Government announced economic response to Coronavirus pandemic
The new $66B package announced additional to the previous economic response announced on 12th Mar 20. Combined with previous actions, total $189 billion across the forward estimates, representing 9.7 per cent of annual GDP.
Support for individuals
Corona virus supplement of $550 to existing and new recipient of Jobseeker Payment, Youth Allowance jobseeker, Parenting payment, Farm household allowance and special benefits. This payment will be on top of current eligible payments.
Payment Support
The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020. Sole trader, casual workers, self employed can apply for jobseeker payment. For more information click here
Temporary early release of superannuation
The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments. Subject to eligibility criteria.
Eligibility criteria
Eligibility To apply for early release you must satisfy any one or more of the following requirements:
· you are unemployed;
· 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: you were made redundant;
· your working hours were reduced by 20 per cent or more;
· if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more
If you are facing financial difficulty, we can help to access the early superannuation
Temporarily reducing superannuation minimum drawdown rates
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements.
Reducing social security deeming rates
On 12 March, the Government announced a 0.5 percentage point reduction in both the upper and lower social security deeming rates. The Government will now reduce these rates by another 0.25 percentage points.
Support for businesses
Boosting Cash flow
The Government is enhancing the Boosting Cash Flow for Employers measure it announced on 12 March 2020. The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000.
Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible. NFPs, including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment at a time where NFPs are facing increasing demand for services.
Under the enhanced scheme, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.
e.g.
if you employ staff and pay wages to your 4 employees $ 60000 per year for each full time employee the PAYG withholding is $15000. You will be eligible for total $15000 (being under $50000). This will be applied as a credit against your business activity statement.
An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an 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. For further information click here
Instant asset write-off
Increasing the limit of instant asset write off from $30000 to $150000
Help for small business who employ apprentice
The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent 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).
The Government is introducing a time limited 15-month investment incentive (through to 30 June 2021) to support business investment and economic growth over the short term, by
accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
More information about funding cost from the following link
If you are finding it hard to repay the loan you can contact your bank. Mostly banks offering 3 to 6 months loan repayment deferrals. Westpac, ANZ Commonwealth, NAB
We at S & H Tax accountants are here to help if you need assistance in this difficult time. You can book an appointment at our website. We offer only online appointments until 13/04/2020. We are helping small businesses and individual in this difficult time. These announcements are not law yet and subject to pass in the parliament and receive a royal assent. Mostly businesses will be able to benefit from 28th Apr 2020 after the Q3 BAS lodgement. We will keep you update further