We hope all our clients are feeling well and taking precautions as recommended by the Australian Government. We know many of our clients will be impacted in many ways by the Coronavirus situation.
We provide this summary of the proposed assistance packages for your information. This includes all measures announced on 12th March 2020 and 22nd March 2020.
Individuals currently receiving Government benefits will receive a one off $750 Economic Support Payment. Those receiving a social security, veteran or other income support recipients and eligible concession card holders will receive the payment. The list of eligible payments has been extended from the first announcement. For a full list of included recipients: https://www.servicesaustralia.gov.au/individuals/news/750-one-economic-support-payment. The payment will be tax free and not count towards any income tests for Government benefits. The payment will be made automatically between 31st March and 17th April 2020.
Centrelink has also announced that Ordinary Waiting Periods have been waived since 12th March as well as obligations to seek employment for anyone applying for new payments. Asset testing will be waived from 27 April for 6 months, except for Farm Household Allowance and Special Benefit.
The eligibility for Jobseeker payment and Youth Allowance for job seekers has been expanded. This will mean that the following will now be covered:
- permanent employees who have been stood down or lost job,
- sole traders, self-employed, casual or contract workers
- those caring for someone who’s affected by coronavirus
Form 27th April 2020, there will now be a temporary Coronavirus supplement of $550 per fortnight on top of the normal payment rate for the following payments:
- JobSeeker payment (formerly NewStart allowance)
- Youth allowance for job seekers
- Parenting payment
- Farm Household Allowance
- Special Benefit
The supplement will be paid automatically if you are receiving an eligible payment.
If you do not qualify for the Coronavirus supplement, a second $750 payment will be made from 13th July 2020 if you’re getting an eligible payment or have an eligible concession card on 10th July 2020.
Centrelink have also provided for Crisis payments (equal to one week’s payment) available to anyone receiving an income support payment if they need to self-isolate or in severe financial hardship. This is not automatic and needs to be applied for.
Please note, if you are entitled to sick leave or annual leave from an employer, or income protection, you can’t access these at the same time as the JobSeeker payment or Youth Allowance for job seekers.
Small Business Package
Increasing the Instant Asset Write-off
The instant asset write off will be increased from $30,000 to $150,000 and expanded to include businesses with annual turnover of up to $500 million. This will be effective from the 12th of March 2020 until the 30th June 2020.
Backing Business Investment
Businesses with turnover over $500 million will be able to deduct 50% of the cost of an eligible asset on installation for a period of 15 months, ending 30 June 2021.
All small and medium business with annual turnover under $50 million and not for profit organisations registered with Australian Charities and Not-for-Profits Commission (ACNC) who employ workers will be eligible for tax free payments. These payments will be provided as a credit based on the PAYG Withholding (PAYGW) amount declared on the Business Activity Statements. There will be a minimum payment of $20,000 and maximum of $100,000. This is an increase from the announcement on 12th March 2020.
To qualify for the payments, the business must have been registered for PAYGW prior to 12th March 2020 and the business must continue to pay employees. Charities are exempt from the PAYGW registration date as the Government recognises new charities may need to be set up to deal with this situation.
The payments will be delivered by the ATO as a credit to the business upon lodgement of their activity statements from 28 April 2020. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.
For quarterly BAS lodgers, the amount will now be equal to 100% of their PAYGW declared in their Business Activity Statements for Qtr 3 2020 (Jan-Mar) up to $50,000. The Qtr 4 2020 (Apr-Jun) and Qtr 1 2021 (Jul-Sep) will then receive a credit of 50% of the amount received in the Mar BAS. Any employers who declare wages but has no PAYGW will receive a credit of $10,000 in the Mar BAS and an additional credit of $10,000 in the Jun BAS.
For monthly BAS lodgers the amount will be equal to 300% of the March activity statement, 50% of PAYGW in April and May BASs up to a maximum of $50,000 combined for these BASs. The total amount received for those BASs will be called the initial Boosting Cash Flow. Then there will be an additional credit of 25% of the initial Boosting Cash Flow amount in the Jun, Aug and Sep activity statements up to $50,000 combined.
