Due to the Coronavirus COVID-19 significant economic consequences, the Australian Government has enacted a response that was passed in Parliament this week, to support individuals, households, businesses and broader community.
Here is a comprehensive summary of several ATO Treasury and government websites to give easy reliable access.
Individuals – Temporary Early Release of Super
Individuals and sole traders directly impacted can access up to $10,000 of super tax-free and can apply in April 2020 via MyGov website, plus a further $10,000 from July 2020, tax-free.
But consider Carefully – you need to declare you are unemployed or work has reduced by 20% or more, and other factors.
Expanded eligibility for Income Support for 6 months to both new and existing people for JobSeeker (former Newstart) and 4 other payments PLUS a Coronavirus Supplement of an additional $550, per fortnight. This supplement has expanded eligibility for employees who have been stood down or lost employment, sole traders (who try to sustain their business when possible), self-employed, casuals, contract workers and carers for someone affected by Coronavirus. Asset tests waived but income tests such as leave payouts or insurance payments will apply, plus reduced waiting periods. Payments from 27 April.
Household payments – pensioners, social security and concession card holders
$750 from 31 March and a second payment again from 10 July 2020, for pensioners and concession card holders. For 5 payment recipients such as JobSeeker and Youth Allowance and receiving the Coronavirus Supplement above, will not the second $750.
Lower Deeming rates
The deeming rates reduced to upper 2.25% and lower 0.25% rates for income support recipients
Temporary Reduced Minimum Drawdown rates on pensions
Account-based pensions will have rates halved for the 19/20 and 20/21 years (but not be able to put any amounts already paid over the applicable %).
Boosting Cash Flow for Employers
The first support is delivered as a CREDIT when lodging the March to June activity statements minimum $10,000 to max $50,000 over the March, April May and June activity statements. It is based on PAYG paid on wages.
Additional support is delivered as a CREDIT when lodging the June to Sept activity statements minimum $10,000 to max $50,000 over the June, July, Aug and Sep activity statements. To Qualify the entity must continue to be active and paying employees.
These will also be automatically calculated by the ATO as a credit on the activity statement, no forms required, from 28 April with active employers prior to 12 March 2020. Where this raises a refund position, it will be refunded within 14 days.
Protect Distresssed Businesses – Increased thresholds for Statutory Demand, Response time and Insolvency
Otherwise profitable and viable businesses temporarily face financial distress, and there a safety net to make sure that when the crisis has passed they can resume normal business operations. One element of that safety net is to lessen the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business.
Instant Asset Write-off Increase
The instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Business Investment – Accelerated Depreciation
Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, as accelerated depreciation, with existing depreciation rules applying to the balance of the asset’s cost.
Apprentices and Trainees
Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 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 that employs that apprentice. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Support for Coronavirus Regions and Communities
Funds will be available to assist regions significantly affected during the outbreak and the recovery. In addition, the Government is assisting our airline industry by providing relief from a number of taxes and Government charges estimated to total up to $715 million.
Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs. The Scheme will guarantee up to $40 billion of new lending, by further enhancing lenders’ willingness and ability to provide credit.
The Government is cutting red tape by providing a temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers. This reform will help small businesses get access to credit quickly and efficiently.
The RBA announced a term funding facility for the banking system. Banks will have access to at least $90 billion in funding at a fixed interest rate of 0.25 per cent. This will reinforce the benefits of a low cash rate by reducing funding costs for banks, which in turn will help reduce interest rates for borrowers.
The Top pages for all Information
All Government departments – visit australia.gov.au
Treasury’s Economic Response to the Coronavirus
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