COVID-19 GOVERNMENT STIMULUS PACKAGE - March 2020 - Accru Melbourne
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COVID-19 GOVERNMENT
STIMULUS PACKAGE
March 2020
KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Table of Contents
Resources & Timing 2
Executive Summary 3
Payroll Related Measures 6
Boosting Cash Flow (PAYG Subsidy) 6
JobKeeper Payment 8
Apprentices & Trainees 12
Example from Treasury Payroll Taxes 12
Employment issues 16
Business Related Measures 18
Victorian Business Grants 18
Banking 19
Small business asset write-off 20
Accelerated depreciation claims 20
ATO admin measures 21
Insolvency measures 21
Leases & Tenancy 21
Information for sole traders 22
Household Measures 23
Superannuation Pension Relief 23
Early access to Superannuation 24
Centerlink Payments 25
Page 1 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Resources & Timing
Source websites:
https://www.australia.gov.au/
https://treasury.gov.au/coronavirus
https://www.business.gov.au/
https://www.business.vic.gov.au/disputes-disasters-and-succession-planning/illness-and-business-
management-plan/coronavirus-business-support
https://preview.nsw.gov.au/covid-19/financial-support
https://www.covid19.qld.gov.au/
https://nt.gov.au/news/2020/economic-stimulus
https://www.wa.gov.au/organisation/department-of-the-premier-and-cabinet/covid-19-coronavirus-
western-australian-government-response
https://www.business-sa.com/covid19
https://www.business.tas.gov.au/coronavirus_information
Accru Melbourne articles online:
https://accrumelb.com.au/covid-19-coronavirus-economic-response/
https://accrumelb.com.au/covid-19-business-implications/
https://accrumelb.com.au/mental-health-coronavirus/
https://accrumelb.com.au/coronavirus-economic-response-2/
https://accrumelb.com.au/coronavirus-job-keeper-payment/
Timing of assistance (Treasury factsheet)
Page 2 of 26Executive Summary
RELIEF ELIGIBILTY AMOUNT HOW LINKS
Total for businesses with Minimum $20,000 over 3 Automatic process, credited
PAYG Subsidy Treasury Summary
turnover less than $50M quarters. Capped at $100,000 to the BAS account
No interest or penalties to
variations of March tax
Contact the ATO to negotiate BAS lodgement or contact the
PAYG Instalments instalments, which includes ATO Summary
liability deferral ATO
claiming refunds for
September and December.
Small businesses employing Apply for 50% payment of
Trainee & Apprentice fewer than 20. wages capped at $7,000 per Requires application be done Further details & application
Subsidy Employee was working at 1 employee for 3 quarters, so by employer link
March 2020 $21,000 in total
Businesses with turnover less
than $500M Assets up to $150,000 to 30
50% write off assets installed June 2020. Limit currently Through tax return
Asset Write-Off Treasury Summary
by 30 June 2021. reverts to $1,000 at 1 July lodgement
Must be a new asset, not 2020
second hand.
Government is guaranteeing
50% of unsecured loans
Small and medium
made by SME lenders to Contact financial institution Business.gov summary on
Banking & Liquidity enterprises
support short-term unsecured directly Scheme
Up to $50M turnover
loans
Up to $250,000
No application, relief
Temporary increase in thresholds and time limits in relation to
Insolvency measures will apply after 6 Business.gov summary
creditor statutory demands and bankruptcy initiations.
monthsKEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Temporary relief from directors personal liability while trading
insolvent
Links for each state are below
VIC: Request refund on PTX,
VIC: Payroll of less than $3M VIC: Full refund of FY2020
still required to lodge monthly
Payroll Tax for FY2020. liability. Greenwoods have created a
returns.
