Small Business Resource Pack (COVID-19)
(Updated 15th April 2020)
Businesses who have been significantly impacted by COVID-19 will be able to access a wage subsidy called “Jobkeeper” this to assist with continuing to pay employees. Under this JobKeeper program you will be able to claim a fortnightly payment of $1,500 per eligible employee from 30th March 2020. This includes those self employed.
This measure is designed to ensure eligible employees remain connected to their workforce and to assist businesses restart quickly, once the crisis is over.
The rules governing the JobKeeper payments have now been released by the ATO, explaining in detail the eligibility criteria for both employers and their employees.
Employers must follow the steps below to firstly ensure eligibility and then to make a claim;
- Work out if you are an eligible employer
- Identify your eligible employees
- Enrol and apply for the JobKeeper Payments(Enrol from 20th April)
- Pay your eligible employees
- Notify your employees
- Be aware of your responsibilities and the integrity measures
Further details can be found HERE on the ATO website
(Updated 31st March 2020)
On 30 March 2020, the Government has announced a new wage subsidy plan, where employers will receive a $1,500 per fortnight ‘job keeper payment’ before tax for each employee they keep on over the next six months. It will be available to full and part time workers, sole traders and casuals who have been with their employer for 12 months or more. The employees must also be either 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 workers from New Zealand on 444 visas. It will be in place for 6 months.
Eligible employers will be those with annual turnover of less than $1 billion who self-assess that have a reduction in revenue of 30 per cent or more, relative to a comparable period a year ago (minimum one-month period). Employers with an annual turnover of $1 billion or more would be required to demonstrate a reduction in revenue of 50 per cent or more to be eligible. Eligible employers include businesses structured through companies, partnerships, trusts and sole traders and not for profit entities.
The eligible employers must pay the eligible employees at least the $1,500 payment per fortnight, even if their regular wage per fortnight is less than $1,500.
The fortnightly $1,500 payment will start to be issued from 1 May 2020 and will be backdated to 30 March 2020. If employees have been stood down by their employer since 1 March 2020, they are still eligible for these payments. The payments will be delivered through the ATO. Eligible businesses can apply for the payment online and are able to register their interest via ato.gov.au from 30 March 2020.
Partner income restrictions for welfare recipients eased
Over the next six months the Government will also ease the restrictions that state anyone whose partner earns $48,000 or more is ineligible to receive the Jobseeker payment (a supplement of $550 a fortnight) and Coronavirus supplement (a one off payment of $750 to eligible income support recipients) that was announced in the Government’s first economic stimulus package.
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).
The personal income test for individuals on JobSeeker Payment will still apply.
(Updated 22nd March 2020)
This morning, Sunday, 22 March 2020, Prime Minister Scott Morrison and Treasurer Josh Frydenberg announced an additional $66b in COVID-19 economic support. Coupled with the Government’s previous $17.6b stimulus package, $90b from the RBA and $15b from the Government to deliver easier access to finance, national stimulus currently sits at nearly 10% of GDP.
In response, the priority for this stimulus remains support for small businesses, with payments of 100% of PAYG withheld on salaries and wages of up to $100,000, and access to a further $20b in government guaranteed unsecured loans (capped at $250,000) on offer.
The Government has also increased support for individuals and sole-traders, including early access to superannuation
All non-essential travel to be cancelled
All non-essential travel, including domestic travel, has been restricted.
Boosting cash flow for employers
An increase from the first package, small and medium business and not-for-profit (including charities) employers with aggregated annual turnovers of under $50m will be eligible for tax-free payments of up to $100,000 per employer. The first payment (capped at $50,000) will be made after 28th April and the second payment (also capped at $50,000) after 28 July 2020. This is the single largest measure in this package and represents approximately $31.9b.
SMEs with aggregated annual turnovers of under $50m employers will now receive two payments equal to 100 per cent of their PAYG withheld on salary and wages with each maximum payment increased from $25,000 under the first package) to $50,000, for a total maximum payment of $100,000.
Eligible businesses that pay salary and wages but are not required to withhold tax will receive a minimum payment of $20,000, up from $2000 in the first package. The payment will be available from 28 April 2020 and, as stated in the previous stimulus update, will be paid as a credit to the business upon lodgement of their activity statements.
The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.
Coronavirus SME Guarantee Scheme
The Government commits to underwrite $20b worth of loans as a 50 per cent guarantee to support lending of up to $40 billion to SMEs from bank and non-bank lenders.
