Federal Government’s second coronavirus stimulus package.

What it means for your wallet and Centrelink payments.

Support for Individuals and Households

The Australian Government is providing financial assistance to Australians. This assistance includes income support payments, payments to support households and temporary early releases of superannuation.

  • Income support for individuals
  • Payments to support households
  • Temporary early release of superannuation
  • Temporarily reducing superannuation minimum drawdown rates
  • Reducing social security deeming rate

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 bepaid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months.

Eligibility

Payment categories

The income support payment categories eligible to receive the Coronavirus supplement are:

  • Jobseeker Payment (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.

How to apply

To claim online, people who do not already deal with Services Australia will need to set up their myGov account, call to verify their identity, and get a link to their Centrelink online account.

Accelerated claim process: To ensure timely access to payments, new applicants are encouraged to claim through on-line and mobile channels. If applicants do not have internet access, they can claim over the phone.

Payments to support 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.

A person can be eligible to receive both a first and second support payment. However, they can only receive one $750 payment in each round of payments, even if they qualify in each round of the payments in multiple ways. The payment will be exempt from taxation and will not count as income for the purposes of Social Security,Farm Household Allowance and Veteran payments.

How to apply

To be eligible for the first payment, you must be residing in Australia and be receiving one of the following payments, or hold one of the following concession cards, at any time from 12 March 2020 to 13 April 2020,inclusive:

Age Pension, Disability Support Pension, Carer Payment, Parenting Payment, Wife Pension, Widow B Pension, ABSTUDY (Living Allowance), Austudy, Bereavement Allowance, Newstart Allowance, JobSeeker Payment, Youth Allowance, Partner Allowance, Sickness Allowance, Special Benefit, Widow Allowance, Family Tax Benefit, including Double Orphan Pension, Carer Allowance, Pensioner Concession Card (PCC) holders, Commonwealth Seniors Health Card holders, Veteran Service Pension; Veteran Income Support Supplement, Veteran Compensation payments, including lump sum payments, War Widow(er) Pension and Veteran Payment, DVA PCC holders, DVA Education Scheme recipients, Disability Pensioners at the
temporary special rate, DVA Income support pensioners at $0 rate, Veteran Gold Card holders, Farm Household Allowance

Temporary early release of superannuation

The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

Eligibility

To apply for early release 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 per cent or more; or
    • if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent 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

If you are eligible for this new ground of early release, you can apply directly to the ATO through the myGov website: www.my.gov.au.

You will need to certify that you meet the above eligibility criteria.

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. Your fund will then make the payment to you, without you needing to apply to them directly. However, to ensure you receive your payment as soon as possible, you should contact your fund to check that they have your correct details, including your current bank account details and proof of identity documents.

Separate arrangements will apply if you are a member of a self-managed superannuation fund (SMSF). Further guidance will be available on the ATO website: www.ato.gov.au.

Support for Businesses

The Australian Government is supporting Australian businesses to manage cash flow challenges and retain employees. Assistance includes cash flow support to businesses and temporary measures to provide relief for financially distressed businesses.

  • Boosting cash flow for employers
  • Temporary relief for financially distressed businesses
  • Increasing the instant asset write-off
  • Backing business investment
  • Supporting apprentices and trainees

Boosting cash flow for employers

The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000. These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.

Under the enhanced scheme (PAYG Withholding Credits 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. In addition, the minimum payment is being increased from $2,000 to $10,000.

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 all of the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments. This additional payment continues cash flow support over a longer period, increasing confidence, helping employers to retain staff and helping entities to keep operating.

Eligibility – PAYG Withholding Credits

Small and medium sized business entities and NFPs with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

  • 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.

Eligibility – Additional payment

To qualify for the additional payment, the entity must continue to be active.

For monthly activity statement lodgers, the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to a quarter (25%) of their total initial PAYG Withholding Credit for Employers payment following the lodgment of their June 2020, July 2020, August 2020 and September 2020 activity statements (up to a total of $50,000).

For quarterly activity statement lodgers the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to half (50%) of their total initial PAYG Withholding Credit payment following the lodgment of their June 2020 and September 2020 activity statements (up to a total of $50,000).

Timing – Additional payment

The additional payment will be applied to a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to the entity upon lodgment of their activity statements. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.

How to apply

Not required – automatic, the ATO will deliver the payment as a credit to the entity upon lodgment of their activity statements

Support for Apprentices and Trainees

The Government is supporting small business to retain 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.

Eligibility

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 of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy.Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.

How to apply

Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.Further information is available at:

  • The Department of Education, Skills and Employment website at: www.dese.gov.au
  • Australian Apprenticeships website at: www.australianapprenticeships.gov.au

For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.

Guarantee Loan Scheme – Easy Access to Credit

The Government will provide eligible lenders with a guarantee for loans with the following terms:

  • Maximum total size of loans of $250,000 per borrower.
  • The loans will be up to three years, with an initial six month repayment holiday.
  • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
  • Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

As part of the loan products available, the Government will encourage lenders to provide facilities to SMEs that only have to be drawn if needed by the SME. This will mean that the SME will only incur interest on the amount they draw down. If they do not draw down any funds from the facility, no interest will be charged,but they will retain the flexibility to draw down in the future should they need to.The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

The Government is providing an exemption from responsible lending obligations for lenders providing credit to existing small business customers. This exemption is for six months, and applies to any credit for business purposes, including new credit, credit limit increases and credit variations and restructures. Responsible lending obligations do not currently apply to lending which is predominantly for a business purpose, but it can take time and effort for lenders to be satisfied that the money borrowed meets this test. By providing a temporary exemption from responsible lending obligations, this reform will help small businesses get access to credit quickly and efficiently.

JobKeeper Wages Subsidy

This afternoon the Prime Minister announced a $130b “JobKeeper” package – the largest package delivered by the Federal Government in response to COVID-19 to date. In this video we breakdown the eligibility requirements, how it works and how to apply.

Expect more to come…

An important thing to keep in mind is that this is the second suite of measures announced by the Government in just a matter of weeks. We are expecting more measures in the near future.

NEED HELP?
BOOK AN ONLINE APPOINTMENT

If you’ve got a burning question about how to take your business to the next level, it’s as simple as asking us right now.
Breaking down barriers is why we exist.
Book Appointment