Differs for all states Differs for all states good summary
Differs for all states
Retires with account-based 50% minimum drawdown for Treasury info on retirees
Apply to the super fund
pensions FY2020 and FY2021 support
Superannuation Up to $20,000
Individuals with financial
$10,000 FY2020 and Apply through the ATO Treasury Info on early access
stress due to Coronavirus
$10,000 FY21
Between $550-$750
Holders of various types of depending on the type of Through Centrelink Centrelink - details and links
Household Support
social security social security. applications for application
Two payments
PAYG subsidy – minimum $20,000 over 3 quarters, capped at $100,000 in total for businesses with a turnover less than $50M. Turnover is aggregated, so
essentially applies to Base Rate Entities and Not-for-Profits (NFPs) of the same size. This is an automatic process, with a credit to BAS account.
PAYG Instalments – The ATO has stated that they will not be applying interest and penalties to variations of March tax instalments, which includes
claiming refunds for September and December. This means the ATO would essentially be providing short term funding, as the underlying tax obligation at
the end of the year will still be payable.
Trainee and apprentice subsidy – Apply for 50% payment of wages capped at $7,000 per employee for 3 quarters, so $21,000 in total. Requires
application to be done by the employer and employee must have been working at 1 March 2020.
Asset write-off for businesses with a turnover less than $500M:
1. Assets up to $150,000 to 30 June 2020. Limit currently reverts to $1,000 at 1 July 2020.
2. 50% write off assets installed by 30 June 2021. Must be a new asset, not second hand.
Banking and liquidity – Government is guaranteeing 50% of unsecured loans made by SME lenders to support short-term unsecured loans. Temporary
exemption from responsible lending obligations for providing credit to small businesses. The RBA are putting downward pressure on borrowing costs for
households and businesses. The Big 4 banks are offering lower rates and deferrals.
Page 4 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Insolvency – Temporary increase in thresholds and time limits in relation to creditor statutory demands and bankruptcy initiations. Temporary relief from
director’s personal liability while trading insolvent.
VIC payroll tax - Full refund of payroll tax for FY2020 for payroll less than $3M. Defer payroll tax obligations for first 3 months of FY2021 until January
2021. Still need to lodge returns and annual rec still required.
VIC other – Rent relief for tenants in Government buildings, waiver of liquor licence fees, land tax deferrals for small businesses, $500M business support
fund, $500M working for Vic Fund.
QLD payroll tax – May get a relief package, which is deferral of lodgements. Need to continue lodging returns without paying them.
NSW payroll tax – Wage threshold increase $1m for FY21. Annual lodgement liability reduced by 25% where wages are less than $10M. Monthly wages
for less than $10M have no payment required for March, April or May 2020.
Superannuation
1. Reduction in minimum pension by 50% for FY2020 and FY2021.
2. Temporary early release of $10,000 for FY2020 and FY2021 for certain people. Generally made redundant or unemployed, or working hours reduced
by more than 20%.
Household support – various payments for people on social security who are looking for work or hold certain concession cards.
Page 5 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Payroll Related Measures
Boosting Cash Flow (PAYG Subsidy)
Small and Medium Businesses that employ workers including NFPs (turnover less than $50M):
Turnover is aggregated (which includes foreign parent companies), so it is essentially limited to Base
Rate Entities,
Tax free payment,
Will be delivered by the ATO via a credit on the portal,
In addition to turnover rules, this requires the employer to have been in business and had an ABN &
PAYG registrations in place at 12 March 2020,
Anti-avoidance integrity measures in place so the boost can be reclaimed if a scheme or contrived
circumstance occurs to either access or increase entitlement.
Payment is split into two;
First boost is a minimum of $10,000 and a maximum of $50,000 to cover PAYG withheld for
March & June quarters.
Second is paid July – October and matches the first. It is independent of what is actually
withheld.
Quarterly lodgement
March BAS - receive 100% of PAYG withholding, with minimum of $10,000 and a maximum of $50,000.
June BAS – receive either;
100% of June + March withholding less $10,000,
100% of June withholding if March was more than $10,000, up to $50,000 maximum; and
50% of first boost total.
September BAS – 50% of first boost total.
