Australia’s economic response to the Coronavirus
On the 12/03/2020, the government announced an “Economic Response” to the continuing Coronavirus outbreak. These have since been enhanced.
These measures are likely to be available to many of our clients, both individual and in business.
A summary of the measures, which are to be introduced into Parliament for consideration and passage in the last sitting day in March 2020, are summarized below:
Cash flow assistance for businesses
PAYG withholding credits for employers
Helping small and medium-sized businesses cover the costs of employee wages and salaries (100 per cent of PAYG withheld, with a minimum $20,000 payment and up to a cap of $100,000 over 6 months).
Under this scheme employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000.
An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the total of the amount they receive in payment one above.
When – Covers amounts withheld between 1 January 2020 – 30 June 2020
Eligibility – Rebate 1 (Paid in April-July):
- The payment will be delivered by the ATO as an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.
- Eligible employers that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000.
- Eligible employers that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax.
- The payments will only be available to active eligible employers established prior to 12 March 2020. However, charities which are registered with the Australian Charities and Not-for-profits Commission will be eligible regardless of when they were registered, subject to meeting other eligibility requirements. This recognises that new charities may be established in response to the Coronavirus pandemic.
Eligibility – Rebate 2 (Paid July-October):
To qualify for the additional payment, the entity must continue to be active.
Timing & How:
For monthly activity statement lodgers, the additional payment will be delivered as automatic credits in the activity statement system.
The first credit will appear after lodgement of the March activity statement at a rate of 300 per cent of the March PAYG withheld. Credits will then be applied at a rate of 100 per cent of the PAYG withheld in the months following up the June, until the $50,000 limit is reached.
Then, the second payment will begin being applied apon lodgement of the June, July, August & September activity statements at a rate of 25% of the initial payments.
For example, if you were paid $50,000 as part of payment 1, you would receive $12,500 when you lodge June, July, August & September.
For quarterly activity statement lodgers the additional payments will be delivered as an automatic credit in the activity statement system.
The first credit will appear at a rate of 100% of the March quarter PAYG withheld, and then the same upon lodgement of the June activity statement, until the $50,000 limit is reached.
Then, the second round of payments will be credited at a rate of 50% of the total amount of payment one, upon lodgement of the June 2020 and September 2020 activity statements.
Supporting apprentices and trainees
Wage assistance to help small businesses to keep their apprentices and trainees.
Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020.
Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
When – 1 January 2020 – 30 September 2020. Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
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.
Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.
For more detailed information on how the federal government are supporting businesses, follow this link.
Payroll tax refunds
The Victorian government will provide full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million.
For more information on payroll tax refunds, please follow this link to the premiers media release.
Delivering support for business investment
Increasing the instant asset write-off
Lifting the threshold to $150,000 (from $30,000) — and making more businesses eligible to use it.
When – Immediately, until 30 June 2020.
Backing business investment
Offering businesses a time-limited incentive to invest, by accelerating depreciation deductions.
When – Immediately, until 30 June 2021
Income support for Individuals
The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months.
The income support payment categories eligible to receive the Coronavirus supplement are:
- Jobseeker Payment1 (and all payments progressively transitioning to JobSeeker Payment; those currently receiving Partner Allowance, Widow Allowance, Sickness Allowance and Wife Pension);
- Youth Allowance Jobseeker • Parenting Payment (Partnered and Single);
- Farm Household Allowance • Special Benefit recipients;
Anyone who is eligible for the Coronavirus supplement will receive the full rate of the supplement of $550 per fortnight.
For more information on support for individuals, please follow this link or contact Centrelink directly.
Stimulus payments to households
The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. Around half of those that benefit are pensioners. These payments will support households to manage the economic impact of the Coronavirus.
- The first payment (announced on 12 March 2020) will be available to people who are eligible payment recipients and concession card holders at any time from 12 March 2020 to 13 April 2020 inclusive.
- The second payment will be available to people who are eligible payment recipients and concession card holders on 10 July 2020.
When – From 31 March 2020
For more detailed information, please follow this link,
Assistance for severely affected regions
Financial support to help regions and communities most affected by the Coronavirus to recover.
When – As soon as practicable
More details to come as they are made available.