Employers of Apprentices and Trainees
The Government will pay eligible businesses a wage subsidy of up to 50% of wages for apprentices and trainees for up to 9 months up to $7,000 per quarter per apprentice or trainee. This provided wage assistance up to $21,000 per eligible apprentice or trainee. The period of eligibility will be 1 January 2020 – 30 September 2020.
Where a small business is not able to retain an eligible apprentice, the subsidy will be available to the new employer. Support will be provided by the National Apprentice Employment Network to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.
Support for severely affected regions
The Government has set aside $1 billion to support regions that have been disproportionately affected by the economic impacts of the coronavirus, including those heavily reliant on industries such a tourism, agriculture and education.
They will be waving fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park. They will also waive entry fees for Commonwealth National Parks.
There will be financial assistance to help businesses identify alternative export markets or supply chains. There will also be targeted measures to further promote domestic tourism.
Australia Tax Office assistance
The ATO will be providing administrative relief for some tax obligations for people and business affected by the Coronavirus, on a case-by-case basis. This includes payment deferrals for up to 6 months, considering remitting all interest and penalties incurred after 23rd January 2020, and offering low interest payment plans.
Please note, the superannuation guarantee for all employees must still be lodged and paid on time. There is no variation or extension of the due date available.
For more information on the above packages visit www.treasury.gov.au/coronavirus
We will be considering all assistance packages and how they apply to each client as soon as they become legislation. However, in the meantime, if you would like to discuss any of these assistance packages, please contact our office.
State Revenue Office Relief Measures
The State Revenue Office (SRO) has announced a number of measures to assist business is Victoria.
Businesses with annual taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived. The businesses must continue with the lodgement but do not need to make further payments for this financial year.
The SRO will contact directly eligible businesses in relation to reimbursement for the payroll tax already paid during the financial year.
Liquor licence fees
Business that have paid for a renewable liquor licence fee for 2020 will be reimbursed that fee and those yet to pay will have the fee waived. The SRO will automatically administer the reimbursement, regardless of whether the licence fee was paid to it or the Victorian Commission for Gaming and Liquor Regulation.
Land owners due to pay 2020 land tax that have at least one non-residential property and a total taxable landholdings below $1 million will have the option of deferring their 2020 land tax payment until after 31st December 2020. SRO will contact eligible land owners.
The Australia Banking Association has announced that all participating banks will be offering assistance which could include:
- Deferring loan payments
- Waiving fees and charges
- Helping with debt consolidations
- Waiving penalties for early withdrawal of a term deposit
- Deferring upcoming credit card payments
- Increasing emergency limits on credit cards
Please contact your bank to discuss these options.
Support for Retirees
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50% for the 2019-2020 and 2020-2021 income years.
This will benefit retirees with account-based pensions and similar products by reducing the need to sell investment assets to fund minimum drawdown requirements.
The reduced rates are as follows:
|Age||Default minimum drawdown rates (%)||Reduces rates by 50% for the 2019-20 and 2020-21 income years (%)|
|95 or more||14||7|
Changes to Social Security Deeming Rates
Effective 1st May 2020, the upper deeming rate will be 2.25% and the lower deeming rate will be 0.25%. These reductions reflect the low interest rate environment and its effect on the income from savings.
This change will benefit around 900,000 income support recipients, including around 565,000 people who receive the Age Pension who will, on average receive around $105 from the Age Pension in the first full year that the reduced rates apply.
Eligible individuals will be able to apply to access up to $10,000 of their superannuation before 1st July 2020. They will also be able to access up to a further $10,000 from 1st July 2020 for approximately 3 months, depending on passage of legislation).
Eligibility criteria applies so please contact your superannuation fund for more information.
Spinell’s Coronavirus Response
We will be reducing the physical risks by making contact with clients via telephone calls and emails and holding appointments via telephone calls and teleconferences where possible.
Each staff member will be deciding individually to continue working at the office, or commence working from home. However, please be assured that we will continue working and all calls and emails will be responded to. Our office number may be diverted to a mobile but we will still answer your calls. Our response time may be delayed due to the volume of contact we expect but we will be continue to work and will get back to you as soon as we can.
SPINELL ACCOUNTING GROUP PTY LTD