What a changed world we are living in as we all try to come to terms with the challenges arising from the current Coronavirus Pandemic, from protecting the health and safety of our family and friends, to the financial stresses on our businesses, employment and investments.
The following is a broad summary of the key announcements of the Federal Government’s stimulus package in response to the Coronavirus.
For Individuals:
A new six-month 'Coronavirus supplement' of $550 per fortnight will be paid to individuals who are currently eligible for certain income support payments, including the:
- Jobseeker Payment
- Youth Allowance, and
- Parenting Payment (Partnered & Single)
Tax-free / Tax Exempt payments of $750 to eligible recipients (economic support payments) to social security, veteran & other income support recipients and to eligible concession card holders who are residing in Australia & receiving an eligible Government payment, or hold an eligible concession card.
- The first $750 payment will be available to individuals who qualify, at any time from 12 March 2020 to 13 April 2020 (inclusive). This payment will be made automatically to eligible individuals from 31 March 2020.
- The second $750 payment will be available to individuals who qualify on 10 July 2020 (except for those receiving an income support payment that qualifies them to receive the $550 fortnightly Coronavirus supplement). This payment will be made automatically to eligible individuals from 13 July 2020
Early Access to Superannuation Benefits
Eligible individuals will be able to access through myGov (as a lump sum) up to $10,000 of their superannuation entitlements before 1 July 2020, and a further $10,000 from 1 July 2020 (subject to a six-month time frame).
- The individual is unemployed,
- The individual is eligible to receive the Jobseeker Payment, Youth Allowance, Parenting Payment, Special Benefit or Farm Household Allowance
- On or After 1 January 2020 either,
- the individual was made redundant; or
- the individuals working hours were reduced by at least 20%
- the business was suspended or there was a reduction in the business's turnover of at least 20%
For Businesses:
PAYG Withholding Reduction for Small & Medium Sized Business with a turnover of less than $50m in 2019 can receive a refundable credit of up to $100,000 and a minimum of $20,000 total payment over 2 stages.
- Stage 1: Commencing with the lodgment of activity statements from 28 April 2020, eligible employers that withhold PAYG tax on their employees’ salary and wages will receive a tax-free payment equal to 100% of the amount withheld, up to a maximum of $50,000. Eligible employers that pay salary and wages will receive a minimum (tax-free) payment of $10,000, even if they are not required to withhold PAYG tax.
- Stage 2: For employers that continue to be active, an additional (tax-free) payment will be available in respect of the June to October 2020 period, basically as follows:
- Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020, with each payment being equal to 50% of their total initial (or Stage 1) payment (up to a maximum of $50,000).
- Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 activity statement lodgements, with
each additional payment being equal to a quarter of their total initial (or Stage 1) payment (up to a maximum of $50,000).
Please Note: It should be noted that eligibility for the above payments is subject to a specific integrity rule that is designed to stamp out artificial or contrived arrangements that are implemented to obtain access to this measure.
Apprentices: Employers with less than 20 full-time employees, who retain an apprentice or trainee (who was in training with the employer as at 1 March 2020) may be entitled to Government funded wage subsidies equal to 50% of the apprentice’s or trainee’s wage paid during the nine months from 1 January 2020 to 30 September 2020.
(The maximum wage subsidy over the nine-month period will be $21,000 per eligible apprentice or trainee)
Increase in the Immediate Asset Write-Off Threshold from $30K to $150K for businesses with an aggregated turnover of less than $500 million until 30 June 2020.
JobKeeper Payment:
Eligible employers will be able to claim a subsidy of $1,500 per fortnight, per eligible employee, from 30 March 2020 (with payments commencing from the first week of May 2020), for a maximum period of six months
Eligible employers will receive the JobKeeper Payment for each eligible employee who was on the employer’s books on 1 March 2020 and continues to be engaged by that employer (including full-time, part-time, long-term casuals and stood down employees). Businesses can start to register their interest in applying for the JobKeeper payment from
30 March 2020, on the ATO’s website at www.ato.gov.au
Sole-Traders / Businesses without employeeswill need to provide an ABN for the business, nominate an individual to receive the JobKeeper payment and provide that individual’s Tax File Number, as well as provide a declaration on the recent business activity (presumably, to demonstrate the downturn in the business). These businesses will also need to provide a monthly update to the ATO in order to declare their continued eligibility for the JobKeeper Payment
Employees will receive this payment basically as follows:
- If the employee ordinarily receives at least $1,500 in gross salary income per fortnight, they will continue to receive their regular income according to their prevailing workplace
arrangements. In this case, the JobKeeper Payment will effectively subsidise part or all of the employee’s gross fortnightly salary income. - If the employee ordinarily receives less than $1,500 in gross salary income per fortnight, their employer must pay the employee a minimum gross fortnightly salary income of $1,500 under the JobKeeper Payment scheme.
- If an employee has been stood down, their employer must pay the employee a minimum gross fortnightly salary income of $1,500 under the JobKeeper Payment scheme.
- If an employee was employed on 1 March 2020, has subsequently ceased employment with their employer, and then has been re-engaged by the same employer, the employee will receive a minimum gross fortnightly salary of $1,500 under the JobKeeper payment scheme.
I know things are tough out there at the moment, but stay safe and the world will prevail ...