When one thinks… “this is the year I will see change” we could never have anticipated just how true that would be.
We have heard the word “unprecedented” a lot. There isn’t really any other word suitable to explain what we just don’t know. Experts across the world are giving their best guess, which is evolving faster than we can put pen to paper.
This is our live post that we will update as Australia issues new tax policies. Policies are changing more rapidly that we can type, so please check the date of the latest update:
Last updated 15th April 2020.
If you want information on medical advice head over to the Government Health Website .
With the Coronavirus situation changing hourly, the Government had to ramp up the first stimulus Package. This document will include the relevant components of round 1 but updated to include the changes made since then.
Table of Contents
Federal Government Stimulus
JobKeeper Payment
The JobKeeper payment is a Reimbursement type payment and will be paid monthly in Arrears by the ATO.
The first payments to eligible employers will commence in the first week of May 2020.
If you have not already registered for Single Touch Payroll we recommend that you do so to speed up the claim process.
Employees receiving less than $1,500 per fortnight (before tax), will need to have their wages ‘topped up’ to the $1,500 amount.
The JobKeeper payment is open to eligible employers to enable them to pay their eligible employee’s salary or wages of at least $1,500 (before tax) per fortnight.
Eligible employers will be reimbursed a fixed amount of $1,500 per fortnight for each eligible employee.
It will be up to the Employer if they will pay superannuation on the additional top up of the employees wages.
IMPORTANT INFORMATION
- Register your interest here as an employer below.
- Eligible Employers must:
- Have had a drop in Turnover by 30% relative to a comparable period a year ago (of at least a month).
- Eligible Employees must:
- have been employed as at 01st March 2020
- still be employed (Employees stood down OK)
- be Full Time or Part time or Casual more than 12 months.
- be over 16 years old
- be an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder
- not already be receiving a JobKeeper Payment from another employer.
- Business without employees (Sole Traders, Self Employed) are also eligible. They will need to nominate an ABN for their Business, and payments will be made directly to their personal account.
Find out More information
ATO has some great information on their website.
https://www.ato.gov.au/General/JobKeeper-Payment/
Employee Nomination Forms
Employees must be nominated on the appropriate form before your register for the JobKeeper Payment. This form does not need to be lodged, but must be completed by both the Employer and Employee and kept with your employee records.
This form is not for Sole Traders. More information to come soon in relation to Self-Employed.
Cash Flow Boost for Employers
Real cold hard cash back for Employers who pay staff. Up to $100,000 (in total) to eligible small business employers and not-for-profit organisations. The minimum amount payable to any eligible business is $20,000.
A Small business is deemed to be a business with turnover less than $50 million.
IMPORTANT INFORMATION:
- This payment is paid initially into your ATO integrated client account. If you currently have a debt with the ATO (for the eligible organisation), our understanding is that this will be allocated to that debt first. You will only receive a physical cash refund once the ATO debt has been extinguished.
- This Boost is allocated over 2 Tranches ( as explained below). The dates relevant to you for payment are dependent on whether you report your BAS Quarterly or Monthly.
- This payment will be tax free.
- Employers must be established before 12th March 2020.
| Payment Period | Calculation Period | Calculation Method | Benefit |
| Payment 1 | 1 Jan 2020 – 30 June 2020 | 100% of PAYGW | Capped at $50,000 for the period, with a minimum of $10,000 |
| Additional Payment (Payment 2) | 30 June 2020 – 30 September 2020 | Calculated as the total benefit per Payment 1, with cash paid over the BAS/IAS lodgement period between 30 June 2020 and 30 September 2020 | Capped at $50,000 for the period, with a minimum of $10,000 |
Stage 1 Payment (Period 01 January – 30 June 2020)
| Stage 1 Payment | ||
|---|---|---|
| Frequency | Period | Payment Date |
| Quarterly | Quarter 3 (Jan – Mar) | 28 April 2020 |
| Quarter 4 (Apr- Jun) | 28 July 2020 | |
| Monthly | March 2020 | 21 April 2020 |
| April-20 | 21 May 2020 | |
| May 2020 | 21 June 2020 | |
| June-20 | 21 July 2020 |
Stage 2 Payment (Period 01 July – 30 September 2020)
| Stage 2 Payment | ||
|---|---|---|
| Frequency | Eligible Period | Payment Date |
| Quarterly | Quarter 4 (Apr – Jun) | 28 July 2020 |
| Quarter 1 (Jul – Sep) | 28 October 2020 | |
| Monthly | June 2020 | 21 July 2020 |
| July 2020 | 21 August 2020 | |
| August 2020 | 21 September 2020 | |
| September 2020 | 21 October 2020 |
How do you apply?
