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
- Income support for sole traders or employees
- JobKeeper payment
- Early access to super
- Temporarily reducing superannuation minimum drawdown rates
- Temporary relief for financially distressed businesses
- Business incentives and general help for businesses
- Loans for small and medium-sized businesses
- Instant asset write-off extended to 31 December 2020
- Boosting cash flow for employers - for-profit and not-for-profit organisations - sample cases to help you work out what you will receive
- HomeBuilder Grant Scheme
- Assistance for affected regions, communities and industries
- Funding for mental health and domestic violence services
- Child care support
- 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.
Income support for sole traders and employees
The income support payment categories eligible to receive the Coronavirus Supplement are:
- JobSeeker Payment (those currently receiving Partner Allowance, Widow Allowance, Sickness Allowance and Wife Pension)
- Youth Allowance JobSeeker
- Parenting Payment (Partnered and Single)
- Farm Household Allowance
- Special Benefit recipients
Anyone who is eligible for the Coronavirus Supplement will receive the full rate of the supplement of $550 per fortnight.
From 25 September 2020 to 31 December 2020, the Supplement amount will be $250 per fortnight.
For information on JobSeeker, 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.
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.
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
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 motorcycles 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’ salaries 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 salaries 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 that 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 $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 the 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 the 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.
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.
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
Tenant and Landlord Assistance
The NSW Government has announced a mandate 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.
- 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.
- 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
- 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 JobKeeper eligibility - businesses with revenue under $50million suffering a 30% reduction in revenue.
Flowcharts for landlords and tenants, FAQs and sample cases are available here.
NSW Government Residential Tenancy Support Package, please click here.