.000.
· Accelerated Depreciation Deductions
· Businesses with a turnover less than $500,000,000 will be able to deduct 50% of the installed asset through to 30.06.2021, with the balance of the asset to be depreciated under normal depreciation rules for the remaining life of the asset after 30.06.2021.
· Support for Apprentices and trainees
· Small business employers may be eligible to apply for a 50% wage subsidy for 9 months from 01.01.2020 to 30.09.2020.
· Employers will be reimbursed up to a maximum of $21,000 per eligible trainee.
· If a trainee changes employers in that time, the subsidy will be paid to the new employer.
· Payments made Via Group Training Organisations and National Apprentice Employment Network.
· Temporary Relief for Financially Distressed Business
· To assist what are usually financially secure businesses from financial distress caused by the Virus, the Government is increasing the threshold at which creditors can issue Statutory Demands/initiate bankruptcy proceedings, and allowing more time for the companies/individuals to respond to Demands.
· Temporary relief for Directors of personal liability for insolvent trading, and
· and providing temporary flexibility in the Corporations Act 2001 to provide targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.
· Temporary Release of Superannuation
· Individuals effected by Corona Virus will be allowed to access up to $10,000 from their Superannuation in 2019/20 20 and a further $10,000 in 2020/2021.
· Individuals will not be taxed on this money, nor will the receipt affect Centrelink or Veteran Affairs payments.
· Temporary Reduction of Superannuation Minimum drawdown rates.
· There will be a temporary reduction of the minimum drawdown required from an Account-Based Pension by 50% for 2020 and 2021.
· Payment Support to Households
· Government to provide $750 to social security, Veteran and other income support recipients and eligible concession card holders.
· First payment will be made on the 31.03.2020, and the second payment on the 13.07.2020.
· Income Support to Individuals
· For the next 6 months, the Government will expand eligibility to Income Support.
· A time-limited Coronavirus supplement of $550/fortnight to be paid to existing and new recipients of Jobseeker, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit payments.
- Supporting the Flow of Credit
- Quick access to credit to Small Business – Government is reducing the red tape for provision of credit to the existing business customer.
- RBA is reducing the cost of credit – RBA to allow funding to banks at a fixed rate of 0.25% to apply pressure to the banks to reduce rates for borrowers.
- SME Guarantee Scheme – Government to provide a guarantee of 50% to SME Lenders to support short term, unsecured loans to SME’s.
- Australian Taxation Office Administrational Support
These relief measures will not be automatically applied and businesses must contact the ATO to discuss the specific options available to them.
- Deferring by up to 4 months the payment of liabilities due through
- Including BAS, Income Tax, FBT
- Businesses lodging quarterly BAS van vary to monthly reporting in order to receive refunds more regularly
- The change in reporting must remain for 12 months
- Allowing businesses to vary PAYG instalment amounts to NIL for the March 2020 quarter and claim a refund for instalments paid for the September 2019 and December 2019 quarters.
- All variations to instalments must be lodged to ATO on the due date
- Remitting any interest and penalties, incurred after 23 January 2020, which have been applied to tax liabilities; and
- Allowing businesses to enter into low-interest payment plans to assist with existing and ongoing tax liabilities.
Businesses will still be required to meet ongoing superannuation guarantee obligations for employees. As this situation emerges we will provide further commentary.
I look forward to speaking to you all, please do not hesitate to contact me directly to discuss any of the above.
Sian and the Z.Consulting team