COVID-19 Stimulus Package - Fordham group
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COVID-19 Stimulus Package
Federal Government Measures
Business
What is the Relief Eligibility Criteria How to claim Timing
1. BOOSTING CASH FLOW FOR EMPLOYERS PAYMENTS (ENHANCED)
A. Employers will receive a payment equal to • Small and medium-sized business entities • The cash flow boost provides a tax-free • Payment will begin from 28 April 2020
100% of their salary and wages withheld with aggregated annual turnover under $50 payment to employers and is automatically upon employers lodging eligible upcoming
(up from 50%) with the max payment being million (based on prior year turnover) and calculated by the Australian Taxation Office activity statements. Where the credit
increased from $25,000 to $50,000 and the that employ workers are eligible. (ATO). places the entity in a refund position, the
minimum payment is being increased from • Eligible employers that withhold tax to • There are no new forms required. ATO will deliver the refund within14 days.
$2,000 to $10,000. the ATO on their employees’ salary and • The payment will be delivered by the o Quarterly lodgers will be eligible to
wages will receive a payment equal to 100 ATO as an automatic credit in the activity receive the payment for the quarters
per cent of the amount withheld, up to a statement system ending March 2020 and June 2020.
maximum payment of $50,000. o Monthly lodgers will be eligible to
• Eligible employers that pay salary and receive the payment for the March
wages will receive a minimum payment of 2020, April 2020, May 2020 and June
$10,000, even if they are not required to 2020 lodgements.
withhold tax in the relevant period. • The minimum payment will be applied to
• The payments will only be available to the entities’ first lodgement.
active eligible employers established prior
to 12 March 2020.
B. Additional payment is also being • To qualify for the additional payment, • The cash flow boost provides a tax-free • The additional payment will be applied
introduced in the July – October 2020 the entity must continue to be active – payment to employers and is automatically to a limited number of activity statement
period. Eligible businesses will receive an specifically, this means that they must calculated by the Australian Taxation Office lodgements. Where the credit places the
additional payment equal to the total of all lodge a GST return during the relevant (ATO). entity in a refund position, the ATO will
of the Boosting Cash Flow for Employers period. • There are no new forms required. deliver the refund within 14 days.
payments they have received (i.e. the • Eligible businesses will receive at least • The payment will be delivered by the o Quarterly lodgers will be eligible to
same amount that they received under A $20,000, up to a total of $100,000 total ATO as an automatic credit in the activity receive the additional payment for
above for the January to June period. under both payments (i.e. $50,000 statement system the quarters ending June 2020 and
maximum for both the initial and additional September 2020. Each additional
payment). payment will be equal to half of their
total initial Boosting Cash Flow for
Employers payment (up to a total of
$50,000).
o Monthly lodgers will be eligible to
receive the additional payment for the
June 2020, July 2020, August 2020 and
September 2020 lodgements. Each
additional payment will be equal to a
quarter of their total initial Boosting
Cash Flow for Employers payment (up
to a total of $50,000).What is the Relief Eligibility Criteria How to claim Timing
2. SUPPORTING APPRENTICES AND TRAINEES
A. Eligible employers can apply for a • The subsidy will be available to small • Employers will be able to access the • Employers can register for the subsidy
wage subsidy of 50 per cent of the businesses employing fewer than 20 subsidy after an eligibility assessment from early April 2020. Final claims
apprentice’s or trainee’s wage paid full-time employees who retain an is undertaken by an Australian for payment must be lodged by 31
during the 9 months from 1 January apprentice or trainee. Apprenticeship Support Network December 2020.
2020 to 30 September 2020. • The apprentice or trainee must have (AASN) provider
been in training with a small business
B. Where small business is not able to as at 1 March 2020.
retain an apprentice, the subsidy will be • Employers of any size and Group
available to a new employer. Training Organisations that re-engage
an eligible out-of-trade apprentice or
C. Employers will be reimbursed up to trainee will be eligible for the subsidy.
a maximum of $21,000 per eligible
apprentice or trainee ($7,000 per
quarter).
