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Coronavirus Stimulus Package

The Australian Government has announced stimulus packages to address the economic effects of the COVID-19 (coronavirus).  We hope these measures will help people and businesses in Warringah get through this difficult time. Of particular note, businesses, tradespeople, employees, retirees and social security recipients (including pensioners) will benefit. 

Below, we have outlined the packages and included sample situations to show how the stimulus can help for-profit and not-for-profit organisations. You can click each point below to be taken to the relevant government site for more information:

Supporting apprentices and trainees

Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for 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. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

Support will also be provided to the National Apprentice Employment Network to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.

Income support for sole traders and employees

The eligibility for income support payments has been expanded and a new, time‑limited Coronavirus supplement of $550 per fortnight has been introduced. This supplement will be paid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months and will not be income tested.

The income support payment categories eligible to receive the coronavirus supplement are:

  • Jobseeker Payment (and all payments progressively transitioning to JobSeeker Payment; those currently receiving Partner Allowance, Widow Allowance, Sickness Allowance and Wife Pension)
  • Jobkeeper Payment
  • Youth Allowance Jobseeker
  • Parenting Payment (Partnered and Single)
  • Farm Household Allowance
  • Special Benefit recipients

For the period of the Coronavirus supplement, there will be expanded access to the income support payments listed above for the Jobseeker Payment and Youth Allowance Jobseeker criteria will provide payment access for permanent employees who are stood down or lose their employment.  The expanded eligibility applies to:

  • sole traders
  • the self‑employed
  • casual workers
  • contract workers who meet the income tests as a result of the economic downturn due to the Coronavirus. This could also include a person required to care for someone who is affected by the Coronavirus.

JobKeeper Payment

If your business has been significantly impacted by the Coronavirus you will be able to access a wage subsidy to continue paying your employees. Under the JobKeeper program, you will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of six months. This assistance will help you keep staff and will help you restart when the crisis is over.

If you are an employee, your employer will notify you if they intend to claim the fortnightly payment of $1,500 on your behalf.

Employers must elect to participate in the scheme by applying to the ATO and provide information that demonstrates at least a 30% downturn in business (15% downturn for charities and not-for-profits, but 50% for businesses with a turnover larger than $1 billion).  In addition, employers must report the number of eligible employees employed by the business on a monthly basis.

Eligible employers will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that employer – including full-time, part-time, long-term casuals and stood down employees. Casual employees eligible for the JobKeeper Payment are those employees who have been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020. To be eligible, an employee must be an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder.

If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Payments will be made to the employer monthly in arrears by the ATO.

For fact sheets and practical examples, please click here. For more detailed information, including superannuation payments, please click here.

Early Access to Super

People affected by the coronavirus can access up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21. You will not need to pay tax on the amounts released and the money you withdraw will not affect Centrelink or Veterans’ Affairs payments.

From mid-April 2020, eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months. The exact timing will depend on the passage of the relevant legislation.

To apply for early release, you must satisfy any one or more of the following requirements:

  • You are unemployed
  • You are a sole trader and your business was suspended or there was a reduction in your turnover of 20% or more.
  • You are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance.
  • On or after 1 January 2020, either you were made redundant or your working hours were reduced by 20% or more

If you are eligible for this new round of early release, you can apply directly to the ATO.

After your application has been processed, you will be issued with a determination. A copy of this determination will be provided to your superannuation fund which will advise them to release your superannuation payment. Your fund will then make the payment to you without you needing to apply to them directly. However, to ensure you receive your payment as soon as possible, you should contact your fund to check that they have your correct details, including your current bank account details and proof of identity documents.

Separate arrangements will apply if you are a member of a self-managed superannuation fund (SMSF). Further guidance will be available on the government's website.

Temporarily reducing superannuation minimum drawdown rates

The government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50% for 2019–20 and 2020–21.

The government is also reducing both the upper and lower social security deeming rates by a further 0.25 percentage points in addition to the 0.5 percentage point reduction to both rates announced on 12 March 2020.

