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
- JobKeeper payment
- Temporary relief for financially distressed businesses
- Business incentives and general help for businesses
- Loans for small and medium-sized businesses
- Instant asset write-off
- Assistance for affected regions, communities and industries
- Child care support
- Assistance for Travel Agents
- Pandemic Leave
- NSW Government tenant and landlord assistance
Supporting apprentices and trainees
If you employ an apprentice or trainee you may be eligible for a wage subsidy of 50% of their wage paid from 1 January 2020 to March 2021.
The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50% of the apprentice or trainee’s wages paid until 31 March 2021.
In addition to the existing support for small businesses, medium-sized businesses will now be eligible for the subsidy, for wages paid from 1 July 2020 – 31 March 2021.
Subsidies will also be available to any new employer who re-engages an eligible apprentice that was displaced by an eligible small or medium-sized business.
For information on Job Trainer, please click here.
The JobKeeper Payment scheme is a temporary subsidy for businesses significantly affected by the coronavirus (COVID-19). Eligible employers, sole traders and other entities can apply to receive $1,500 (until 27 September 2020) per eligible employee per fortnight.
- On 21 July the government announced proposed changes to JobKeeper including an extension through to 28 March 2021. These changes do not impact JobKeeper payments until after 28 September 2020.
- From 20 July, changes to eligibility for JobKeeper payments will affect approved providers of child care services, see JobKeeper key dates.
- You can enrol for the JobKeeper Payment at any time until the program closes if your circumstances have changed. Check if you are eligible at Enrol for JobKeeper.
- We have compliance activities underway to make sure JobKeeper payments are getting to eligible employers, see Keeping JobKeeper payment fair.
From 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper Payment will be required to re-assess their eligibility for the JobKeeper extension with reference to their actual turnover in the September quarter 2020. Businesses and not-for-profits will need to demonstrate that they have met the relevant decline in turnover test in this quarter to be eligible for JobKeeper from 28 September 2020 to 3 January 2021.
Businesses and not-for-profits will need to further reassess their eligibility in January 2021 for the period from 4 January to 28 March 2021. Businesses and not-for-profits will need to demonstrate that they have met the relevant decline in turnover test in the December quarter 2020 to remain eligible for the March quarter 2021.
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.
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.
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 these businesses. Under the Scheme, the Government will provide a guarantee of 50 per cent 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 monthsSMEs with a turnover of up to $50 million will be eligible to receive these loans
- Eligible lenders are currently offering guaranteed loans up to 30 September 2020 on the following terms:
- The maximum total size of loans of $250,000 per borrower.
- The loans will be up to 3 years, with an initial 6 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.
From 1 October 2020, eligible lenders will be able to offer loans during the next phase on the same terms as the current Scheme with the following enhancements:
- Loans can be used for a broader range of business purposes, including to support investment in a period of economic recovery.
- The maximum loan size will be increased to $1 million per borrower.
- Loans can be up to 5 years rather than 3 years and whether there will be a six month repayment holiday will be at the discretion of the lender.
- A loan can be either unsecured or secured (excluding commercial or residential property).
Loans will continue to 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. The decision on whether to extend credit and management of the loan, will remain with the lender.
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.
Instant asset write-off
Eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use.
For assets first used or installed ready for use between 12 March 2020 until 30 June 2021, and purchased by 31 December 2020, the instant asset write-off:
- Threshold amount for each asset is $150,000 (up from $30,000).
- Eligibility extends to businesses with an aggregated turnover of less than $500 million (up from $50 million).
From 1 January 2021, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.
From 7:30 pm AEDT on 6 October 2020 until 30 June 2022, temporary full expensing allows a deduction for:
- The business portion of the cost of new eligible depreciating assets for businesses with an aggregated turnover under $5 billion or for corporate tax entities that satisfy the alternative test.
- The business portion of the cost of eligible second-hand assets for businesses with an aggregated turnover under $50 million.
- The balance of a small business pool at the end of each income year in this period for businesses with an aggregated turnover under $10 million.
Eligibility to use instant asset write-off depends on:
- The business aggregated turnover (the total ordinary income of the business and that of any associated businesses).
- The date the business purchased the asset.
- When it was first used or installed ready for use.
- The cost of each asset being less than the threshold.
The criteria have changed over time so make sure to check whether the business is eligible.
Businesses are not eligible to use instant asset write-off on an asset if he aggregated turnover is $500 million or more.
If temporary full expensing applies to the asset, businesses do not apply instant asset write-off.
Instant asset write-off can be used for:
- Multiple assets, if the cost of each individual asset is less than the relevant threshold.
- New and second-hand assets.
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:
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 Child Care Subsidy and Additional Child Care Subsidy recommenced on 13 July 2020, with the introduction of a number of measures to support providers and families through this period. For more information, please click here.
For more information on JobKeeper for the childcare industry, please click here.