3. TEMPORARY RELIEF FOR FINANCIALLY DISTRESSED BUSINESSES
A. Company directors will have temporary • The insolvent trading relief will apply to • For the next 6-month period.
protection against personal liability for debts incurred in the ordinary course of
trading whilst insolvent to encourage the company’s business only.
companies to continue trading.
B. The Government will increase the
threshold at which a creditor can put a
company into insolvency from $2,000 to
$20,000, and from 21 days to 6 months
to respond.
C. Personal Insolvency threshold also
increased from $5,000 to $20,000, with
reference to the amount required to
initiate bankruptcy proceedings.What is the Relief Eligibility Criteria How to claim Timing 4. SUPPORT FOR IMMEDIATE CASH FLOW NEEDS FOR SMES A. Under the SME Guarantee Scheme, the • SMEs with a turnover of up to $50 • Discuss this measure with your finance • The Scheme will commence by early Government will provide a guarantee million will be eligible to receive these broker or lending institution April 2020 and be available for new of 50 per cent to SME lenders for new loans loans made by participating lenders unsecured loans to be used for working until 30 September 2020. capital, in order to enhance the lending ability of the banks. The loan amount will be capped at $250,000 and will be on a3 year term, with no repayments required for the first 6 months. Interest will only be incurred on the amount of the facility that is drawn down. B. The Government is providing a • Must be an existing small business • Discuss this measure with your finance • Applies immediately, for a 6-month temporary exemption from responsible customer of the bank, and be used for broker or lending institution period. lending obligations for lenders providing business purposes including new credit, credit to existing small business credit limit increases, and restructures customers of loans. 5. OTHER GOVERNMENT BASED MEASURES A. $1 billion has been set aside to assist • Based on assessment by the Federal • Based on assessment by the Federal • Once economic impacts have been those that have been disproportionately Government Government determined. affected by economic impacts, including tourism, agriculture and education B. The RBA decreased the cash rate by 0.25%, and has allowed the banks access to capital at a much cheaper rate to encourage lending.
Tax measures to support business investment
What is the Relief Eligibility Criteria How to claim Timing
A. Increasing the instant asset write-off • The Government is expanding access • Upon lodgement of the business’ • This proposal applies from
(IAWO) threshold from $30,000 to so that more businesses can take income tax return for the year ending announcement until 30 June 2020,
$150,000 for new and second-hand advantage of the IAWO. The annual 30 June 2020 for new or second-hand assets first
assets installed and ready for use from turnover threshold for businesses is used or installed ready for use in this
12 March 2020 to 30 June 2020. increasing from $50 million to $500 timeframe.
million.
• The IAWO is due to revert to $1,000 for
small businesses (turnover less than
$10 million) from 1 July 2020.
B. 15-month investment incentive to • Businesses with an aggregated • Upon lodgement of the business’ • The measure applies from 12 March
accelerate depreciation deductions for turnover below $500m will be able to income tax return for the year ending 2020 to 30 June 2021 to new assets
the purchase of assets that don’t qualify deduct 50% of the cost of an eligible 30 June 2020 that can be depreciated under
for the above IAWO relief (i.e. because asset on installation, with existing Div 40 of ITAA 1997 (i.e. plant,
it exceeds the $150,000 threshold or depreciation (or capital allowance) rules equipment and specified intangible
was not purchased within the required applying to the balance of the asset’s assets, such as patents).
timeframe) cost.
• It does not apply to second-hand Div
40 assets, or buildings and other capital
works depreciable under Div 43 of ITAA
1997.ATO administrative relief What is the Relief Eligibility Criteria How to claim Timing A. Deferring by up to six months the • All Measures – The ATO will assess • All Measures – The ATO will assess • From March 2020 quarter on a case-by- payment date of amounts due and tailor a support plan for needs and and tailor a support plan for needs and case basis through business activity statements circumstance once being contacted by circumstance once being contacted by (including PAYG instalments), income the taxpayers the taxpayers tax assessments, fringe benefits tax assessments and excise. B. 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. C. 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 D. Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities E. Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.
