The Federal and State Government continue to bring stimulus packages to help individuals and businesses manage the economic impact of the Coronavirus (COVID-19).
We have summarised the support announced below and will continue to update this blog daily as more information is released.
We understand these are difficult times and encourage you to get in touch with your AFS accountant to assist your business. Call 03 5443 0344 or email email@example.com
Last updated: 9 June 2020
From Monday 30 March 2020, businesses impacted by COVID-19 will receive a fortnightly wage subsidy of $1,500 per employee as part of a Federal Government bid to prevent millions of people from losing their jobs to the coronavirus pandemic.
We’ve have published a separate blog on this support package with full details. To view it visit: www.afsbendigo.com.au/jobkeeper-payments-everything-you-need-to-know
Please note: If an entity did not qualify for the month of April 2020 because its turnover was not yet sufficiently affected, it can retest in later months to determine if the test is met.
Commercial and residential tenancies
There will be a moratorium on evictions over the next six months for commercial and residential tenancies in financial distress who are unable to meet their commitments due to the impact of COVID-19.
Some principles to underpin and govern intervention to aid commercial tenancies include:
Commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by COVID-19.
We’ve have published a separate blog on this support package with full details. To view it visit: www.afsbendigo.com.au/lease-agreements-stand-landlord-tenant
Boosting Cash Flow for Employers
The Federal Government is providing up to $100,000 to eligible businesses that employ people, with a minimum payment of $20,000. This includes sole traders, partnerships, trusts, companies and not-for-profits and charities.
The payments will provide cash flow support to businesses with a turnover of less than $50 million and not-for-profit entities that employ people.
The measure initially provided up to $25,000 to business, with a minimum payment of $2,000 for eligible businesses but has since been increased.
An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive the additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received.
This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.
The first payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
In order to qualify for the cash boost, you need to have already lodged your 2019 ITR by 12 March 2020 OR lodged a Business Activity Statement (BAS) containing sales in the 2020 financial year by 12 March 2020.
Employers will receive a payment equal to 100% of their salary and wages withheld, with a maximum payment of $50,000 (and minimum of $10,000).
If you need assistance lodging your Instalment Activity Statement (IAS) or Business Activity Statement (BAS) please call us on 03 5443 0344.
Increasing the Instant Asset Write-Off
The instant asset write-off threshold has been increased from $30,000 to $150,000 and expanded access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million). This applies from 12 March 2020 until 30 June 2020, for new or second hand assets first used or installed ready for use in this timeframe.
These changes do not take effect until new laws are passed.
Business owners will be able to claim the deduction in their 2019/20 tax return.
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 30 September 2020. Employers will be reimbursed up to a maximum of $21,000, per eligible apprentice or trainee ($7,000 per quarter).
The subsidy will be available to small businesses employing fewer than 20 full time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
To apply for the subsidy contact an Australian Apprenticeship Support Network provider.
$2,000 cash boost for Incolink members (builders and trades)
Eligible members of Incolink with an available balance will be able to access a COVID-19 payment of $2,000 or balance of their account, whichever is lower. A tax rate of 32% will apply to all COVID-19 payments. These are available from 27 March 2020.
To be eligible for this payment the member must not be earning wages or income from any other source. This includes unemployment benefits, insurances, WorkCover and leave entitlements.
Criteria for the payment includes:
Incolink will confirm with employers when this payment is ready to be paid. For full details visit: https://www.incolink.org.au/
Temporary relief for financially distressed businesses
There is a temporary increase to 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. This includes temporary relief for directors from any personal liability for trading while insolvent, and providing temporary flexibility in the Corporations Act 2001 to provide temporary and targeted relief from provisions of the Act.
The Government is temporarily increasing the current minimum threshold for creditors issuing a statutory demand on a company under the Corporations Act 2001 from $2,000 to $20,000. This will apply for six months.
Companies are encouraged to continue to trade through the crisis with the aim of returning to viability when it has passed. Directors will be relieved of their duty to prevent insolvent trading and associated personal liability for six months. The temporary relief will apply to debts incurred in the ordinary course of business. The debts incurred remain payable.
For full details visit: Temporary relief for financially distressed businesses
Backing Business Investment – Accelerated Depreciation
A time limited 15 month investment incentive will be made to support business investment and economic growth over the short term, by accelerating depreciation deductions. This applies to eligible assets acquired from 12 March 2020 and first used or installed by 30 June 2021.
Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.