This payment will automatically be processed upon lodgement of your Monthly or Quarterly Business Activity Statement.
To estimate your payments yourself download this calculator. (Note we have already sent an estimate to most of our clients already)
Subsidy on Apprentice Wages
Employers with less than 20 full-time employees who retains an employee that was employed as at 01st March 2020 may be entitled to Government funded wage subsidies equal to 50% of the apprentice or trainees wage during the nine months from 01 January 2020 to 30 September 2020.
The maximum wage subsidy will be $21,000 per eligible apprentice or trainee.
How do you apply?
Employers can register from early April 2020.
Tax Incentive for Small Business
- The instant asset write off threshold has been increased from $30,000 to $150,000 for all eligible assets purchased from 12th March to 30th June 2020.
- Assets exceeding $150,000 will attract an additional 50% depreciation rate for the next 15 Months until 30 June 2021
Important:
- This is not a Cash Back incentive. This is accelerated depreciation only. If you are not in a Tax Paying Position with your busines, then this will have no immediate affect for you, and may actually worsen your cash flow. You need to spend the money to get the tax deduction.
- You should speak to us before you make any large business investment purchases.
How do you apply?
This will processed only when you complete your year end Tax work. No immediate benefit is available.
Tax Deferral Payments – ATO Obligations
The ATO are allowing a couple of option in relation to your Debt obligations for those directly impacted by Coronavirus.
- Deferral of up to 4 months on the payment due date of amounts due on your Integrated Client Account (BAS Lodgements)
- Ability to change reporting cycle from Quarterly to Monthly
- Allowing Businesses to vary PAYG instalments to zero for the March Quarter without penalty. Businesses are also able to claim back previously lodged September and December Instalments in the March BAS
- Remitting ATO Interest Penalties incurred from 23rd January 2020.
- Working with affected businesses to help them pay their existing and ongoing tax liabilities.
Important
How do you apply?
This will not be applied automatically. You need to communicate with the ATO or our office to get access to the deferral.
Speak directly to the ATO on 13 11 42 or the Emergency Hotline on 1800 806 218
Contact our office to negotiate with the ATO on your behalf.
Government backed Loans with Banks
- The Government is providing a guarantee to banks and Small business lenders to reduce the Banks risk to provide unsecured loans that need the cash for working capital.
- The maximum amount that can be loaned is $250,000
- No repayment for the first 6 months. (Interest will accrue from draw down date)
- These loans will be called Better Business Loans and are available directly through your bank.
How do you apply?
Speak to your Bank as your Bank will issue these loans. (For comparative purposes I was quoted an interest rate of 4.5%)
State Government Stimulus
Queensland
Interest Free State Government Loans
- The QLD Government will offer $500m in loans to eligible businesses to retain employees and maintain operations. Details are:
- Loans up to $250,000
- First 12 months interest free
- Currently taking expressions of interest before rolling the concessional loans out
How to apply?
Payroll Tax Concessions
IMPORTANT: This is NOT PAYGW. If you are not a small business with Payroll Withholding of More than $750,000 then this does not apply to you!
If you are a grouped employer who pays $6.5 million or less in Australian taxable wages, you may receive an email about a:
- refund of your payroll tax for 2 months
- payroll tax holiday (i.e. no payroll tax to be paid) for 3 months.
You can also apply for a deferral of payroll tax for the 2020 calendar year.
New South Wales
Payroll Tax Concessions
IMPORTANT: This is NOT PAYGW. If you are not a small business with Payroll Withholding of More than $750,000 then this does not apply to you!
For businesses whose total grouped Australian wages for the 2019/20 financial year is less than $10M:
- will have their annual tax liability reduced by 25% when they lodge their annual reconciliation.
- For those clients who lodge and pay monthly : No payment required for the months of March, April or May 2020
- When lodging your annual reconciliation, you will still need to provide wage details paid in these months and will receive the benefit of a 25% reduction in the amount of tax you would have had to pay for 2019-20.
Northern Territory
Business Improvement Grant
All Territory businesses will be able to access a $10,000 grant, followed by an additional $10,000 grant if they contribute $10,000 of their own.
- Each business is only eligible to receive one grant, and it can be used to complete one or two different jobs on their premises.