Individuals & Households
What is the Relief Eligibility Criteria How to claim Timing
1. ACCESS TO SUPERANNUATION FOR IMPACTED INDIVIDUALS
A. The Government is allowing individuals • You are unemployed; or • Eligible individuals will be able to apply • The initial payment can occur from mid-
affected by the crisis to access up to • you are eligible to receive a job online through myGov. If approved, they April 2020 (and before 1 July 2020) after
$10,000 of their superannuation in prior seeker payment, youth allowance for will not need to pay tax on the money applying online through myGov.
to 30 June 2020, and a further $10,000 in jobseekers, parenting payment (which released. • Access to the second payment is from
2020-21. includes the single and partnered 1 July 2020 to 30 September 2020 after
payments), special benefit or farm applying online through myGov.
Individuals will not need to pay tax on household allowance; or
amounts released, and the money they • On or after 1 January 2020:
withdraw will not affect Centrelink or o you were made redundant; or
Veterans’ Affairs payments. o your working hours were reduced by
20 per cent or more; or
o if you are a sole trader — your
business was suspended, or there
was a reduction in your turnover of
20 per cent or more.
2. REDUCED PENSION WITHDRAWAL PERCENTAGES
A. The Government is temporarily reducing • Individuals with account-based pensions • Simply withdraw half of the normal • 2019-20 and 2020-21 years.
superannuation minimum drawdown drawdown requirement for the 2019-20
requirements for account-based pensions and 2020-21 years.
and similar products by 50% for 2019-20
and 2020-21.
This measure will benefit retirees by
providing them with more flexibility as to
how they manage their superannuation
assets.What is the Relief Eligibility Criteria How to claim Timing
3. REDUCTION IN SOCIAL SECURITY DEEMING RATES
A. The Government is reducing deeming • To provide benefits to income support
rates by a further 0.25 percentage points recipients, including pensioners
on top of the measures announced in its
first round of stimulus.
4. INCOME SUPPORT FOR INDIVIDUALS & HOUSEHOLD
A. Eligibility to income support payments to • Available to new and existing recipient • Must be done via Centrelink either in • Available immediately, for the next 6
be boosted, including access to a new of the eligible payment categories for person or online. months.
Coronavirus supplement payment of $550 the next 6 months.
per fortnight. • Those eligible for the following will be
able to access the support:
o Jobseeker Payment
o Youth Allowance Jobseeker
o Parenting Payment
o Farm Household Allowance
o Special Benefit Recipients
B. Household support to also be boosted via • Available to social security, veteran and • If you are already an eligible recipient, you • The first payment will be paid automatically
payment of two separate tax-exempt $750 other income support recipients and don’t need to do anything as the payments from 31 March 2020.
payments. eligible concession card holders. will be automatically made. • The second payment will be paid
• For the first payment, the person must • If not, then contact must be made with automatically from 13 July 2020.
have been an eligible payment recipient Centrelink to ensure the person is
or concession card holder at any time appropriately classified.
from 12 March 2020 to 13 April 2020.
• For the second payment, the person
must be an eligible payment recipient
or concession card holder on 10 July
2020.State Government Measures
The various State Governments in Australia have released their own economic stimulus packages.
Payroll Tax Relief
One of the consistent measures is relief for businesses on their Payroll Tax obligations as follows:
State What is the Relief Eligibility Criteria How to claim
Victoria • All eligible businesses will have 100% of their Victorian • A business must have annual taxable Victorian wages • Eligible businesses must continue to lodge payroll tax
Payroll Tax waived for full 2019-20 financial year. of less than $3million. returns, but do not need to make any payments.
• Eligible businesses will receive a full refund of any Payroll • The threshold applies to each individual employer; therefore • The State Revenue Office will directly contact eligible
Tax paid for the current financial year to date – that is, any employers who are members of a payroll tax group that businesses regarding reimbursement for Payroll Tax
from 1 July 2019 for the current financial year. individually pays wages of less than $3million p.a. will be already paid in this financial year.
• Eligible businesses can also defer payment of any eligible to access the relief, even if on a group basis, the • The reimbursements will commence from 27 March 2020.