Starting in early April, this will apply to eligible loans for businesses with annual turnovers of up to $50 million and will include an upfront six month freeze on repayments.
The loans will be unsecured but used only for working capital purposes and will apply to loans granted within six months from April 1, 2020. New and existing bank customers will be able to apply for loans up to $250,000 over three years.
Providing temporary relief for financially distressed businesses
Temporary increase to the threshold at which a creditor can take action to initiate insolvency or bankruptcy from $2000 to $20,000 and giving companies and individuals six months instead of 21 days to respond.
Relief for directors for personal liability when the company is trading while insolvent.
The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the coronavirus.
This relief will be provided over the next six months.
ASIC has also released guidance on AGMs and reporting for listed entities.
Payments for households
A further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the coronavirus supplement. This second payment will be made automatically from 13 July 2020 and is estimated to cost $4b over the forward estimates period.
Temporary eligibility expansion to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight.
This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
The Coronavirus supplement will be paid for the next 6 months. Eligible income support recipients will receive the full amount of the $550 Coronavirus supplement on top of their payment each fortnight.
This measure is estimated to cost $14.1 billion over the forward estimates period.
Early release of superannuation
From April, individuals will be able to access their superannuation, capped at $10,000 this financial year and a further $10,000 next financial year. The withdrawals will be tax-free and will be made available to those eligible for the coronavirus supplement as well as sole traders who have seen that hours of work, or income fall, 20% of more as a result of the coronavirus.
Eligible individuals will be able to apply online through myGov for access of 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 another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments. This measure is estimated to cost $1.2 billion over the forward estimates period.
Superannuation minimum drawdown rates and social security deeming rates
Temporary reduction to superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21.
Reduction of the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA. As of 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent. This measure is estimated to cost $876m over the forward estimates period.
(below updated 21st March 2020)
It certainly goes without saying we are experiencing very interesting and challenging times across the world, with the outbreak of Coronavirus (COVID-19).
As it currently stands, the World Health Organization (WHO) has announced that COVID-19 is a pandemic.
The Australian Government, Australian Taxation Office and the State Revenue Offices continue to announce details of economic response to the Coronavirus.
Through this resource page we will continue to post updated information regarding the assistance being provided to businesses and personal taxpayers as it comes to light, so please bookmark and monitor this page regularly. We will continue to provide information via our social pages, Facebook, Instagram and LinkedIn so please also monitor these.
We have invested heavily in cloud technology over the years which places our business in a strong position to continue to operate and service our clients through these testing times. Rest assured we are fully committed to servicing our clients and maintaining business as usual, the best we can.
Federal Economic Support Measures
One the 12th March the Federal Government announced their first economic stimulus measure. There were 4 key points to this announcement.
These measures are yet to pass but are expected to be put to parliament on Monday 23rd March.
A summary of these measures include;
Delivering support for business investment
Cash flow assistance for employers
Stimulus payments to households to support growth
Assistance for severely affected regions
Full details can be found Treasury response
Cash flow support for employers
SME’s with annual turnover under $50 million will receive assistance to cover the costs of employee wages and salaries equal to 50% of PAYG withheld, with a minimum of $2,000 and a maximum of $25,000 over six months. Businesses that pay salary and wages but are not required to withhold tax will also receive the minimum payment of $2,000. This payment will be a tax free and non-assessable.
Please note, as an employer you do not need to apply for this relief – the ATO will apply this post lodgement of your IAS/BAS during the March – June 2020 period.
Support for apprentices and trainees
Eligible employers can apply for a wage subsidy of 50% of an apprentice or trainees wage paid during the 9 months from 1 Jan 2020 to 30 Sep 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.
Eligible to 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 Mar 2020
Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider
Employers can register for the subsidy from early April 2020, and final claims for payment must be lodged by 31 Dec 2020
If you have apprentices and/or trainees, please contact us for assistance to ensure you are correctly registered and able to claim this measure.
Instant Asset Write-off increased to $150,000
The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding the access to include businesses with an aggregated turnover of less than $500 million (previously $50 million).
Businesses can immediately write-off multiple assets – Please note – threshold applies on a per asset basis
Applies to new or second-hand assets purchased and ready for install from 12 March 2020 until 30 Jun 2020
If you purchase an asset in excess of the threshold limits you will be able to deduct 50% of the initial cost upon installation, and then the remaining balance will be treated by standard depreciation rules that currently exist.