Examples – quarterly lodgement:
Who & What 1st Boost 2nd Boost
Business with one employee on $10,000 for March 2020 $5,000 for June 2020
wages earning less than $18,200 (paid in May 2020) (paid in July)
tax free threshold. PAYG withheld $5,000 for September
is $0 per quarter. (paid in October)
Total $10,000 Total $10,000
Business with employees that has $10,000 for March 2020 $6,000 for June 2020
PAYG withheld of $6,000 per $2,000 for June 2020 (paid in July) $6,000 for September 2020
quarter.
Total $12,000 (equals total Total $12,000 (equals total of first
withheld for March + June) boost)KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Monthly lodgement
March BAS – receive 300% of PAYG withheld, capped at $50,000
April – receive $50,000 cap, less March boost
May - receive $50,000 cap, less March + April boost
June - receive $50,000 cap, less March + April + May boost, plus 12.5% of first boost
July – 12.5% of first boost
August – 12.5% of first boost
September – 12.5% of first boost
Examples – monthly lodgement:
Who & What 1st Boost 2nd Boost
Business with multiple employees $25,500 for March 2020 $12,500 for June 2020
has PAYG withholding of $8,500 $8,500 for April 2020 $12,500 for July 2020
per month. $8,500 for May 2020 $12,500 for August 2020
$7,500 for June 2020 $12,500 for September 2020
Total $50,000 Total $50,000
Business with employees that has $12,000 for March 2020 $6,000 for June 2020
PAYG withheld of $4,000 per $4,000 for April 2020 $6,000 for July 2020
month. $4,000 for May 2020 $6,000 for August 2020
$4,000 for June 2020 $6,000 for September 2020
Total $24,000 Total $24,000
Integrity Measures
There are anti-avoidance integrity measures in place to prevent inappropriate access to either the boost itself,
or an increase in the boost amount beyond what would otherwise be paid.
The ATO has stated that artificial or contrived arrangements to maximase the cash flow boost may include:
Restructuring your business,
Changing the way you pay workers to fall within eligibility criteria,
Increasing wages, or PAYG withheld, paid in a particular month.
The ATO has also made the following statement:”Any sudden changes to the characterisation of payments may
cause us to investigate whether the payments are in fact wages. If the payments are wages, we may consider
the characterisation of past payments, including whether they should have been subject to PAYGW and whether
the super guarantee contributions should have been made. You may also have FBT obligations that have not
yet been met.”
Page 7 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
JobKeeper Payment
The main limitation for this, at time of writing, is that legislation and explanatory material has not
been written. Therefore, it is all based on Government announcements.
ELIGIBILITY
The business (including NFPs) has a turnover of less than $1B and turnover will be reduced by more
than 30% relative to a comparable period a year ago (of at least one month); or
If the turnover is more than $1B, reduction in turnover must be more than 50%.
Eligible employees must remain with the employer to receive the payment.
The payment is in arrears, so needs to be funded by the business first.
ELIGIBLE EMPLOYEES
Are currently employed by the eligible employer (including those stood down or re-hired);
Were employed by the employer at 1 March 2020;
Are full-time, part time, or long-term casuals (a casual employed on a regular basis for longer than 12
months as at 1 March 2020);
Are at least 16 years of age;
Are an Australian citizen, the holder of a permanent visa or a Special Category Visa Holder; and
Are not in receipt of a JobKeeper Payment from another employer.
OBLIGATIONS ON EMPLOYERS
Register with the ATO. Assess that they have or will experience 30%-50% turnover decline.
Provide information to the ATO on eligible employees;
Number engaged as at 1 March 2020,
Those currently employed, including stood down or rehired,
The ATO will pre-populate with STP where it can.
Ensure each eligible employee is paid at least $1,500 before tax per fortnight.
Notify all eligible employees they are receiving the payment.
Continue to report to ATO on monthly basis.
Need to notify employees if JobKeeper is being claimed.
APPLICATION & REPORTING PROCESS
With employees
Register interest via the ATO website from today (website, not portal).
Subsequently, fill out online application.
Must identify eligible employees and provide monthly updates to the ATO.
Ensure that eligible employees receive a minimum $1,500 per fortnight before tax.
Without employees
Register interest via the ATO website from today (website, not portal).
