There have been many COVID-19 announcements about Federal and State Government stimulus packages available to assist businesses and individuals with the impact of the COVID-19 pandemic.
Taking into consideration factors such as falling demand, diminished workforce mobility and leaner supply chains, we have put together the latest economic insights, ideas and resources to help you navigate the outbreak's fallout.
Financial support for business
The Federal Government has introduced its second stimulus package to cushion the economic impact of the COVID-19 virus. The package is aimed at helping small and medium-sized enterprises (SMEs) cope with the current downturn in the economy.
The support includes:
- The Government will provide tax-free cash flow boosts of between $20,000 and $100,000 to eligible businesses (and not-for-profit entities) with aggregate turnover under $50 million, to encourage them to retain employees.
- On 30 March 2020, the Government announced the JobKeeper Payment for eligible businesses, whose turnover has reduced significantly relative to the same period in the prior year. The Government will provide $1,500 per fortnight per eligible employee for a maximum of six months.
- The Government is supporting small businesses to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020.
- The instant asset write-off threshold is increased from $30,000 to $150,000 and access is expanded to include businesses with aggregate turnover below $500 million (up from $50 million). This is a temporary measure and applies to new or second hand assets first used, or installed ready for use from 12 March 2020 to 30 June 2020.
- Businesses with an aggregate turnover below $500 million will be able to claim an immediate deduction of 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. The measure applies to new assets only that are first held, and first used or installed between 12 March 2020 and 30 June 2021.
Financial support for individuals
The Government will make a special Coronavirus supplement payment of $550 per fortnight for the next six months to eligible income support recipients. Individuals will be eligible for the supplement payment if they are currently receiving (or become eligible for) income support.
The supplement will commence from 27 April 2020 and to be deemed eligible an individual would be currently receiving income support such as:
- JobSeeker Payment
- Youth Allowance for job seekers
- Parenting Payment
- Farm Household Allowance
- Special Benefit
This is in addition to any other benefits being received, so it will be an additional $550 on top of the normal benefits.
Under the JobKeeper program, businesses and not-for-profits affected by COVID-19 will receive fortnightly payments to help cover the costs of wages of their employees. The JobKeeper program starts on 30 March 2020 and ends 27 September 2020.
Key elements of the measure include:
- The JobKeeper payment will be paid to eligible employers for up to six months.
- The payment will be made in respect of employees who were on the books at 1 March 2020, have been retained and continue to be engaged by the employer.
- Eligible employees will only be eligible to receive this payment from one employer.
- Full time, part time and casual employees over the age of 16, including stood down employees will be eligible to receive the JobKeeper payment. A casual employee must have been with their employer for at least the previous 12 months.
- Businesses without employees, such as sole traders, will be eligible for the JobKeeper payment.
The Federal Government has also announced they will temporarily relax the partner income test to ensure a person eligible to receive the JobSeeker Coronavirus Supplement, provided their partner earns less than $3,068 per fortnight (approximately $79,762 per year). The personal income test for individuals on JobSeeker Payments will remain the same.
Land tax for landlords and tenants
Land tax relief for landlords and tenants following the release of the Mandatory Code of Conduct earlier this month, the National Cabinet signed off on the Mandatory Code of Conduct (“the Code”) for commercial landlords and tenants, which included a set of “good faith leasing principles”.
Early access to superannuation
Individuals may be able to access up to $20,000 of their superannuation in the event of hardship. This is in the form of two separate payments of up to $10,000 and between 1 July 2020 and 30 September 2020.
Key elements of the measure include:
- Eligible to receive JobSeeker payment, youth allowance for job seekers, parenting payment, special benefit or farm household allowance; or
- On or after 1 January 2020:
- Have been made redundant; or
- Working hours have been reduced by 20% or more; or
- As sole trader your business has been suspended or there is a reduction in turnover of 20% or more
Applications for early access to your superannuation benefits will be undertaken via myGov and were made available from mid-April.
Reduced drawdown and deeming rates for retirees
Individuals who are drawing an income stream from superannuation will have their minimum requirement reduced by 50% for the 2019-2020 and 2020-2021 financial years.
The information contained in this information sheet is general in nature. It should not be taken as specific advice. Any cash flow and tax benefit that may be available will be subject to the passing of the proposed reforms into legislation and your own particular circumstances.
To access our ongoing analysis and view more resources to deal with the impact of coronavirus on your business, visit our COVID-19 advisory centre at: www.rsm.com.au/coronavirus