Government program participants and applicants
If you’re an existing Government program grantee and have been impacted by COVID-19, you may be eligible to seek additional time to meet your reporting obligations or to complete your project.
The Government will work closely with you to understand the impact of COVID-19 on businesses and to ensure that high quality service delivery continues.
This includes 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.
To discuss how you can be assisted call 13 28 46
Childcare relief package
The Federal Government has announced a relief package for the child care and early childhood education sector which will provide free childcare to around one million families. The package aims to ensure as many of Australia’s 13,000 child care and early learning services as possible keep their doors open throughout the COVID-19 pandemic.
The package will see the Government pay 50% of the child care sector’s fee revenue up to the existing hourly rate based on a point in time before parents started withdrawing their children in large numbers.
This funding will only be available for centres who remain open (with at least one active enrolment) and do not charge families for care. Centres must continue to record attendance of children and comply with all other provider obligations including National Quality Framework and other relevant conditions of approval under Family Assistance Law.
Centres do not need to apply for the payments, they will be paid automatically on a weekly basis.
Parents currently sending children to child care services should continue to do so (without financial cost), whilst parents who have terminated any child’s enrolment since 17 February 2020 should get in contact with the relevant centre to re-start the child’s enrolment. Re-starting enrolments will not require parents to send children to the service, though it will hold places for that point in time when parents are ready to place children back into care.
For those based in Victoria, the State Government has released a second economic survival and jobs package which will provide the following:
Additional payments under the JobKeeper program are now exempt from payroll tax
For employers with a payroll of greater than $3 million, it was announced on 5 May that any additional top up payments made to bridge the gap between an employee’s wage and the $1,500 a fortnight required for the JobKeeper program are now exempt from payroll tax.
This means that if an employee earned $500 for the fortnight based on their ordinary hours, the top up payment of $1,000 to bring that employee’s earnings up to $1,500 would not be subject to payroll tax. The $500 from ordinary hours would still be taxable for payroll tax purposes.
The Victorian Government will provide full payroll tax refunds for the 2019-20 financial year to small and medium sized businesses with payroll of less than $3 million.
The same businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021.
The Government expects to begin making the refunds in the week commencing 23 March 2020.
Rent and land tax relief
Commercial tenants in government buildings can apply for rent relief, a move private landlords are also being encouraged to undertake. 2020 land tax payments will be deferred for eligible small businesses.
$10,000 small business cash boost (CLOSED)
The Victorian Government has established a Business Support Fund to support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.
Funding of $10,000 per business is available and will be allocated through a grant process. Small businesses are eligible if they:
Applications for this grant are now closed.
Additional Victorian Government assistance
The Victorian Government will assist with the following:
The ATO will tailor solutions for businesses that are currently struggling due to COVID-19. There will be administrative relief for certain tax obligations (similar to relief provided following the bushfires) for taxpayers affected by the outbreak, on a case-by-case basis.
If you have been affected by COVID-19, the ATO can work with you to defer some payments and vary instalments you have due.
Monthly GST credits
Businesses on a quarterly reporting cycle may elect to change their GST reporting and payment from quarterly to monthly to get quicker access to GST refunds you may be entitled to. You can only change from the start of a quarter. The ATO have confirmed to AFS that you can call and change to monthly reporting up until 30 April 2020.
While the legislation is still being drafted around the reporting requirements for the JobKeeper Payment, it may be beneficial for a business to move from quarterly to monthly reporting to assist in their calculations on the turnover assessment.
Pay As You Go instalments
If you’re a quarterly Pay As You Go (PAYG) instalments payer you can vary your PAYG instalments on your activity statement for the March 2020 quarter. You can do this by lodging a revised activity statement before your instalment is due and before you lodge your income tax return for the year. Businesses that vary their PAYG instalment rate or amount can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
Remitting interest and penalties
Where your business is affected by COVID-19, the ATO will consider remitting interest and penalties applied to tax liabilities incurred after 23 January 2020.
Low interest payment plans
If your business has been affected by COVID-19 and you need help to pay your existing and ongoing tax liabilities, you can contact the ATO to discuss entering a low interest payment plan.
Income support from Centrelink for impacted individuals
People may be eligible for income support payments if they can’t work because they become sick or need to self isolate, or their income has been otherwise impacted by the economic downturn caused by COVID-19.
There is expanded eligibility to income support payments and a new, time‑limited Coronavirus supplement to be paid at a rate of $550 per fortnight on top of the regular payment. 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 with reduced means testing and waiting period.