Provide an ABN for their business and nominate an individual to receive the payment.
Provide that individual’s TFN.
Page 8 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Provide a declaration relating to recent business activity.
Provide monthly updates to the ATO to declare their continued eligibility for the payment.
EMPLOYEE OBLIGATIONS
Employees with multiple employers must notify the one that is their primary employer.
If not an Australian citizen, must notify employer of visa status so they can determine eligibility.
If currently receiving an income support payment, they must notify Services Australia of their new
income.
Examples provided by Treasury
Page 9 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Page 10 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Page 11 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Apprentices & Trainees
Eligible employers can apply for wage subsidy of 50% of wages paid during 9 months of 1 January
2020 to 30 September 2020.
Reimbursement of a maximum of $21,000 per eligible trainee/apprentice ($7,000 per quarter).
Claimable for wages paid since 1 January 2020.
Eligibility
Fewer than 20 full-time employees who retain an apprentice or trainee,
Must have been training at 1 March 2020
Employers that re-engage out-of-trade apprentice or trainee will be eligible for subsidy
Able to access subsidy after assessment undertaken by Australian Apprenticeship Support
Network (AASN) provider.
Can register from early April 2020, must be lodged by 31 December 2020.
Example from Treasury
Page 12 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Payroll Taxes
Payroll tax summary at 25 March 2020:
State Payroll tax relief Applies to
ACT 6 month waiver or payroll tax from March 2020 – August 2020. Wages Australia wide
up to $10M can defer FY2021 payroll tax interest free to 1 July 2022. wages
NSW Bring forward increase in threshold to $1M from 1 July 2020. Deferral Australia wide
of payroll tax for payroll more than $10M for 6 months. Waiver of wages
payroll tax for wages up to $10M for last 3 months of FY2020.
These are presently only announced/proposed and not law.
NT Extension of payroll tax exemption for hiring Territory employees to 30 Australia wide
June 2021. wages
QLD Refund of payroll tax for 2 months, plus 3 month holiday for wages up Australia wide
to $6.5M. If wages exceed $6.5M defer 2020 payroll tax to 13 January wages
2021.
SA Waiver of payroll up to $4M for 6 months March 2020 – August 2020. Australia wide
Defer payroll tax for 6 months where wages exceed $4M on proof of wages
coronavirus impacting cash flow.
TAS Waiver of payroll tax for hospitality, tourism and seafood industries for Australia wide
all of FY2020. Other affected businesses with payroll up to $5M can wages
apply for a waiver for March 2020 – May 2020. Payroll tax rebate for 1
year if employ a person aged 24 and under between April 2020 and
December 2020.
VIC Payroll of less than $3M eligible for a full refund of payroll tax for Victorian wages
FY2020. Defer payroll tax for first 3 months of FY2021 until 1 January
2021.
WA If payroll $1M - $4M and pay payroll tax, receive a one-off grant of Australia wide
$17,500. Bring forward increase in threshold to $1M from 1 July 2020. wages
Details of each State as follows:
Victoria
Payroll Tax Waived
If Victorian taxable wages are $3M or less all payroll tax for FY2020 will be waived.
Refund available by logging onto the PTX portal:
1. Log in
2. Apply for refund
3. Amount to claim – this is the total of the monthly returns July - February
4. Dates – 1 July 2019 to now
5. Reason – amendment to liability
6. Reason details: COVID-19
7. Select ‘no’ to the next two options
8. The next page takes you to where you can enter the Electronic Transfer details
Returns must be continued to be lodged but no payment is required.
If Victorian wages exceed $3M, there is no relief available.
Queensland
$6.5M or less in Grouped Australian Wages
Refund of 2 months of payroll tax.
Payroll tax holiday (no payment required) for 3 months.
Ability to apply for payroll tax deferral for 2020 calendar year.
Apply for deferral through above link before 31 May 2020.
Email should be received, otherwise this form can be completed.
