Following our post covering stimulus measures issued by the government on 12 March, Prime Minister Scott Morrison announced on 22 March further incentives and support for business and households facing difficulties due to the spread of coronavirus.
We summarise the key new measures as follows:
FEDERAL GOVERNMENT STIMULUS PACKAGE – 22 MARCH 2020
1️⃣ Cashflow Boost for Employers
100% credit equivalent to the PAYG withholding on activity statements for businesses required to withhold tax for staff. The credits are tax-free for eligible business and not-for-profit employers with a turnover of less than $50-million.
Two steps have been introduced for the cashflow boost:
Initial cashflow boost – minimum $10,000, even if your withholding is zero or less than $10,000, up to a maximum of $50,000 within the initial period (March, April, May and June 2020 activity statements). If you report monthly, March will be 3 times the rate to align with quarterly payers.
Additional cashflow boost – based on value of the initial cashflow boosts received, paid to you upon lodgement of BAS for periods between June to September 2020.
The new measure increased the minimum from $2000 to $20,000 and the maximum from $25,000 to $100,000 in the previously announced cashflow supports for employers.
2️⃣ Sole traders and self-employed eligible for Jobseeker payment
Eligibility criteria to access income support relaxed for the self-employed and sole traders. Lodgement through online services at myGov will be prioritised as the preferred method of application.
3️⃣ Supplements increased
Access to supplements extended and eased for 6 months from 27 April 2020. A temporary coronavirus supplement of $550 will be paid to existing income support recipients (people will receive their normal payment plus $550 each fortnight for 6 months).
A second one-off stimulus payment of $750 will be paid automatically from 13 June 2020 to certain income support recipients (in addition to the payment made from 31 March 2020).
Eligibility for access to income support eased to include sole traders and the self-employed, and to those caring for someone infected or in isolation.
Waiting periods and assets tests are also temporarily waived.
4️⃣ Early release of superannuation
Individuals in financial distress able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax-free and will not affect Centrelink or Veterans’ Affairs payments. This measure allows individuals limited access to superannuation before reaching retirement age to assist with paying living expenses, or can be saved for later use
5️⃣ Temporary reduction in minimum superannuation draw down rates
Superannuation minimum drawdown requirements for account based pensions and similar products reduced by 50% in 2019-20 and 2020-21. This measure will assist current self-funded and managed fund pension recipients by reducing the need to sell-off superannuation investments impacted negatively due to the coronavirus.
6️⃣ Australian Taxation Office (ATO)
At this time the ATO will consider tax debt payment plans and lodgement time extensions for lodgement of income tax returns and IAS/BAS. Deferral payments are applied up to 12 September 2020 for income tax, excise payments and FBT. General interest charges and penalties relief is also available.
7️⃣ Instant Asset Write off and Accelerated Depreciation for Business
From 12 March 2020 to 30 June 2020 the instant write off for plant and equipment increases from $30,000 to $150,000 (ex GST) for businesses with turnover to $500 million. It includes new and second hand assets.
Accelerated deprecation applies on larger new assets and extends to 30 June 2021. This does not apply to second hand assets or building write-off.
8️⃣ Apprentices and Trainees for Business
A subsidy of 50% of employee’s wages to a maximum of $21,000 for the period 1 January 2020 to 30 September 2020. Employer must employ less than 20 staff and the employee must be employed as at 1 March 2020. Employees changing employment after this date carry the benefit to a new employer who meets the employment threshold.
9️⃣ Access to working capital
Introduction of a Coronavirus Small-Medium-Enterprise guarantee scheme protecting financial institutions by guaranteeing 50% of new loans to SMEs up to $250,000. Eligible for businesses with turnover below $50-million.
If you, or someone you know, has been affected by the recent events of coronavirus and require assistance with the above points, please feel free to contact us.