Small Business Resource Pack (COVID-19)

(updated 5th April 2020)

JobKeeper Payment

The Prime Minister has announced a $130b “JobKeeper” package, which is available to all businesses significantly affected by coronavirus – the largest package delivered by the Federal Government in response to COVID-19 to date. In acknowledging that Australia needed to dig deep to “get through to the other side” of this crisis, the Prime Minister noted that the package is one that no Australian Government has ever delivered before, and one he said he hoped would never have to be delivered again.

This measure will provide a flat minimum payment of $1,500 per employee per fortnight over the next 6 months to businesses affected by coronavirus COVID-19. This amount is equivalent to 70% of the median wage and represents 100% of the median wage for those industries most affected, such as tourism, hospitality and retail.

Factsheets

ATO Registration can be accessed HERE

Employee Eligibility

Full-time and part-time employees and casuals (that have been with their employers for at least 12 months) are all eligible for this payment, subject to them being at least 16 years of age. It will also be available New Zealanders in Australia on 444 Visas.

Only currently engaged employees, including those stood down, qualify for the payment. If employees have been retrenched, they would need to be reinstated to qualify for the benefit.

For most employers, Single Touch Payroll data will enable the ATO to pre-populate employee details.

Sole-traders without employees that meet the turnover tests will also be eligible.

Business eligibility is subject to required “turnover decline”

Businesses with turnover of up to $1 billion that have seen their revenue drop by 30%, and businesses with a turnover of more than $1 billion that have seen their revenue drop by 50%, due to coronavirus are eligible to register with the ATO for the JobKeeper subsidy.

The turnover decline will require that turnover of a current period be compared with a comparable period of a year earlier (of at least one-month duration).

Not-for-Profit organisations (including charities) also qualify. However, financial institutions that are subject to the Major Bank Levy will not be eligible.

The package commences from today and applies to employees registered with their employer from 1 March 2020. The first payment will be made via the ATO from 1 May and will be backdated to today (30 March 2020).

How will this Subsidy work with the Jobseeker Payments?

The Prime Minister and Treasurer were clear that people can either access the Jobseeker payment or the JobKeeper payment, but not both.  It was also flagged that the partner threshold for people looking to access the Jobseeker payment will be lifted to nearly $80k ($79,762), allowing more people to access support in the future.

Practical features of the subsidy

  • Employers will receive $1,500 per employee per fortnight, irrespective of what the employee’s earning are
  • For employees who earn less than $1,500 in a particular fortnight, the employer will need to top up to $1,500
  • Employers must notify eligible employees that they are receiving the JobKeeper Payment
  • Employees with multiple jobs can only benefit from one JobKeeper payment
  • Employees are subject to PAYG tax on their earnings including the component supported by the JobKeeper Payment
  • Superannuation guarantee obligations will continue and it will be up to the employer if they want to pay Superannuation on any additional wage paid because of the JobKeeper Payment.

 

 

(below 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.

Coronavirus supplement

  • 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.  Please contact myself or my team at any time, if you have any questions in relation to the information below or any other matter that we can assist with.

  1. Federal economic support measures
  2. ATO announcements
  3. Fair Work Australia (employment) measures
  4. State based support measures
  5. Bank & Financial Institutions
  6. Dalcorp – Business Continuity Plan (for your business)

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

Please find below a quick summary of the ATO support

  • 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;

Fair Work Aust – Coronavirus and Aust 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

Victoria

Victorian Stimulus Package

  • $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

New South Wales Stimulus Package

  • 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

Queensland

Queensland Stimulus Package

  • 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
  • Promoting Queensland
  • Counselling and support
  • Queensland COVID-19 jobs support loans
  • Mentoring Sessions
  • Financial Workshops
  • 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

South Australia

South Australia Stimulus Package

  • $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

Western Australia

Western Australia Stimulus Package

  • $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

Tasmania

Tasmanian Stimulus Package

  • 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

Northern Territory

Northern Territory Stimulus Package

  • $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

Business Continuity Plan – for your business

As a business owner, there is one key thing you need to focus on now – keeping your business alive during these difficult times.  It’s vital that you build a cash ‘war chest’ which will allow you to keep trading immediately and through the coming difficult months. Also, we want to help you to protect the health of your employees, customers and clients.

To assist with this we have developed a Business Continuity Plan which is a comprehensive action plan which covers off critical points you should action in your business immediately in these uncertain times.  The plan covers the following areas;

  • COVID-19 Continuation Plan
  • Business Owner Decisions
  • Team Decisions

We are providing this plan free of charge for our clients to use.  Should you like our assistance to implement the plan into your business, we encourage our clients to take up the offer of a Zoom/Skype meeting to help action this plan.  If you would like a copy of the Business Continuity Plan please email us at accountant@dalcorpas.com.au