Page 13 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
More than $6.5M in Grouped Australian Wages
Need to be able to show you have been negatively affected - A business is directly or indirectly affected
by coronavirus if their current turnover, profit, customers, bookings, retail sales, supply contracts or other
factors are negatively affected compared with normal operating conditions.
Ability to apply for payroll tax deferral for 2020 calendar year.
Refund of your payroll tax for 2 months.
New South Wales
$10M or less in Grouped Australian Wages
Annual reconciliation will be reduced by 25% when they lodge.
For monthly payers, no payments required for March, April or May 2020.
3 month payment deferral available for annual reconciliation.
More than $10M in Grouped Australian Wages
Will have the option of deferring the payment of payroll tax for up to six months.
These businesses will not need to make their payment for the March period, normally due on 7 April
2020.
More information will be provided on the deferral arrangement in the upcoming days (written 1 April
2020).
Threshold Increase FY2021
Threshold increasing from $900,000 to $1M.
Western Australia
Grant Payment
One-off payment of $17,500
Annual Australian taxable wages are more than $1M and up to $4M
Grants automatically paid by cheque
Defer payment of returns
$7.5M or less in Australian Taxable Wages
Able to show normal operating conditions have been impacted
All Payroll Tax for FY2020 can be extended until 21 July 2020
Must complete application form
Threshold Increase
Increased to $1M on 1 July 2020 (from $950,000).
South Australia
Up to $4M Grouped Australian Wages
6-month tax waiver (April – September 2020) – no payments required
No application required – RevenueSA will contact businesses
Monthly lodgement must still be made
Further information to be made available shortly
Page 14 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Over $4M in Grouped Australian Wages
Need to demonstrate that you have been significantly impacted
Application not yet available
Application will allow a deferral of payments for 6 months (April – September 2020)
Tasmania
Up to $5M Grouped Australian Wages
Need demonstrate operations have been affected.
Returns for March, April and May are not required. Just need to lodge annual return by 21 July 2020.
Hospitality, Tourism and Seafood Industries
Waiver on these industries for the entire FY2020.
Annual return must still be lodged by 21 July 2020.
Payroll Tax Rebate – New youth employees aged 24 years and under
12 month payroll tax rebate to approved employees.
Must be employed between 1 April 2020 and 31 December 2020.
Northern Territory
Only announcement so far is that the payroll tax exemption for hiring Territory employees has been
extended to 30 June 2021.
Page 15 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Employment issues
This is a summary of various guides provided in the week before the Government mandated shut down of
‘non-essential services’. It is important to emphasise that we cannot advise on employment law related
issues. The following are pointers and ideas, for which further legal advice should be sought
before implementing.
Working from Home
Employers have duty to ensure health and safety so far as reasonably practicable which includes
working at home.
Discharge obligations by providing employees with checklist or risk assessment to complete and sign if
working at home.
Self-Isolation & Stranded Overseas
As this is Government imposed, there is no obligation to pay employees if they cannot work.
However, if the employee was travelling for work purposes then it would be best practice to pay them
for self-isolation.
Always consider if the employee can work from home or access accrued leave or take unpaid leave.
Carer’s/Personal Leave
Still generally referred to as sick leave.
Employees can access this where they are “unfit for work”.
Employees can access this where they are required to care for a child or immediate family member who
is unwell.
Unclear how the Government closure of schools affects this. If the school had voluntarily closed, this
would count as an “unexpected emergency” in which case employees could access this leave.
If the balance of leave is insufficient then consider accessing annual/long service/unpaid leave.
Some employers are providing for ‘special leave’ at this point.
Directions to take Annual Leave
Award employees – limited to close-down periods or where an employee has excessive accrued leave
(usually 8 weeks plus and capped at a quarter of the balance).
Non-Award employees – direction must be ‘reasonable’. Commonly for close down and where employee
has excessive leave.
Page 16 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Stand down employees without pay
The bar for implementing this is very high but that has likely changed with shut down of “non-essential”
services. Previously, it was not enough to show that there was a business down turn or not enough
work.
It may also be applicable if a landlord locks down the building due to COVID-19.