Temporary relief for financially distressed businesses

  • There will be a temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive
  • A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition
  • Temporary relief for directors from any personal liability for trading while insolvent
  • Temporary flexibility in the Corporations Act 2001 to provide targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the coronavirus health crisis.

Business incentives

The government is introducing a 15-month investment incentive to support economic growth in the short-term by accelerating depreciation deductions.

A deduction of 50% of the cost of an eligible asset on installation will apply, with existing depreciation rules applying to the balance of the asset’s cost.

Eligible businesses are those with aggregated turnover below $500 million.

Eligible assets are new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (that is, plant, equipment and specified intangible assets, such as patents). This does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

This applies to assets acquired after the announcement and first used or installed by 30 June 2021.

Loans for small and medium-sized businesses

The Coronavirus SME Guarantee Scheme will provide support for businesses. Under the Scheme, the Government will provide a guarantee of 50% to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months.

SMEs with a turnover of up to $50 million will be eligible to receive these loans.

The Government will provide eligible lenders with a guarantee for loans with the following terms:

  • The maximum total size of loans of $250,000 per borrower.
  • The loans will be up to three years, with an initial six month repayment holiday.
  • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

As part of the loan products available, the Government will encourage lenders to provide facilities to SMEs that only have to be drawn if needed by the SME. This will mean that the SME will only incur interest on the amount they drawdown.  If they do not draw down any funds from the facility, no interest will be charged, but they will retain the flexibility to draw down in the future should they need to.

The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

The Government is providing an exemption from responsible lending obligations for lenders providing credit to existing small business customers. This exemption is for 6 months, and applies to any credit for business purposes, including:

  • new credit
  • credit limit increases
  • credit variations and restructures

Instant asset write-off

The threshold for each asset increased to $150,000 until 31 December 2020.

The instant asset write-off was expanded in March to support businesses through coronavirus (COVID-19). From 12 March 2020 until 31 December 2020, the instant asset write-off:

  • threshold for each asset increased to $150,000 (up from $30,000)
  • eligibility has been expanded to cover businesses with an aggregated turnover of less than $500 million (up from $50 million)

Businesses can claim an immediate deduction (business portion only) for multiple assets, new or second hand, provided each asset costs less than $150,000. Assets must be first used or installed ready for use between 12 March 2020 and 31 December 2020 to claim the expanded threshold.

Some exclusions and limits apply, for example, a car limit of $57,581 applies to passenger vehicles (except motor cycles or similar vehicles) designed to carry less than one tonne and fewer than nine passengers.

Small businesses (aggregated turnover of less than $10 million) can also claim a deduction for the balance of their small business pool if it is less than $150,000 at the end of the 2019-20 financial year (before applying the depreciation deductions).

Boosting cash flow for employers - for-profit and not-for-profit organisations

This measure provides a minimum of $20, 000 up to a maximum of $100,000 to small and medium-sized businesses and not-for-profit organisations that employ staff and have an annual turnover under $50 million (based on the prior year).  The payment will be tax-free and is automatically calculated by the Australian Taxation Office (ATO). No new forms are required.  There are two parts to this measure.

The initial payment

This payment will be delivered as a credit in the activity statement system from 28 April 2020 upon the organisation lodging its BAS.

Eligible businesses/NFPs that withhold tax from their employees’ salary and wages will receive a payment equal to 100% of the amount withheld, up to a maximum payment of $50,000.

Eligible businesses/NFPs that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax.

Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments. To provide similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300%) in the March 2020 activity statement.

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

The minimum payment will be applied to the business’ first lodgment.

The additional payment

If your business/NFP continues to be active, you may qualify to receive an additional payment - equal to your initial payment.

For monthly activity statement lodgers, your additional payment will be delivered as an automatic credit in the activity statement system. You will receive a quarter of your total initial payment following the lodgment of your June 2020, July 2020, August 2020 and September 2020 activity statements (up to a total of $50,000). 