- The grant can be used to purchase goods and services to make permanent physical improvements to a business (land and / or building) that help improve its efficiency and customer experience.
- Registrations for businesses to provide services open 30 March 2020. Businesses can apply for a grant from 13 April 2020.
Payroll Tax Concessions
- The payroll tax exemption for hiring Territory employees has been extended to 30 June 2021.
- For more information on eligibility for employers, go to the Department of Treasury and Finance website.
Victoria
This state has not been reviewed due to us not servicing this area. Please check with your local state government website for any State Government Incentives.
Western Australia
This state has not been reviewed due to us not servicing this area. Please check with your local state government website for any State Government Incentives.
Tasmania
This state has not been reviewed due to us not servicing this area. Please check with your local state government website for any State Government Incentives.
Commercial Sector- Banks and Lending Institutions
Check with your Bank for Bank specific support- Click the links below
Commonwealth Bank
ANZ
NAB
Westpac
Bendigo
Individuals
Coronavirus Supplement
Currently the New start Allowance or Job seeker Allowance is $550 per fortnight. The Government is increasing this allowance by an additional $550 supplement per fortnight temporarily. To make this more easily accessible to people that have recently lost their jobs the government has:
- Reduced Waiting Times – Normally 1 week waiting period has been removed.
- Faster Claims Process (From April 2020)
- Streamlined application process- Removal of Separation Certificates, appointments and Job Readiness
- Reduced Means Testing- Meaning more people will be eligible.
This payment is available to permanent employees (stood down), Sole Traders, self-employed, casual and contract workers.
This supplement will also apply to individuals already receiving allowances including Job seeker, New start and Parenting Payment (Partnered & Single).
This payment will be available from 27th April 2020.
IMPORTANT
New information has come from Centrelink as to eligibility. You may be entitled to the Coronavirus Supplement separately (and not entitled to the Job Seeker allowance). This will mean you only receive $550 per fortnight. The current threshold for this is earning. You must be earning Less than $1,075 per fortnight.
You will be entitled to the Job Seeker allowance as well, so long as your partner does not earn more than $1,850 per fortnight ($48,100 per year).
There are no Assets test on these allowance at this time.
The Prime Minister also announced changes to the income test for people on the Job Seeker payment, meaning their partners could earn almost $80,000 a year before they were ineligible for the payment.
Human Services Website – Job seekers
Household Payments – 2 payments
Eligible recipients will receive a payment of $750 automatically from 31st March 2020.
To be eligible for the first payment you must be a social security, veteran or other income support recipient.
To be eligible for the second payment, you must have qualified for the first payment and not be receiving the Coronavirus supplement. The second payment will be paid automatically from 13th July 2020.
Early Access to Superannuation
The Government will introduce a temporary early access to Superannuation for affected individuals. This is applicable only if one or more of the below requirements are satisfied
- The individual is unemployed; or
- The individual is eligible to receive a Job seeker payment, youth allowance or parenting payment; or
- On or after 1 January 2020
- You were made redundant; or
- Your working hours reduced by 20% or more; or
- You are a sole trader and your business has been suspended (or reduction in income of 20% or more).
This amount is a tax free payment with a maximum amount of $10,000 for the 2019-2020 Financial Year. A further $10,000 is available from 01 July 2020.
This will be available for application from mid April 2020
How do you apply?
Applications should be made directly through your MyGov Account,
More information can be obtained direct from the ATO Website: www.ato.gov.au
Reduction in Minimum Pension Draw down
Temporary reduction to the minimum pension payment required for retirees to take from their superannuation fund. This will allow them to keep funds inside their superannuation environment as it may be unfavourable to cash in assets to fund pension payments.
The Reduction applies to the 2019/2020 and the 2020/2021 Financial Years.
Sources
- https://treasury.gov.au/coronavirus
- https://www.notion.so/Business-and-Government-concessions-COVID-19-response-6ef8ed3b1b0d4006a07d219eb6581e69#d79221d6d2b34d1b979c213331c4e48f
- National Tax & Accountants Ltd
Latest Government Stimulus
The Government have announced a 3rd Stimulus to come. We are still awaiting on official details, however the latest news report has indicated that the latest package amounts to $130 billion in the form of Wage Subsidies
Businesses (Employers) will receive a fortnightly wage subsidy up to $1,500 per employee as part of a Federal Government bid to prevent millions of people from losing their jobs to the Coronavirus pandemic.