Wow! This week has been extraordinary since the initial announcement by the Government of the initial stimulus on March 12, added is the extra social distancing measures as well as the associated health actions and the suspension of the AFL competition, having a substantial impact on business in Australia.
SMB Accounting will be working overtime to ensure that all our clients are supported. Whether it is discussing strategies to smooth cashflows, revising forecasts/budgets, looking at re-evaluating your costs structure.
For all we are concentrating a great deal of time working through the various state and federal stimulus/rescue packages to ensure a maximum support is provided. To this end we have over the weekend preparing a comprehensive Booklet which we have consolidated the known support from federal and state governments, banks, insurance companies and energy companies which will be available for download from our website in the near future
Firstly here is a quick overview of the announcement yesterday (22nd March 2020)
The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Corona virus supplement to be paid at a rate of $550per fortnight.
This then being a total of $1,100 (including the Jobseeker payment)
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.
For the period of the Corona virus supplement, there will be expanded access to the income support payments listed above there is expanded access to Jobseeker Payment and the criteria will provide payment access for permanent employees who are stood down or lose their employment; sole traders; the self-employed; casual workers; and contract workers who meet the income tests as a result of the economic downturn due to the Corona virus. This could also include a person required to care for someone who is affected by the Corona virus.
The previously announced $25k has been upsized now to maximum of $50k and will provide 100% of the PAYGW from March to June 2020 period. The second $50k is exactly the same, just to be claimed from July to October 2020 period.
They have also said that these payments will only be available to active eligible employers established prior to 12 March 2020.
Your turnover must be less than $50m to be eligible and you simply need to have employees for whom you withhold tax on wage payments.
50% of the apprentice or trainee’s wage paid will be subsidised by the government during the 9 months from 1 January 2020 to 30 September 2020, up to $21,000 per eligible apprentice or trainee. It will be capped at $7,000 per quarter.
The business must have had the apprentice or trainee in training with a small business as of 1 March 2020 and is available for business employing less than 20 full-time employees.
You will be required to have an eligibility assessment undertaken by an Australian Apprenticeship Support Network (AASN) provider.
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
Here are links for additional information:
- The Department of Education, Skills and Employment website at: dese.gov.au
- Australian Apprenticeships website at: australianapprenticeships.gov.au
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
The federal government will provide a guarantee of 50% to SME lenders for new unsecured 3 year loans of up to $250k per borrower to be used for working capital and these loans will not require any repayments for 6 months.
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
Other measures announced
- Increase in the threshold for creditors to issue statutory demands from $2k to $20k for the next 6 months.
- Increase in the threshold for initiating bankruptcy proceedings from $5k to $20k for the next 6 months.
- Plus an increase in timeframe whereby you are required to respond to a bankruptcy notice or a statutory demand from 21 days to 6 months.
- Directors will be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business. Egregious cases of dishonesty and fraud will still be subject to criminal penalties.
Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020.
- To apply you must satisfy on or more of the following:
- You are unemployed; 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.
- No tax will be payable on these amounts
- You can apply directly to the ATO through the myGov website: my.gov.au
As said above there is much more available and in place and this cannot be an exhaustive list as well as the continued fluid nature of the circumstances unfolding, and we will continue to monitor announcements etc as they happen
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Please send an email firstname.lastname@example.org if you have any questions