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 your total initial payment.

Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

The payments will only be available to active eligible employers established prior to 12 March 2020. However, charities which are registered with the Australian Charities and Not for profits Commission will be eligible regardless of when they were registered, subject to meeting other eligibility requirements. This recognises that new charities may be established in response to the coronavirus pandemic.

Here are some examples to demonstrate how this payment can help your business

Sarah’s Construction Business
Sarah owns a building business and employs eight construction workers, each earning $89,730 per year. In the months of March, April and June for the 2019-20 income year, Sarah reports withholding of $15,008 for her employees on each business activity statement (BAS). Under the Government’s package, Sarah will be eligible to receive the Boost on lodgement of each of her BAS.

Sarah’s business receives:
•       A credit of $45,024 for the March period, equal to 300% of her total withholding.
•       A credit of $4,976 for the April period, before she reaches the $50,000 cap.
•       No payment for the May period, as she has now reached the $50,000 cap.
•       A credit of $12,500 for the June period, equal to 25% of her total Boosting Cash Flow for Employers payments.
•       A credit of $12,500 for the July period, equal to 25% of her total Boosting Cash Flow for Employers payments.
•       A credit of $12,500 for the August period, equal to 25% of her total Boosting Cash Flow for Employers payments.
•       A credit of $12,500 for the September period, equal to 25% of her total Boosting Cash Flow for Employers payments.

Under the Government’s enhanced Boosting Cash Flow for Employers measure, Sarah’s business will receive $100,000.

Sean’s Hairdresser Salon
Sean owns a hairdressing salon and employs 12 hairdressers, each with a salary of $50,000 per year. Sean reports withholding of $8,788 for his employees in each of his monthly BAS. Under the Government’s package, Sean will be eligible to receive payments on lodgement of his relevant BAS.

Sean’s business will receive:
•       A credit of $26,364 for the March period, equal to 300% of his total withholding.
•       A credit of $8,788 for the April period.
•       A credit of $8,788 for the May period.
•       A credit of $6,060 for the June period, before he reaches the $50,000 cap.

Sean will also receive:

  • A credit of $12,500 for the June period, equal to 25% of his total Boosting Cash Flow for Employers payments.
  • A credit of $12,500 for the July period, equal to 25% of his total Boosting Cash Flow for Employers payments.
  • A credit of $12,500 for the August period, equal to 25% of his total Boosting Cash Flow for Employers payments.
  • A credit of $12,500  for the September period, equal to 25% of his total Boosting Cash Flow for Employers payments.

Under the Government’s enhanced Boosting Cash Flow for Employers measure, Sean’s business will receive $100,000.

Tim’s Courier Run
Tim owns a small paper delivery business and employs two casual employees who each earn $10,000 per year. In his quarterly BAS, Tim reports withholding of $0 for his employees as they are under the tax-free threshold.  Under the Government’s changes, Tim will be eligible to receive payment on lodgement of his BAS.

Tim’s business will receive:
•       A credit of $10,000 for the March quarter, as he pays salary and wages but is not required to withhold tax.
•       A credit of $5,000 for the June quarter, equal to 50% of his total Boosting Cash Flow for Employers payments.
•       A credit of $5,000 for the September quarter, equal to 50% of his total Boosting Cash Flow for Employers payments. 

If Tim begins withholding tax for the June quarter, he would need to withhold more than $10,000 before he receives any additional payment.

Under the Government’s enhanced Boosting Cash Flow for Employers measure, Tim’s business will receive $20,000.

Here is an example of what a Not-for-Profit organisation's situation might look like:

Help for the Homeless Op-Shop

Help for the Homeless, a registered charity, runs an op-shop to support its programs and employs five part-time workers with an average income of $30,000 per year. It reports a total withholding of $3,510 for its employees for each quarterly BAS.