Employees can be stood down without pay “during a period in which the employee cannot be usefully
employed because of… a stoppage of work or any cause for which the employer cannot reasonably be
held responsible.”
VECCI believes a stand down could apply where business is directed to close by the Government or a
department is closed due to quarantine of staff.
There is no right to stand down if there is useful work. In this environment, that could be a blurry line
where there are options to move activities online, work from home, or undertake deliveries if that is an
option.
The stand down decision must be a unilateral one.
If there is work available for some employees, you cannot stand down all employees (only the ones for
which there is no useful work).
During stand down, service continuity is not broken and leave accrues in the usual manner.
Employees can still take their leave entitlements.
Page 17 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Business Related Measures
Victorian Business Grants
Criteria (all are needed to be eligible):
Have been subject to closure or highly impacted by shutdown restrictions announced by the Victorian
Government to-date for relevant industries/employers; and
Employ people; and
Have a turnover of more than $75,000; and
Have payroll of less than $650,000; and
Hold an Australian Business Number (ABN) and held that ABN at 16 March 2020 and
Have been engaged in carrying out the operation of the business in the Australian State of Victoria on 16
March 2020.
What they can access:
Funding of $10,000 per business is available and will be allocated through a grant process.
How to apply:
Applicants must submit an online application here.
Applicants are required to provide a copy of their most recent Business Activity Statement (BAS). Other
supporting materials can also be provided. Applications open on Monday 30 March 2020 and close on Monday
1 June 2020.
Please note: Businesses with a wages bill between $650,000 and $3M will have their payroll tax refunded
and waived for the FY2020 under the Victorian Government’s $1.7B economic survival package. It is expected
that funds can be spent on business activities and costs, including:
Utilities, salaries and rent,
Seeking financial, legal or other advice to support business continuity planning,
Developing the business through marketing and communications activities,
Other supporting activities related to the operation of the business.
Page 18 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Banking
The following is information that has been publically released by the major banks in relation to COVID-19
relief. It is necessarily general in nature. The Australian Banking Association has made various
announcements of intentions to relieve businesses and landlords. Communication with your banking
manager will be crucial during this time.
Government Announcements
Government guarantee for 50% of loans granted to business of up to $20B. (RBA on lending the
funds to banks at 0.25%).
Across the board deferral by ABA for 3 - 6 months.
Westpac
Disaster Relief Information
Business
Unsecured three year term loan up to $250,000 if turnover is under $50M – part of Government
support measure – credit criteria applies.
Deferral of loan repayments for eligible small business customers – business term loans. Total lending
less than $3M. Application required.
Various rate reductions available.
Waiver of merchant terminal rental fees.
Zero establishment fee on equipment finance.
Personal
Financial hardship applications to be completed here.
NAB
COVID-19 Help Information
Business
Deferral of repayment for up to 6 months
Rate reductions
Quick access to lending – for pre-approved customers…
Deferral of credit card payments
Merchant terminal rental waiver for up to 6 months
Deferral of home loan payments for up to 6 months
Personal
Home owner support can be found here.
CBA
Unsecured lending to business of $10B with 5% reduction in normal unsecured interest rates
Business
Unsecured lending of up to $250,000 if turnover is less than $50M, no repayments for 6 months.
3 months deferral of repayments for certain loans less than $3M and overdrafts.
If you have a Relationship Manager, they will be able to assist you at this time. Otherwise, you can contact
our dedicated Business Financial Assistance team on 13 26 07. They are open 24 hours 7 days a week.
Page 19 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Personal
Deferrals of up to 6 months.
ANZ
Business
Repayment deferral of up to 6 months, interest capitalised.
Various rate reductions.
Temporary overdraft increases.
Personal
Rate reduction by 0.15%.
Repayment pause for up to 6 months if experiencing hardship.
Small business asset write-off
Effective from announcement date (12 March 2020) to 30 June 2020.
Businesses with aggregated annual turnover of less than $500M (up from $50M currently) will be able
to write off assets purchased up to the value of $150,000 (up from the current $30,000).
