Economic stimulus packages

Income support for individuals and households

1. Over the next six months, the Government is temporarily expanding eligibility 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 JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
2. Two separate $750 payments will be made 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. The second payment will not be made to those eligible for the Coronavirus supplement.
3. Individuals affected by the Coronavirus will be allowed access of 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. The application process will be available from mid-April 2020.
4. To help support retirees, 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 may benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements. This measure is available immediately.
5. Social security deeming rates will be reduced as of 1 May 2020. The upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent. The reductions reflect the low interest rate environment and its impact on the income from savings.

Support for businesses

1. Cash flow assistance for business

All small-to-medium businesses which employ people will receive between $20,000 and $100,000 in the form of a tax-free payment from the ATO when you lodge your activity statements in the coming months. Your business needs to turnover less than $50 million to be eligible and this only applies to ‘active eligible employers established prior to 12 March 2020’ so no setting up new companies!

The first payment, known as ‘boosting cash flow for employers’, will be paid as follows:

• Monthly activity statement lodgers will get a payment equal to 300% of the PAYGW lodged on the March 2020 BAS then 100% of the PAYGW lodged on the April, May and June activity statements subject to the $50,000 cap.
• Quarterly activity statement lodgers will get a payment equal to 100% of the PAYGW lodged on the March and June 2020 activity statements subject to the $50,000 cap.

The second payment, the ‘additional payment’, will be paid to employers who ‘continue to be active’ as follows:

• Monthly activity statement lodgers will get an additional payment when they lodge their June 2020, July 2020, August 2020 and September 2020 activity statement, each payment equal to 25% of the total received under the ‘boosting cash flow for employers’ payment.
• Quarterly activity statement lodgers will get an additional payment when they lodge their June 2020 BAS and September 2020 BAS, each payment equal to 50% of whatever payment they received under the ‘boosting cash flow for employers’ payment.
• The idea being that this ‘additional payment’ effectively doubles whatever the employer receives under the ‘boosting cash flow for employer’s payment’.

Note the minimum payment eligible employers can expect to receive is $10,000 per financial year even if their PAYGW is less than that. The first minimum payment of $10,000 will be paid when you lodge the March 2020 BAS and the second minimum payment is split in two payments of $5,000, one for the June 2020 BAS and the other for the September 2020 BAS.

These payments are all triggered by the lodgement of your activity statements

Timing of Boosting Cash Flow for Employers payments

The Boosting Cash Flow for Employers measure will be applied for a limited number of activity statement lodgements. The ATO will deliver the payment as a credit to your business upon lodgement of your activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.

Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300 per cent) in the March 2020 activity statement.

The minimum payment will be applied to the business’ first lodgement.

Additional payment

The additional payment will be applied to a limited number of activity statement lodgements. The ATO will deliver the payment as a credit to your business upon lodgement of your activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.

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 Boosting Cash Flow for Employers payment (up to a total of $50,000).

Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 lodgements. Each additional payment will be equal to a quarter of your total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

2. Tax incentives for businesses

• Businesses are being encouraged to spend on equipment and other investments through an extension of the instant asset write-off scheme.
• Currently the scheme is restricted to businesses with turnovers of up to $50 million, for maximum investments of $30,000.
• Under the new arrangements, companies with turnovers of up to $500 million will be able to take advantage of assets write-offs of up to $150,000.
• The $150k deduction limit 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.
• For assets over the $150,000 limit, businesses will receive an instant 50% depreciation with the remainder depreciated at normal rates.
• The 50% instant depreciation applies from 12 March 2020 until 30 June 2021, for new assets only that are first used, or installed ready for use in this timeframe.

3. Keeping apprentices in work

• Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 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.
• Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
• Eligibility: 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 2 April 2020. Final claims for payment must be lodged by 31 December 2020.
• Further information is available at dese.gov.au

4. Temporary relief for financially distressed businesses

• The threshold for the minimum amount a creditor can issue a statutory demand on a company will temporarily increase from $2,000 to $20,000. The time frame to respond to the demand will increase from 21 days to 6 months.
• Directors will be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business. This will apply for six months.
• The threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor will temporarily increase from its current level of $5,000 to $20,000.
• The time a debtor has to respond to a bankruptcy notice will be temporarily increased from 21 days to six months.
• In the case of voluntary bankruptcy, the period of protection when unsecured creditors cannot take further action to recover debts will be temporarily extended from 21 days to six months.
• The solvency safety net, and the bankruptcy safety net will apply for six months.

5. Supporting the flow of credit

• Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs with a turnover of up to $50 million
• Maximum total size of loans of $250,000 per borrower.
• The loans will be up to three years, with an initial six-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.
• Loans are expected to commence by early April 2020 and will be available for new loans until 30 September 2020

Queensland

1. A deferral of payroll tax

If your business has been affected by the coronavirus, you may be able to apply for a relief package to defer paying payroll tax returns until 31 July 2020.

You can apply at any time the relief package is available. If approved, your deferral will begin from the next return that is due.

You must continue to lodge returns (without paying them) during this time and you can resume paying returns at any time during the deferral period.

You can apply for the deferral here.

2. Jobs Support Loans

The Queensland Government announced on Tuesday, 17 March a new $500 million loan facility, interest free for the first 12 months, to support Queensland businesses impacted by coronavirus to retain employees and maintain their operations.

The $500 million concessional loan facility will comprise low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period for businesses to retain staff.

The Queensland Rural and Industry Development Authority (QRIDA) is responsible for the administration of these concessional loans and is currently taking expressions of interest in the lead up to rolling these loans out as soon as possible.

You can register your interest here or by calling 1800 623 946.

3. Small and medium business power bill relief

Small and medium businesses may be eligible for a $500 rebate off energy bills.

Businesses who consume less than 100,000 kilowatt hours (kWh) will receive the rebate. This will be automatically applied on your business electricity bills.