The JobSeeker Payment is subject to a partner income test, therefore the Government is temporarily relaxing the partner income test to ensure that an eligible person can receive the JobSeeker Payment, and associated Coronavirus supplement, providing their partner earns less than $3,068 per fortnight, around $79,762 per annum (up from $48,000 previously).
Applicants for Jobseeker Payment and Youth Allowance Jobseeker will:
New applicants are encouraged to claim through online and mobile channels. If applicants do not have internet access, they can claim over the phone.
To claim online, people who do not already deal with Services Australia will need to set up their myGov account, call to verify their identity, and get a link to their Centrelink online account.
Temporary early release of superannuation
The Government will allow people to access up to $10,000 from their superannuation this financial year and in 2020-21.
People will not pay tax on the money they access and withdrawals will not affect Centrelink or veterans’ payments.
To apply for early release you must satisfy any one or more of the following requirements:
If you are eligible for this new ground of early release, you can apply directly to the ATO through the myGov website. You will need to certify that you meet the above eligibility criteria.
Temporary reduction of 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. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
Self Managed Superannuation Fund rental relief
The ATO has confirmed they will not take action where a Self Managed Superannuation Fund (SMSF) landlord gives a tenant, who is also a related party, a temporary rent reduction during this period for the 2019-20 and 2020-21 financial years. The agreed rental reduction should be properly documented, as this is an amendment to the lease terms.
Health insurance rebate:
Further financial relief could be on the way, provided by your private health insurer. Health fund members could receive hundreds of dollars in cash payments or premium reductions as insurers reimburse windfall profits from the COVID-19 pandemic. Funds are considering a number of options for members which include substantial rebates, premium reductions or extended free health insurance cover.
In the next few weeks, major health funds will reveal how they will hand back to their members the billions of dollars being made as a result of COVID-19 surgery and dental bans.
It has previously been announced that this year’s scheduled premium rise will be delayed for six to 12 months. Health funds will also offer premium relief for people who lose their jobs due to COVID-19 and many funds have extended premium cover to all COVID-19 related treatment, even if the patient has silver or bronze level cover.
A preliminary review is likely to be conducted within two weeks and funds should be directed to adopt the new lower premiums as of 1 May. We will update this when changes are released.
Australia’s banks will extend the six month deferral of loans, building on the Australian Banking Association’s (ABA) Small Business Relief Package, to 30,000 more businesses across the country. This support now extends to 98% of all businesses with a loan from an Australian bank.
Businesses with total business loan facilities of up to $10 million (up from the $3 million small business threshold) will now be able to defer repayments for loans attached to their business for six months. These businesses are generally much larger and employ a greater number of people. More details here.
The Small Business Relief Package, announced by the Australian Banking Association on Friday 20 March, will allow customers financially affected by COVID-19 to defer principal and interest repayments for six months.
Australia’s participating lenders will also start offering loans up to $250,000 to small and medium sized businesses, where no repayments will be required for six months. The unsecured loans are 50% guaranteed by the Federal Government and no interest will be charged unless the money is actually used.
In addition to these, many banks are offering further assistance. The move applies to all banks who agree to participate. Here’s what to do for the five major banks:
Bendigo and Adelaide Bank Limited
Customers will have access to the deferral support package from today, Monday 23 March. Further assistance includes:
Business banking customers, large and small, should speak to their relationship manager or call 1300 236 344.
Support measures will be in place from Friday 27 March. These include:
Home loan customers:
For details on modifying a loan payment with ANZ visit https://www.anz.com.au/support/internet-banking/accounts/loans/direct-payments/modify/
Business customers will be able to:
Personal customers will be able to:
Customers can submit a request for support online. Alternatively, you can contact NAB on 13 22 65 for support.
Commonwealth Bank of Australia
Customers will have access to a number of support measures, including all mortgage holders and small businesses customers, from Monday 23 March.
There will also be support for small and medium business, and community group customers who may be facing financial difficulty by providing financial assistance, including:
If you have a Relationship Manager, they will be able to assist you. Otherwise, you can contact the Business Financial Assistance team on 13 26 07.
Support measures will be in place from Friday 27 March.
Home loan customers:
Deposit and transaction account customers
Additional help is available to small business customers who are impacted by recent disasters and are experiencing hardship, including:
To defer your loan visit:
Any small business who has not already been contacted is being advised to contact their bank to apply.