Along with the first stimulus package, the Government announced, on Sunday, 22 March 2020, an additional $66b in COVID-19 economic support.
It was also made clear that many businesses will not survive the crisis and a third round of economic measures has been flagged in the weeks or months to come.
Options available to assist businesses impacted by COVID-19 include:
- Deferring by up to six months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
- Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
- Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
- Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
- Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.
If you are a Landlord and your tenant cannot pay the rent (or all of the rent) then we can apply to the ATO to put in an income tax withholding variation (ITWV) form which will allow you to receive your refund each pay cycle instead of the anticipated refund at the end of the year.
Support for Businesses
1. Boosting cash flow for employers
An increase from the first package, small and medium business and not-for-profit (including charities) employers with aggregated annual turnovers of under $50m will be eligible for tax-free payments of up to $100,000 per employer. The first payment (capped at $50,000) will be made after 28th April and the second payment (also capped at $50,000) after 28 July 2020. See FACT SHEET
SMEs with aggregated annual turnovers of under $50m employers will now receive two payments equal to 100 per cent of their PAYG withheld on salary and wages with each maximum payment increased from $25,000 under the first package) to $50,000, for a total maximum payment of $100,000.
Eligible businesses that pay salary and wages but are not required to withhold tax will also receive a minimum payment of $20,000, (up from $2000 in the first package.)
The payment will be available from 28 April 2020 and, as stated in the previous stimulus update, this will be paid as A CREDIT TO THE BUSINESS UPON LODGEMENT OF THEIR ACTIVITY STATEMENTS AND WILL APPLY AUTOMATICALLY.
2. Coronavirus SME Guarantee Scheme
To help support the cash flow of small and medium sized businesses (those with turnover up to $50 million), the Government is proposing to guarantee up to $40 billion of new lending by the Banks, along with providing concessional terms. See FACT SHEET
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 borrowers to not have to provide assets as security
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
In order to speed up the rate at which banks can deploy loans to businesses, the Government has also proposed an exemption from responsible lending obligations for lenders providing credit to existing small business customers.
3. Providing temporary relief for Financially Distressed Businesses
On 23 March 2020, the Government passed legislation providing temporary relief for directors from personal liability for trading while insolvent. Directors have been given 6 months of relief from their duty to prevent insolvent trading.
This is to give companies the confidence to trade through the current crisis, with the aim of returning to viability once it has passed. The relief only relates to debts incurred in the ordinary course of business i.e. debts that are necessary to facilitate the continuation of the business during the 6-month period, including new borrowings. It does not remove the requirement to repay the debts.
4. Payroll tax relief 2019/20
Eligible employers will not be required to make payroll tax payments in NSW for the months of March, April and May 2020.
Eligible employers will still be required to report wages paid during those months in their annual reconciliation.
Additionally, the 2019/20 financial year payroll tax liability will be reduced by 25%. The reduction in the liability will be received when the annual reconciliation for the year is lodged, which is due on 28 July 2020.
The NSW Government has also announced the payroll tax free threshold will increase to $1,000,000 with effect from 1 July 2020.
1. Income support for individuals
The Government has proposed to expand the eligibility to receive certain income support payments, such as, Job Seeker, Youth Allowance, Parenting Payment, Farm Household Allowance and Special Benefit payments. In addition, a new time-limited Coronavirus supplement will be established and paid at a rate of $550 per fortnight, on top of the income support payments mentioned above. These measures will be in place for six months.
Accelerated claim process: To ensure timely access to payments, new applicants are encouraged to claim through on-line and mobile channels. If applicants do not have internet access, they can claim over the phone.
The Coronavirus Supplement and expanded access for all payments will only commence from 27 April 2020.
2. Payments to support households
A further $750 payment for those receiving income support or holding a concession card, except for those who are receiving an income support payment that is eligible to receive the coronavirus supplement. This second payment will be made automatically from 13 July 2020. See FACT SHEET
3. Coronavirus Supplement
Temporary eligibility expansion to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. See FACT SHEET
This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
The Coronavirus supplement will be paid for the next 6 months. Eligible income support recipients will receive the full amount of the $550 Coronavirus supplement on top of their payment each fortnight.
1. Temporary early release of superannuation
From April, individuals will be able to have early access to their superannuation, capped at $10,000 this financial year and a further $10,000 next financial year. The withdrawals will be tax-free and will be made available to those eligible for the coronavirus supplement as well as sole traders who have seen that hours of work, or income fall, 20% of more as a result of the coronavirus. See FACT SHEET
Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
2. Temporarily reducing superannuation minimum drawdown rates
The Government is proposing to temporarily reduce the superannuation minimum drawdown requirements for account-based pensions by 50% for the 2019-20 and 2020-21 income years.
This measure will benefit retirees by reducing the need to sell investment assets at a time where the market has had a significant downturn. See FACT SHEET
Please note that these measures have not been legislated, however the Government has advised Bills for both stimulus packages will be put forward to Parliament shortly, with a hope of having them expedited through.