26 Mar Government Stimulus Package
We are indeed in unprecedented times, and the Government has reacted swiftly with two stimulus packages.
Together they are intended to
- Quickly provide additional cash flow to small and medium businesses who employ people,
- Assist employees and sole traders with social safety net support if they are unable to work normally,
- Assist those in financial distress by allowing them to draw on their superannuation,
- Assist those on low incomes receiving a wide range of income support and pension benefits with supplemental payments.
- Assist those already drawing on their superannuation preserve their superannuation balances,
- Assist small and medium businesses in short term distress to remain in business, and
- Stimulate investment by increasing immediate asset write-offs, and 150% investment allowances.
To assist understand the packages, and how they may bring support in your situation, below is a summary of the measures:
Additional Cash Flow to Employers
For eligible employers (businesses, charities and not for profits), there will be a 100% refund of PAYG tax withheld from employees for the balance of this financial year.
The refund will be based on amounts shown on BAS and IAS forms lodged for March through to June 2020.There is a minimum payment of $10k for eligible employers, and a maximum payment of $100k.
In addition, in the first three months of next financial year, there is a matching payment equivalent to the payment received in the period to June 2020.The minimum payment available is $20k, and the maximum is $100k.
Assistance for Employees and Sole Traders
Anyone who has been put off, had their hours significantly reduced or has to suspend or cut back on their business will qualify for Commonwealth assistance
Access to Jobseeker allowance (previously Newstart) will temporarily be made easier – waiting periods have been waived and assets and income tests relaxed
There will be an additional supplement of $550/fortnight (effectively doubling the Newstart rate) for those receiving Jobseeker and aligned payments.
Applicants will need to declare their circumstances are due to the economic downturn as a result of the virus.
The changes will apply for the next six months
Supplemental Income Payments
There will be a one off payment of $750 to most people receiving a Centrelink or Veterans’ Affairs income support payment
This includes those receiving family tax benefits
The payment will be made around the 31st March.
There will be an additional $750 payment around the 13th July.
This will be available to those receiving social security and veteran income support payments.
However those receiving the $550 supplemental allowance will not be eligible
Early Access to Superannuation
Individuals in financial distress will be able to draw on their superannuation
If you qualify, up to $10k may be drawn up to June 2020, and a further $10k in the three months to September.
People made redundant since 1st January, 2020, or had their working hours reduced by 20% or more will qualify.
Those unemployed or otherwise eligible to receive a broad range of Commonwealth assistance can also take advantage of early superannuation release.
The money will not be taxed on release, and money drawn will not effect Centrelink or Veterans’ Affairs payments.
Preserve Superannuation Balances
The minimum amounts required to be drawn as superannuation pensions have been halved for 2019/20 and 2020/21.
This will assist preserve superannuation balances to offset the general fall in investment returns.
Making it Easier for Businesses in Distress to Remain in Business
The Government will guarantee 50% of an eligible loan taken out by small business, to assist them stay in business.
Loans must be to finance working capital and must be unsecured
The scheme will operate for loans taken in the six months starting 1st April, 2020
In addition there will be changes to actions that can be taken by creditors, to make it less likely they will put a company into insolvency for the period of the corona virus crisis.
Stimulus to Investment
Eligible businesses (turnover < $500m) will be able to immediately write off assets costing less than $150k and purchased prior to 30th June.
The existing depreciation limit of $57,581 continues to cap the amount that can be written off for cars.
In addition, eligible businesses will be able to more quickly deduct assets >$150k.
50% of the asset value can be written off on acquisition, and the remaining asset value then depreciated under existing depreciation rules.
The packages are a broad ranging attempt to provide rapid, short term stimulus to defray the effects short term economic disruption.
The above is a summary of major measures and a general description of how they apply.
Please call to arrange an obligation free discussion to determine these measures could be of benefit for you, or if you are seeking input into managing through this difficult period.
We plan to continue operations in a safe, and socially responsible manner, from our facilities provided by Noosa Boardroom, located adjacent to Noosa Civic.
We also offer virtual meetings using fuss-free video conferencing facilities. Details can be provided by email on request.
Please act now, to help us help you ensure the best outcome possible for your circumstances.
Links to further detail on the major components of the package are below
Boosting cash flow for employers
Income support for individuals
** Please note we are temporary located at the ‘Noosa Boardroom’ details are below.
Public Accountants & Business Advisors
A Noosa Boardroom Suite CA 6-10
28 Eenie Creek Road Noosaville QLD 4566
P PO Box 994, Noosa Heads QLD 4567 Australia
T 07-5474 8775
F 07-5474 8223