This applies on a per asset basis and can be used on second hand assets first used from commencement
date until 30 June 2020.
Write-off scheduled to revert to $1,000 from 1 July 2020 so await any extension of $30,000 limit.
Accelerated depreciation claims
There is also accelerated depreciation deductions (from 12 March 2020 until 30 June 2021) for
businesses with turnover under $500M.
Asset must be new, cannot be second hand.
Example – asset purchased after 1 July 2020, instant asset write-off not applicable.
Cost Depreciation Year 1 Depreciation subsequently
SBE (turnover less than $10M and 57.5% = $57,500 Claim 30% of reducing balance
SBE depreciation pool) depreciation deduction each year in pool so
$100,000 machinery/equipment 30% x $42,500 in year 2
Turnover $10M - $500M $50% x $50,000 in year one + Claim 20% x remaining balance in
$100,000 equipment with 5 years (20% of $50,000 x [181/365]) = year 2, so 20% x $45,042.
effective life, installed 1 January $50,000 + $4,958.
2021 $54,958 deduction. $9,008 deduction.
Turnover $10M - $500M $50% x $57,581 in year one + Claim 25% x remaining LCL
$100,000 car with 8 years (25% of $28,790 x [181/365]) = balance in year 2, so 25% x
effective life, acquired 1 January $28,790 + $3,569. $25,222.
2021.
Luxury car limit (LCL) applies. $32,359 deduction. $6,305 deduction.
Page 20 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
ATO admin measures
The ATO will work on a case by case basis to support individual businesses.
Assistance is available via the ATO website.
Deferring by up to 4 months the payment date of payments due through BAS, PAYGI, Income
tax & FBT.
Businesses can opt into monthly reporting to get refunds quicker.
Vary PAYG Instalments to $0 for March 2020 quarter; and
Claim a refund for instalments paid September & December 2019 quarters.
Remission of interest & penalties incurred on or after 23 January 2020.
Affected business can enter into low interest payment plans to pay off tax liabilities.
Still need to meet superannuation obligations
Insolvency measures
Increase threshold at which creditors can issue a statutory demand ($2,000 to $20,000) and the time
a company has to respond (21 days to 6 months). This applies for 6 months.
Temporary increase in threshold for creditor initiated bankruptcy and time period for debtors’ response.
Extend period of protection debtor receives after making a declaration of intention to present a debtor’s
petition.
Temporary relief for directors from personal liability while trading insolvent. It applies for 6 months and
is applicable to debts incurred in the ordinary course of business.
Leases & Tenancy
Government has prohibited evictions for a 6 month period.
Banks are offering a variety of relief measures to businesses and landlords, with the intention of
preventing business closure and thus loss of tenancy.
Banking association pledged that the Big 4 banks would not pursue repayments from landlords on
loans, provided that they did not evict their tenant or vary their lease terms over the coming 6 month
period.
Negotiation of lease relief for both landlords and tenants will be crucial, including understanding the
difference between rent-free periods and rent-deferral periods.
Page 21 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Information for sole traders
Their primary source of support should be the JobKeeper payment, provided they meet eligibility. If
they don’t then they need to consider the following point.
If their income dips below $1,075 per fortnight then they will be eligible for the $550 supplement but
not the full $1,100 which includes jobseeker payments.
They can also access on top of this $1,075 the $10,000 in super this FY and $10,000 more next FY if
they have had a reduction in income of 20% or more.
If their income has not dropped below $1,075 per fortnight but they have dropped 20% or more they
can still apply for the $10,000 super withdrawal.
The only people who can access the full $1,100 per fortnight are the unemployed,
Which leaves some sole traders such as Jenni Blundell in a weird spot as she is technically
still open for casual lessons but most of her income has dried up due to school programs
closing/students not turning up.
I think in the case such as Jennilee’s it may be best to advise our clients to speak with Centrelink
regarding their personal circumstances and see if they are entitled to some or all of the jobseeker
allowance as a sole trade with minimal income.