Travel Agents COVID-19 Payment
The COVID-19 Consumer Travel Support Program (the program) will provide a one-off payment in the financial year 2020-21 to assist travel agents and tour arrangement service providers who have been disproportionately impacted due to the COVID-19 pandemic.
The objective of the program is to:
- assist travel agents, and tour arrangement service providers, that qualify for the Jobkeeper scheme, by providing immediate, short term financial support, including for the purpose of ensuring that they can continue to trade and meet their legal obligations to process refunds and credits to Australian consumers.
The intended outcomes of the program are:
- to assist Australian consumers to receive refunds and credits for travel they were unable to undertake due to the impacts of COVID-19; and
- to assist travel agents and tour arrangement service providers to continue to trade or to recommence trade, where possible.
To be eligible, your business must:
- be a travel agent or tour arrangement service provider as defined at Part 12 of these Guidelines and have been operating as a travel agent or tour arrangement service provider prior to the announcement of the closure of international borders by the Prime Minister of Australia on 19 March 2020,
- have lodged a 2018-19 income tax return,
- have had an annual turnover starting from $50,000 up to a maximum of $20 million for the 2019 calendar year,
- have received a payment for a JobKeeper fortnight ending in October 2020 under the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 - that is JobKeeper fortnight 14 (28 September 2020 to 11 October 2020) and JobKeeper fortnight 15 (12 October 2020 to 25 October 2020).
- have a registered and active Australian Business Number (ABN),
- for businesses with a turnover of more than $75,000:
- be registered for the purposes of GST, and
- have lodged all required BAS for the 2019 calendar year.
- have an account with an Australian financial institution that is located within Australian territorial boundaries,
- provide evidence supporting you are a travel agent or tour arrangement service provider by holding active incorporation or registration in Australia as at 30 November 2020 with at least one of the following entities:
- Australian Federation of Travel Agents (AFTA)
- Australian Tourism Export Council (ATEC)
- Council of Australian Tour Operators (CATO), or
- any other applicable tourism peak industry body (as determined by Austrade).
- if a membership with one of the above entities is not held, provision of the Australian and New Zealand Standard Industrial Classification (ANZSIC) code 7220 ‘Travel Agency and Tour Arrangement Services’ as submitted in your 2018-19 income tax return you lodged with the ATO.
Payments will be scaled, with a minimum payment of $1,500 for a business with a turnover of $50,000 up to a maximum payment of $100,000 for a business with a turnover of $20 million.
A total funding pool of $128 million is available.
Eligible applicants include travel agents with a turnover of between $50,000 and $20 million a year.
Closes 13 March 2021
For grant guidelines, please click here.
Pandemic Leave Disaster Payment (GO4491)
The purpose of the grant is to provide lump-sum financial assistance to limit the financial hardship for eligible individuals who are unable to earn an income having been informed by a health official in the state they live and/or work to self-isolate or quarantine due to COVID-19.
This grant is ongoing.
For grant guidelines, please click here.
COVID-19 Federal Government Guidelines
The Department of Health website HERE
The Australian Taxation Office website HERE
The Treasury's response to COVID-19 HERE.
The NSW Government
COVID-19 NSW: Business, Non-Profits – Commercial Lease Support
This program aims to support businesses and commercial property owners who are finding it difficult to meet their lease obligations due to the impacts of COVID-19.
From 1 January 2021 to 28 March 2021 (second extension to the Regulation), if eligible under the Retail and Other Commercial Leases (COVID-19) Regulation 2020 ('the Regulation'), the landlord must comply with their obligations under the Regulation to renegotiate the rent if requested, and mediate any disputes. Unless they have complied, they cannot:
- Evict tenants for not paying their rent or outgoings.
- Evict tenants because their business is not open during the core trading hours in their lease.
- Make a claim on a security bond or guarantee for rent or outgoings.
- Increase the rent.
- Charge tenants interest or fees on any unpaid rent.
If eligible under the Regulation, tenants can work with their landlord to renegotiate their rent or other lease terms. They may also be able to reduce their rent in proportion to their reduced turnover.
Half of any rent reduction will be repayable to the landlord later, and if they reduce their rent they may also be eligible for COVID-19 Land Tax relief.
To be eligible to negotiate the terms of their lease under this second extension to the Regulation, the tenant needs to:
- Have a retail shop lease.
- Be eligible for, or receiving JobKeeper, from 4 January 2021, or be able to demonstrate an actual decline in turnover for the 2020 December quarter of at least:
b) 15% if it’s a not-for-profit business.
- Have had an annual turnover in 2018-2019 under $5 million:
a) Excluding JobKeeper payments.
b) Including other government subsidies such as the NSW small business COVID-19 support grant.
If the landlord/tenant meet the eligibility criteria and they've already negotiated rent relief, they may be eligible to ask to negotiate again before 28 March 2021. That's as long as they're asking to negotiate for a new time period. Flowcharts for landlords and tenants, FAQs and sample cases are available here.
NSW Government Residential Tenancy Support Package, please click here.