Payroll Tax for the first quarter of the 2020-21 financial payroll exceeds the $3million threshold.
year until October 2020.
• Payments made to employees to top them up to $1,500
per fortnight under the JobKeeper program will be exempt,
including payments made to stood down employees.
New South Wales • All eligible businesses will have their NSW Payroll Tax • A business must have annual taxable Australian wages • Eligible businesses must continue to lodge payroll tax
waived for the remaining three months of the 2019-20 of less than $10million. This applies on a grouped basis. returns, but do not need to make any payments for their
financial year (April – June 2020). This will save eligible payroll tax obligations for the months of March, April &
businesses a quarter of their 2020 financial year’s May 2020.
Payroll Tax; and
• Increasing the payroll tax-free threshold for all
businesses for the 2020-21 financial year to $1million
(up from $900,000).
Queensland • Businesses that have been directly or indirectly • A business must have annual taxable Australian wages • You can lodge an application at the email address
impacted by the coronavirus can apply for QLD of less than $6.5million. provided below, prior to 31 May 2020*
Payroll Tax relief or deferral.
• Requires an individual business to apply for relief or deferral.
Tasmania • All eligible businesses will have their Tasmanian Payroll • An eligible business operating in the hospitality, tourism • Application processes will be released soon. Check the
Tax waived for the remaining four months of the 2019-20 and seafood industries will have automatic approval; Tasmanian State Revenue Office website for further details.
financial year (March – June 2020). • Other businesses with annual payrolls of up to $5million will
also be able to apply for a waiver, but eligibility will be based
on how significantly the virus has affected business. Further
detail on these criteria has not yet been released.
South Australia • All eligible businesses will have their South Australian • A business must have annual taxable Australia grouped • For businesses under the $4million threshold no
Payroll Tax waived for the next six-months (April to wages of less than $4million receive the waiver concession. application is required and RevenueSA will notify
September 2020). • Employers with grouped annual wages above $4m are eligible businesses online.
able to defer payment for six months where they can • Monthly payroll tax returns must still be lodged
show that they have been significantly impacted. during the period.
• For businesses over the $4million threshold,
an application will need to be submitted online
to obtain a payroll tax deferral.
*https://www.business.qld.gov.au/running-business/employing/payroll-tax/lodging/coronavirus-tax-reliefThe Victorian Government has also announced the following measures that may be
applicable to some Business owners:
Land Tax Measures
Relief available for eligible landlords:
- 25% reduction for each eligible property for the 2020 land tax assessment.
- Deferral of the remaining 75% of 2020 land tax until 31 March 2021.
Eligibility criteria
- Applies to landlords of both commercial and residential property who have provided rent relief to
tenants who have been impacted by COVID-19.
- For commercial landlords, the tenant must have annual turnover less than $50 million, and be eligible
for the JobKeeper program.
- The relief is also available to landlords who have been unable to secure a tenant because of COVID-19.
How to claim:
- Eligible landlords can apply for the relief and deferral through the SRO’s online system, My Land Tax.
- The lease agreement and written evidence of the arrangements agreed with the tenant will need to be
provided.
- If not tenanted, details to support efforts to secure a tenant will be required.
Alternative deferral option available:
- In addition, if not eligible under the above criteria, landowners with at least one non-residential property and
total taxable landholdings below $1 million can defer their 2020 land tax payment until 31 March 2021.
- If you have already paid the 2020 land tax, a request can be made to return the payment, which must
then be repaid to the SRO by the deferral date.
- Eligible landowners will be contacted directly by the SRO and given the option to defer.
This information has been prepared by Fordham Business Advisors Pty Ltd (Fordham) ABN 77 140 981 853 AFSL 488639 and Perpetual Trustee Company Limited (PTCo) ABN 42 000 001 007, AFSL
236643. Perpetual Private advice and services are provided by PTCo. To view the Perpetual Group’s Financial Services Guide, please click here. Fordham’s liability is limited by a scheme approved under
Professional Standards Legislation. It is general information only and is not intended to provide you with advice or take into account your objectives, financial situation or needs. You should consider, with
a financial adviser, whether the information is suitable for your circumstances. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information.
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