Earlier today the government announced an additional $66 billion stimulus package in an attempt to deal with the impact of COVID-19 on the Australian economy.
WHAT'S IN IT FOR YOUR BUSINESS?
PAYG refund – assistance with cash flow:
Businesses will receive a payment equal to 100% (increased from 50%) of the amount withheld from your employees’ wages up to a maximum of $100,000 (increased from $25,000).
Under the enhanced scheme, employers will receive a payment equal to 100% of the PAYG withheld from their employees’ wages up to a payment limit of $50,000. An additional payment will be introduced during the July – October 2020 period and employers will receive an additional payment equal to the amount already received in equal proportions across the relevant BAS periods.
The first payment will be delivered by the ATO as a credit in your activity statement from 28 April 2020 and depending on the activity statement lodgement cycle of your business, you will receive the credits for the following months:
-
Quarterly – March 2020 and June 2020
-
Monthly – March 2020, April 2020, May 2020 and June 2020
If you are a monthly lodger, the payment will be calculated at six times the rate (300 %) in the March activity statement up to a maximum payment of $50,000.
Certain businesses which are registered for PAYG but are not required to withhold from their employees’ salaries can receive a minimum payment of $20,000 (increased from $2,000).
https://treasury.gov.au/coronavirus/businesses
Loan Guarantees:
The Government will guarantee 50% of new unsecured loans for businesses with turnover under $50 million. The Government will provide eligible lenders with a guarantee for loans with the following terms:
-
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.
https://treasury.gov.au/coronavirus/business-investment
Temporary relief for financial distressed business:
The package includes the following to protect businesses as a result of the economic downturn:
-
A temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive;
-
A temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice, and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition;
-
Temporary relief for directors from any personal liability for trading while insolvent; and
-
Providing temporary flexibility in the Corporations Act 2001 to provide targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis. For owners or directors of a business that are currently struggling due to the Coronavirus, the ATO will tailor solutions for their circumstances, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.
https://treasury.gov.au/coronavirus/businesses
The above changes are in addition to those previously announced as part of the first stimulus package which also included:
-
Increasing the instant asset write off threshold for certain businesses to $150,000
-
Acceleration depreciation for certain businesses
WHAT'S IN IT FOR INDIVIDUALS?
Income support:
The Government will expand the eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid [$550 per fortnight].
Household support:
The Government is providing two $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The payments will be made as follows:
-
the first payment (announced on 12 March 2020) will be available to people who are eligible payment recipients and concession card holders at any time from 12 March 2020 to 13 April 2020 inclusive; and
-
the second payment will be available to people who are eligible payment recipients and concession card holders on 10 July 2020.
https://treasury.gov.au/coronavirus/households
Temporary early release of Superannuation:
Individuals affected by COVID-19 will be able to access up to $10,000 of the superannuation in 2019-20 and a further $10,000 during the 2020-21 year. These amounts will be tax free and you must satisfy one of the requirements to access these payments:
-
you are unemployed; or
-
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; or
-
on or after 1 January 2020:
-
you were made redundant; or
-
your working hours were reduced by 20 per cent or more; or
-
if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf
Temporary reduction of minimum superannuation drawdown rates:
There will be a temporary reduction in minimum drawdown requirements of account based pensions and similar accounts by 50% for the 2019/20 and 2020/21 financial years.
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_support_for_retirees_to_manage_market_volatility.pdf
Please note the above measures are subject to the relevant legislation passing through parliament. At this stage, parliament is scheduled to resume on 23 March 2020.