Prime Minister Scott Morrison has unveiled a second round of stimulus measures, aimed to help businesses and keep people employed during the economic downturn caused by COVID 19.
Boosting Cash Flow for Employers
Further to the already announced measures on 12th March 2020, the Government will be providing eligible small and medium-sized businesses, and not-for-profits (NFPs) that employ people, with a minimum of $20,000 and up to $100,000 in tax free payments.
Those businesses who employ people and meet the following will be eligible:
- Small & medium-sized business entities with aggregated annual turnover under $50million
- NFPs, including charities, with aggregated annual turnover under $50 million
Payments will be rolled out to Employers as follows:
- Payment equal to 100% of their salary and wages PAYG Withholding (up from 50 per cent)
- Maximum payment being increased from $25,000 to $50,000
- Minimum payment is being increased from $2,000 to $10,000
- Additional payment being introduced in the July – October period where eligible entities will receive an additional payment equal to the total of all 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.
- Payments will be delivered by the ATO as a credit on activity statements from late April
Based on the above we would therefore recommend bringing forward the preparation and lodgement of your March quarter activity statement.
Supporting the flow of credit:
Support for immediate cash flow needs for SMEs (small to mid-size enterprise)
Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50% to SME lenders to support new short-term unsecured loans of up to $250,000 to SMEs with the aim to provide businesses with funding to meet cash flow needs, by further enhancing lenders willingness and ability to provide credit.
Quick and efficient access to credit for small business
The government is providing a temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers. This reform will help small businesses get access to credit quickly and efficiently.
Assistance for self-funded Retirees
Temporary reduction to superannuation minimum pensions
The minimum drawdown requirements for account based pensions will be reduced by 50% for the 2019-20 and 2020-21 financial years. This will benefit retirees by reducing the need to sell investment assets to fund minimum drawdown requirements.
Assistance for Individuals
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. These payments will be tax free and will not affect Centrelink or veterans ’payments.
Doubling Jobseeker payment and extending to casual workers and sole traders
The government will temporarily double the Jobseeker payment, providing people with an additional $550 per fortnight.
The payment will be available to sole traders and casual workers, provided they meet income tests. The Government will waive asset tests and waiting periods to access the Jobseeker payment.
Payments to support households
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.
We will be contacting our business clients to discuss how these measures will assist you in your individual business however please don’t hesitate to contact us in the meantime if you have any queries or concerns.
Please see below links to our previous blogs in relation to the stimulus measures announced on 12th March 2020 as well as the ATO Administration Relief avaliable.