Finally below is a list of what sole traders will need to provide for their claim with Centrelink:
When the Coronavirus supplement comes into effect on 27 April 2020, sole traders applying for Jobseeker will
no longer be asked to provide Employment Separation Certificates, proof of rental arrangements, verification
of relationship status, or a list of assets. Your eligibility will be based on your income, not your savings.
If you apply before 27 April 2020, the list of supporting documents you will need to prepare is as follows:
Evidence of your account balance covering the three months prior to and including the date you are
submitting your claim. This must include BSB, account number, and account holder names for all
accounts, including joint accounts. A bank statement will be accepted, but an ATM slip will not.
A list of the type and amount of each asset and liability of your business.
A profit and loss statement for the previous financial year for your business.
Your latest personal tax return.
Profit and loss statement for your business since income change, or over the last three months.
As a supplement: proof of your lease or rental agreement.
Page 22 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Household Measures
Superannuation Pension Relief
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based
pensions and similar products by 50% for FY2020 and FY2021. This measure will mean that those who don’t
need additional income will not be required to take it out of their fund – potentially relieving some pressure to
sell assets.
It is also applies to market linked pensions and transition to retirement pensions:
Age Default minimum % Reduced minimum %
Under 65 4% 2%
65-74 5% 2.5%
75-79 6% 3%
80-84 7% 3.5%
85-89 9% 4.5%
90-94 11% 5.5%
95 or more 14% 7%
If a pensioner has already drawn more than their reduced minimum, can they return the surplus
pension payments to the fund? No, there will not be a mechanism to return surplus pension payments.
It may however be possible for some clients to recontribute the surplus (if they are eligible to contribute and
the amount will be within their contribution caps).
Page 23 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Early access to Superannuation
There will be early access to superannuation for those that suffer financially from the Coronavirus situation.
Can access up to $20,000; $10,000 before 1 July 2020 and another $10,000 after 1 July 2020 (could be
available for approx. 3 months after 1 July). This measure will be important for employers to be
aware of – if they make an employee redundant or reduce their hours, their employee could be
eligible for this.
Eligibility
To apply for early release of super, you must satisfy any one or more of the following requirements:
you are unemployed; or
you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment
(which includes the single and partnered payments), special benefit or farm household allowance; or
on or after 1 January 2020: you were made redundant;
or your working hours were reduced by 20% or more;
or if you are a sole trader — your business was suspended or there was a reduction in your turnover
of 20% or more.
People accessing their superannuation will not need to pay tax on amounts released and the money they
withdraw will not affect Centrelink or Veterans’ Affairs payments.
How to apply
Apply through myGov – will be available from mid-April 2020
After the ATO has processed your application, they will issue you with a determination. The ATO will also
provide a copy of this determination to your superannuation fund, which will advise them to release your
superannuation payment. It is not yet clear how long it will take for the ATO to process an application and for
the fund to make payment to the individual.
Please note: that anyone who simply withdraws money from their SMSF now, or even after mid-April but
does not follow the right process, will be subject to the usual rules. This could be substantial tax and other
penalties – it is vital to wait until the new rules are in place.
Page 24 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
Centerlink Payments
$750 will be provided to anyone who receives the age pension, youth allowance, newstart allowance,
a carer’s allowance, Commonwealth Senior’s Health Care card holders, AUStudy, or a family tax benefit.
Most of our clients won’t be affected but those with a Commonwealth Senior’s Health Care card or an
aged pension will receive the $750.
The payment will be paid automatically by 31 March 2020 with over 90% done by mid-April 2020.
Payment is tax free.
Couples will receive a payment each so a total of $1,500 if they both have an aged pension,
Commonwealth Senior’s Health Care card or any other eligible payment.
A second payment has been added for 13 July 2020 of $750.
Supplements are also being paid fortnightly for a limited time for people seeking employment. The
amount is $550.
Eligibility requirements (hold one of following on 12 March 2020) are over page, along with those
eligible for the second $550 supplement:
Page 25 of 26KEY SUMMARY OF POINTS – GOVERNMENT’S STIMULUS PACKAGE - MARCH 2020
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