COVID-19 Government Stimulus Benefits for Businesses & Individuals

Covid 19 (2)

During these unprecedented times, we want to keep you informed with the latest news and updates.

With the announcement of the Federal Government’s extraordinary $130 billion stimulus package (JobKeeper Payment) on March 30, it now brings the total amount of stimulus to $320 billion – representing 16.4 per cent of annual GDP.

Please see below the summary of the Federal Government COVID-19 Stimulus benefits for businesses and individuals.

To download a PDF version click here.

COVID-19 Government Stimulus Benefits
From Stimulus Eligibility Trigger for Support
Business
30 March for  up to six  months $1,500 JobKeeper payment. A $1,500 (before tax) per fortnight per employee wage subsidy paid  through employers to the  employee and administered by  the ATO.

● Employer ‐ > 30%  downturn (>50% for  businesses with turnover of $1bn or  more)

● Employee –  employed as at 1  March (other  conditions apply)

● Self‐employed  individuals can also access this

● Employer applies to ATO
From 28 April 2020 Tax‐free cash flow support between $20,000 and $100,000 (paid in two rounds of up to $50,000) for businesses with an annual aggregated turnover < $50 million and make certain payments to staff by 30 June 2020. ● Annual aggregated turnover < $50m Pay staff between 1 January 2020 and 30 June 2020 (includes not‐for‐profit businesses)

● Business must have been established by 12 March 2020

● Automatic on lodgement of March Activity Statement and later Activity Statements
12 March 2020 – 30 June 2020 Instant asset write‐off increased to $150,000 and extended to businesses with an annual turnover < $500 million ● Annual turnover < $500m

● Assets used or installed ready for use between 12 March and 30 June 2020

● 2019‐20 tax return lodgment
12 March 2020 – 30 June 2021 Accelerated depreciation deductions ‐ ability to deduct 50% of the cost of the asset plus normal depreciation deductions on the remaining cost amount in the year of purchase. ● Annual turnover < $500m

● New assets acquired from 12 March and used or installed ready for use by 30 June 2021

● 2019‐20 and 2020‐21 tax return lodgment
1 Jan 2020 – 30 Sept 2020 Wage subsidy of 50% of an Apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Accessible to businesses with less than 20 employees. Employers receive up to $21,000 per apprentice ($7,000 per quarter). ● Businesses with < 20 Employees

● Employee must have been paid by business from 1 March 2020

● Applications from 2 April through Australian Apprenticeship Support Network providers
25 March – 24 September 2020 Solvency safety net –temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000, and an increase in the time companies have to respond from 21 days to 6 months. ● Companies and directors

● Debts incurred in the ordinary course of running the business

25 March – 24 September 2020 Safe harbour from director’s duty to prevent trading while insolvent – a safe harbour for directors temporarily trading while insolvent as a result of the pandemic. ● Company directors

● Debts incurred in the ordinary course of running the business

Ability to reduce PAYG instalments amounts to zero for March.

● Can claim a refund of PAYG for September 2019 and December 2019.

● Financial distress ● Contact the ATO
Up to 6 month deferral for payment of activity statements, income tax, FBT, excise duty. ● Financial distress ● Contact the ATO
● Ability to move from quarterly to monthly reporting for those who need access to GST credits quickly. ● Quarterly GST reporters ● Contact the ATO
Bank support for landlords who do not evict their commercial tenants. ● Landlords of commercial property with loans <$10m ● Contact bank
Individuals
25 March – 24 September 2020 Expanded access, reduced asset testing, and waiting times for social services payments Access to social services payments has been expanded to sole traders and contractors, and those who have been stood down. Waiting times to access support has also been reduced. Asset testing has also been suspended. Income tests still apply.

 

● Sole traders, the self‐employed, casuals or contractors whose income has reduced

● Permanent employees stood down (and not receiving any payments from employers or insurers)

● Carers of people affected by Coronavirus

● Subject to income testing

● Unemployed, stood down or reduced income
27 April 2020 for 6 months $550 Coronavirus supplement ‐ paid fortnightly to certain social services recipients for 6 months ● Individuals receiving eligible social services payments ● Automatic
12 March 2020– 13 April 2020,

and 25 March – 24 Sept 2020

Tax‐free $750 income support payments paid in March/ April and again in June to certain social services recipients ●  Individuals receiving certain social services payments ● Automatic
25 March – 24 September 2020 Bankruptcy safe harbour. Amount of debt required by a creditor to initiate bankruptcy proceedings increased to $20,000, and time to respond to bankruptcy notice increased to 6 months. ●  Proceedings initiated between 25 March and 24 September 2020
1 May 2020 Deeming rates reduced – from 1 May, deeming rates reduced to a lower rate of 0.25% and upper rate of 2.25%.
Superannuation
25 March – 24 September 2020 Early release of up to $10,000 in 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. Withdrawals are tax‐free and will not affect Centrelink or Veterans’ Affairs payments. ● Unemployed

● Eligible certain social service payments

● Redundancy, working hours reduced >20% , or for sole traders, reduction in turnover by >20%

● Applications through myGov from mid‐April 2020
2019‐20 and 2020‐21 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. ● All account‐based and similar pensions
1 May 2020 SMSFs with commercial property able to provide rent relief to tenants ●  Trustee assessment ● Pandemic related financial distress of tenant

COVID-19 Government Stimulus Benefits 2020

Disclaimer: This email is intended to provide a general summary only and should not be relied on as a substitute for professional advice.

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