Under the Government’s new package, Help for the Homeless will be eligible to receive the payment on lodgement of its BAS as it is a charity. Help for the Homeless receives:

  • A credit of $10,000 for the March quarter, the minimum payment.
  • An additional payment of $5,000 for the June quarter, equal to 50% of its total Boosting Cash Flow for Employers payments.
  • An additional payment of $5,000 for the September quarter, equal to 50% of its total Boosting Cash Flow for Employers payments.

Under the Government’s enhanced Boosting Cash Flow for Employers measure, Help for the Homeless will receive $20,000.

HomeBuilder Grant Scheme

HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home. HomeBuilder will assist the residential construction market by encouraging the commencement of new home builds and renovations.

You need to meet one of the following two income caps:

  • $125,000 per annum for an individual applicant based on your 2018-19 tax return or later
  • $200,000 per annum for a couple based on both 2018-19 tax returns or later

You will need to enter into a building contract between 4 June 2020 and 31 December 2020 to either: build a new home as a principal place of residence, where the property value does not exceed $750,000; or substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property does not exceed $1.5 million.

Construction must commence within three months of the contract date.

Please click HERE for case studies and examples.

Extensions for Government Grant Recipients

We understand the impact that coronavirus (COVID-19) is having and would like to assure our grant recipients that we are taking measures to support you during this difficult time.

The Government Departments are applying discretion where possible, extending application closing dates, grant project milestones and completion dates so that you can focus on your business and the welfare of yourself and your employees, rather than deadlines.

The AusIndustry Outreach Network and the Entrepreneurs’ Programme Advisers are working closely with businesses to provide assistance.

Assistance for affected regions, communities and industries

The Government has set aside an initial $1 billion allocation to support those regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as:

  • tourism
  • agriculture
  • education

The $1 billion will be provided through existing or newly established Government programs.

This will include the waiver of the Environmental Management Charge for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains. Targeted measures will also be developed to further promote domestic tourism.

Child Care Support

The Federal Minister for Education Dan Tehan announced a number of changes to childcare, including:
1.    Families now get an extra 20 days of absences taking the total to 62 days for the year
2.    Waiving the requirement to produce medical evidence for absence if a child is absent due to COVID 19
3.    Families get 62 days absences plus additional absences where a child is ill
4.    Waiving the requirement for services to enforce payment of out of pocket fees by families for child care services  who have been directed to close, on public health advice
5.    Families experiencing a loss of income, such as casual workers or those in self-isolation, may be eligible for the Additional Child Care Subsidy (temporary financial hardship). This subsidy is available for up to 13 weeks and, in most cases, the full cost of child care will be covered.
6.    Grants are also available for child care providers through the Community Child Care Special Circumstances Fund to help cover business costs, including wages, to ensure services impacted by COVID-19 can continue to operate.

On April 2, the Australian Government also announced the new Early Childhood Education and Care Relief Package. From Monday 6 April 2020 weekly payments will be made directly to early childhood education and care services in lieu of the Child Care Subsidy and the Additional Child Care Subsidy, to help them keep their doors open and employees in their jobs.

Payments will be made until the end of the 2019-20 financial year and families will not be charged fees during this time. These payments will complement the JobKeeper Payment announced by the Prime Minister on 30 March 2020.  Early childhood education and child care services do not need to apply for the payments, they will be paid automatically.

In addition, up to and including 5 April 2020, services can now waive gap fees for families due to the impact of COVID-19. This can go back as far as 23 March 2020 and is in addition to changes already announced that allow services to waive gap fees for families where they have been directed to close on public health advice. Please see detailed information here.

 

For more information, please visit:

The official Government website HERE

The Australian Taxation Office website HERE 

The Treasury's response to COVID-19 HERE.

 

The NSW Government will support the State’s economy by providing $1.6 billion in tax cuts and job creation measures. The Government will waive certain taxes and fees to help small businesses. 

