24 Mar COVID-19 Stimulus Packages
COVID-19 Stimulus Packages
Here is what we know so far…..
Cash Boost for Employers
The stimulus package that the federal government announced 2 weeks ago has been extended to 100% credit of PAYG withholding up to $50,000 for the activity statements of March 2020 to June 2020 followed by an additional maximum credit of $50,000 available for wages reported for the next quarter in activity statements lodged for July to September 2020, bringing the maximum available credits to $100,000.
Who is eligible?
If you are a business with a turnover of less than $50m (based on prior year turnover), and
- Currently employ workers and was already registered for PAYG withholding before 12 March 2020.
- The business must continue to be active during the period and lodge activity statements
What do I need to do to get the credit?
You need to lodge your activity statements as normal and report wages and any PAYG withholding and comply with Single Touch Payroll reporting requirements. The credit will be calculated by the ATO and automatically applied to your activity statement account. You will still be obligated to pay your GST liability as normal.
Please note that employers have an obligation to proportionately withhold tax using ATO-issued tax tables (Payroll software automatically calculates this for you). You cannot manipulate the amount of PAYG withholding to try and get more of a credit than you would otherwise be entitled to.
Eligible employers who pay wages but are not required to withhold tax due to low wage employees will receive a minimum of $10,000 in the first quarter, and a further $10,000 in the next quarter.
For employers that are on monthly reporting for wages, to make it fair and in line with those employers that report quarterly, the credit will be equal to 300% of the PAYG withholding reported in the March activity statement (up to the $50,000 cap).
Apprentices & Trainees
Further assistance is available for employing apprentices & trainees. This is a wage subsidy of 50% of their wages capped at $7,000 per trainee per quarter, up to $21,000 over 9 months.
The subsidy will be available to small 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 March 2020.
Registrations for the subsidy can be made from early April 2020. Final claims for payment must be lodged by 31 December 2020. For further information contact your Australian Apprenticeship Support Network (AASN) provider.
COVID-19: 50% Loan Guarantee Scheme
Under the Scheme announced by the Government in the second round of stimulus package, the Government will provide a guarantee of 50 per cent to eligible lenders for new unsecured loans to be used for working capital for small and medium sized business (SME).
SMEs with a turnover of up to $50 million will be eligible to receive these loans.
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.
Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.
The Government will encourage lenders to provide credit facilities to SMEs that only have to be drawn if needed. This will mean that the business will only incur interest on the amount of funds they draw down. If they do not draw down any funds from the facility, no interest will be charged, but they will retain the flexibility to draw down in the future should they need to.
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
We recommend you contact your bank for further details of this scheme.
Early access to Super
If you are in financial stress as a result of coronavirus you may be able to access up to $10,000 of your superannuation in 2019-20 and a further $10,000 in 2020-21.
You apply directly to the ATO through the myGov website and can apply for early access from mid-April 2020
For any further information contact your superfund of financial advisor.
Other assistance measures
Eligible income support recipients will receive a temporary Coronavirus Supplement of $550 a fortnight from 27 April on top of their usual payments for up to 6 months.
The Government has also extended the eligibility and qualification criteria for 6 months to extend the access to the Jobseekers Allowance and Youth Allowance for sole traders and self-employed people who find that their business is affected by the virus and will waive the assets test and normal waiting period.
In the days and weeks to come, we expect further announcements from the Government and more stimulus packages to be announced. We will keep you informed of any changes as soon as we know the details.