If you are considering purchasing assets through this time, please consider the cashflow implications of the purchase. Accessing this instant asset write off DOES NOT mean you will receive a tax refund, it simply brings forward your tax deduction and lowers your taxable position in the 2020 Financial Year. Please contact our team to discuss the cashflow implications of this measure.
Managing your tax & ATO obligations
The ATO have released details on their support measures to assist those affected by COVID-19.
Further details can be found at these links
Deferral of payment dates for activity statements, income tax assessments and FBT assessments
Option to change from quarterly to monthly BAS reporting to access GST refunds quicker.
Option to vary PAYG I to nil for the March quarter BAS and claim a refund for any instalments made for Sep and Dec 2019 quarters
Remission of interest and penalties incurred on or after 23 Jan 2020
Availability to enter into low interest payment plans.
Fair Work Australia
Fair work Australia regularly update a dedicated page to help you understand your obligations as an employer. Please monitor this page in relation to workplace laws;
We also strongly recommend getting in touch with a HR specialist – let’s ensure we are treating our people well!
State Based Support Measures
$10 Million local economic package
A Virtual Business Support Summit at Melbourne Town Hall
Suspending fees for Food Act registrations and street trading permits for 3 months
Halving rent for eligible tenants in Council owned buildings for 3 months
New South Wales
Waiver of Payroll Tax for businesses with payrolls of up to $10M for three months
Bring forward of raised Payroll Tax thresholds for next FY
$80M for fees and charges to be waived form small business such as cafes and restaurants and those in trades
Worker Transition Scheme and Rapid Response
Business and Industry Support
Payroll Tax Support
Support for tourism operators and hospitality workers
Support for Fisheries
Support for Exporters
Counselling and support
Queensland COVID-19 jobs support loans
QRIDA – Job Support Loans of up to $250k for carry on finance with an initial 12-month interest free period for businesses to retain staff
$25,000 cashflow assistance to small to medium sized businesses, with a minimum payment of $2,000 or eligible businesses
15 month incentive to support business investment and economic growth over the short-term
Wage subsidy if you employ and apprentices and trainees
$350 million stimulus package for local government to upgrade roads, hospitals, tourism infrastructure and expanded economic and business growth fund
$607 million stimulus package to support WA households and small businesses in the wake of COVID-19
$402 million to freeze household fees and charges until at least July 1, 2021
Freeze will apply to entire ‘household basket’, including electricity, water, motor vehicle charges, emergency services levy and public transport fares
Energy Assistance Payment (EAP) doubled to support vulnerable Western Australians, including pensioners
$114 million in additional measures to support small businesses
Small businesses that pay payroll tax will receive a one-off grant of $17,500
$1 million payroll tax threshold brought forward by six months to July 1, 2020
Businesses impacted by COVID-19 can defer payroll tax payments until July 21, 2020
Building on $760 million announced in the past few months to stimulate economy
Stimulus measures made possible due to McGowan Government’s responsible financial management and strong budget surplus
Interest free loans available to small businesses in hospitality, tourism, seafood production and export section
Businesses with turnover of less than $5 Million will be eligible for loans to purchase equipment or restructuring business operations
Payroll tax waiver for businesses with payrolls up to $5 Million
Payroll tax deferred for 4 months for businesses in hospitality, tourism and seafood industries
Small businesses contracted by the state government to be paid within 14 days instead 30 days
$5,000 small business grant to assist in hiring apprentices or trainee in tourism, hospitality, construction or manufacturing industries
Fees wavier for certain licenses and leases applicable to small businesses
$65 Million Jobs Rescue & Recovery plan for the purpose of keeping businesses open, maintaining cash flow and territorian working
Providing all eligible businesses with $10,000
If the recipient put in their own fund of $10,000, the government will match that with an additional $10,000- Creating a $30,000 value
Freezing government charges – including electricity, water and car registeration until 1st July 2021
$6,000 grant for Territory homeowners and landlords who spend $2,000 and, $4,000 grant who spend $1,000 in home improvement
Bank and Financial Institutions
Most banks have hardship assistance programs in place to help those in need. Each bank has made specific announcements relating to COVID-19 related assistance. Please visit the following links to view your banks assistance measure
Banks to defer loan repayments for small businesses affected by COVID-19 for six months, starting Monday