Support for businesses 
  • $450 million for the waiver of payroll tax in the final quarter of this financial year (April, May & June) for businesses with payrolls of up to $10 million. These businesses will save a quarter of their annual payroll tax bill in 2019-20.
  • $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21
  • $80 million to waive a range of fees and charges for small businesses such as bars, cafes, restaurants and tradies
  • $250 million to employ additional cleaners for public infrastructures such as transport assets, schools and other public buildings
  • More than $250 million to bring forward maintenance on public assets including social housing and crown land fencing
  • $500 million to bring forward capital works and maintenance.
For more information, please click here.
Support for our health system
  • $700 million in extra funding for NSW Health. This will assist in doubling ICU capacity, preparing for additional COVID-19 testing, purchasing additional ventilators and medical equipment, establishing acute respiratory clinics and bringing forward elective surgeries to private hospitals.

For more information, please click here.

 

On top of the initial package, the NSW Government released the second round of stimulus. Please click here for the details.

Support for Business

• The creation of a $1 billion Working for NSW fund to sustain business, create new jobs and retrain employees. The fund is already being put into action with 1000 new staff for Service NSW announced this week to be funded by the program. The Working for NSW fund will comprise $750 million in new funding and $250 million announced last week for additional cleaning services

• Deferral of payroll tax for business with payrolls over $10 million for six months (up to $4 billion deferred). Businesses with payrolls of $10 million or less received a three-month waiver on payroll tax in the first package. These businesses will now get an additional three-month deferral as well

• Deferral of gaming tax for clubs, pubs and hotels, and lotteries tax for six months, conditional on these funds being used to retain staff. This improves liquidity and helps these businesses stay afloat

• Deferral of the parking space levy for six months

• Deferral of rents for six months for commercial tenants with less than 20 employees in all Government-owned properties.

Helping our most vulnerable

• $34 million boost in funding to prevent homelessness

• $30 million to boost the Energy Accounts Payments Assistance scheme

• $10 million to support charities and $6 million additional funding for Lifeline’s operations in NSW.

Childcare

The NSW Government also announced  $82 million for 260 council childcare centres ineligible for the federal government’s JobKeeper subsidy and another $51 million for preschools. You can see the details of the announcement here.

 

Small Business Recovery Grant

Under the new Small Business Recovery Grant, small businesses will be able to apply for funding up to $3000.

The grants can be used to cover marketing and advertising expenses, make fit-out changes and train staff in how to work safely under the current COVID-19 health conditions.

Applications open 1 July 2020.

Closes 16 August 2020.

For grant guidelines, please click here.

 

Tenant and Landlord Assistance

The NSW Government has announcement mandates that negotiations for rent relief be entered into between a landlord and a tenant (residential or commercial) if the tenant is adversely impacted by COVID-19. It also provides relief to landlords who provide rent relief to tenants through a 25% reduction in land tax.

  1. Eligible landlords will be able to apply for a land tax concession of up to 25% of their 2020 (calendar year) land tax liability on relevant properties.
  2. A further land tax deferral for any outstanding amounts for a three-month period will also be offered to landlords who claim the land tax concession
  3. A Code of Conduct will be in place during the pandemic including the following measures:
  • Landlords must negotiate rent relief agreements with tenants in financial distress due to COVID-19 by applying the leasing principles in the Code
  • A ban on the termination of a lease for non-payment of rent
  • A freeze in rent increases.

The Code of Conduct applies to a household impacted by COVID-19:
• one or more rent-paying members of a household have lost employment or income (or had a reduction in employment or income) due to COVID-19 business closures or stand-downs, or
• one or more rent-paying members of a household have had to stop working or reduce work hours due to illness with COVID-19 or due to COVID-19 carer responsibilities for household or family members, and
• the above factors result in a household income (inclusive of any government assistance) that is reduced by 25% or more.

A business impacted by COVID-19 is as defined by the JobKeeper eligibility for businesses with revenue under $50million suffering a 30% reduction in revenue.

Flowcharts for landlords and tenants, FAQs and sample cases are available here.

An explanation of the land tax incentives is available here.