The following is a summary explanation of the support incentives for business, individuals and households from both the Federal Government and the Victorian Government as at 31 March 2020.

This document is best used as a first point of reference. For more detailed explanation and fact sheets refer to the links below and the specific links provided in the section for each initiative:

https://treasury.gov.au/coronavirus/businesses
https://treasury.gov.au/coronavirus/households
https://www.business.vic.gov.au/__data/assets/pdf_file/0005/1888997/Economic-Survival-Program-Fact-Sheet.pdf
Federal Government Business Initiatives

Job Keeper Payment – a wage subsidy up to $1,500 per fortnight
Turnover under $1 billion that has reduced by> 30% compared to a year ago
Refer the rules for eligible employees on the fact sheet
Must apply through ATO
Payment of super on this amount is optional
Applies to sole traders
For 6 months from 30 March
For employees that have been receiving less than the $1,500, the employer will need to top up the payment to the employee p to $1,500 per fortnight, before tax and for those employees earning more than this amount, the employer is able to provide them with a top-up.
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employers_3.pdf

Application Process:

employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020.

Comment:

a significant benefit to employees – it is effectively unemployment benefits via the employer to help employers hold onto their workforce.  Employers can benefit if there is productive work for employees that otherwise would be stood down or maintaining a connection with their business. Payments to employers from the ATO may be in arrears.

PAYG Withholding Credits– cash flow assistance for businesses
For eligible employers prior to March 12
Applies only to employment through the eligible period: Jan. to Sept. 2020
The incentive is claimed from Activity Statements lodged with the ATO for PAYG withheld from employees
minimum of $20k to a maximum of $100k available
Part 1 applies to January to June 2020 and is capped at minimum $10k to maximum of $50k
Part 2 applies from June to Sept in 2-4 equal instalments and equals the amount applicable under Part 1
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_1.pdf

Application Process:

Businesses do not need to apply for the cash flow boosts. The cash flow boosts will be automatically applied to the accounts of eligible businesses when they lodge their activity statement for the relevant periods

Comment:

a significant benefit. For SME’s from January to September, cash outflow for wages will be gross wages less the credits achieved. For many this will be net pay paid whist in the tax return the gross wages amount is tax deductible and the credit received are not taxable.

Temporary relief for financially distressed businesses
Higher thresholds and more time to respond from creditors –
Businesses - increased minimum debt from $2k to $20k and 21 days to 6 months
Individuals – for bankruptcy minimum debt increased from $5k to $20k and time to respond extended from 21 days to 6 months
For the next 6 months, temporary relief from personal liability for directors trading while insolvent will apply with respect to debts incurred in the ordinary course of the company’s business
The Treasurer has been given temporary power to amend the Corporations Act for the next 6 months
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_temporary_relief_for_financially_distressed_businesses.pdf

Comment:

a significant protective measure for businesses under financial stress. It provides the safety net to allow businesses to resume normal business once the crisis has passed.

Backing business investment
Instant asset write-off
increased to $150k for all businesses with turnover less than $500m

Applies from announcement to 30 June 2020 on all new, second-hand assets first used or installed ready for use
Accelerated depreciation
Applies to new assets, other than second-hand or buildings and other capital works, acquired from announcement and first used or installed by 30 June 2021
50% depreciation on installation plus existing annual depreciation amount
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf

Comment:

particularly useful on recovery for businesses with access to equipment finance. Businesses eligible for the small business asset pool benefit greatly if they can make use in the June quarter this financial year

Supporting apprentices and trainees
A wage subsidy of 50% of wages paid during the 9 months from January to September 2020
For businesses with less than 20 employees
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_1.pdf

Comment:

a real boost for trades businesses in the construction industry.

Support for affected regions, communities and industries
The Government has set aside an initial $1 billion to support those regions, communities and industries that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
ATO relief. On a case-by-case basis. This includes the ability to defer payment of certain taxes up to six months and allowing businesses to vary pay as you go instalment amounts to zero for the March 2020 quarter. Business that vary to zero can claim a refund for any instalments made for the September 2019 and December 2019 quarters.
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_severely_affected_regions_and_sectors.pdf

Application Process:

Either contact your accountant or the ATO on 1800 806 218 or visit the ATO website for further information at: www.ato.gov.au.

Comment:

we need the detail, but non-essential businesses forced to close may receive a benefit. Hopefully it finds its way to small cafes and restaurants, gyms etc. Unclear what it means for business forced into hibernation. The ATO relief measures are expected and are of significant benefit.

Support for immediate cash flow needs
Federal Government will provide a guarantee of 50% on new unsecured loans to a maximum of $250k
Three year period with 6 month repayment holiday
Subject to lenders credit assessment process
Lenders encouraged to offer draw down facility
Commence early April and close 30 September 2020
Comment:

a great initiative for those who are eligible. Details of the banks approach are still unclear. We expect the 50% government guarantee will be pressured by the fallout of the downturn to be increased. It will need to be a minimum of 75%.

Quick and efficient access to credit for small businesses
6 months exemption is given from responsible lending obligations for lenders providing credit to small businesses

Comment:

Does this mean eggs and smashed avocados are back….?

Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf

Federal Government Individuals and Household Initiatives

Job Keeper Payment
Eligible on receipt of a notification from your employer
Fixed $1500 per fortnight for 6 months from 30 March
For employees that have been receiving less than the $1,500, the employer will need to top up the payment to the employee p to $1,500 per fortnight, before tax and for those employees earning more than this amount, the employer is able to provide them with a top-up.
Expanded access, reduced means testing, and reduced waiting times have been introduced
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employees_2.pdf

Job Seeker Payment
A six month’s time limited corona virus supplement of $550 per fortnight for eligible payment categories
Does not apply while receiving income protection or leave payments
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals_0.pdf

Payments to support households
assistance to lower income Australians, including pensioners, other social security and veteran income support recipients and eligible concession card holders.
Two separate payments of $750 each, from 31 March and 13 July
Payments are tax exempt and will not count as for social security, farm household allowance and veteran payments
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households_0.pdf

Temporary release from superannuation
Access to $10k in current financial year and a further $10k in FY ended June 21
Eligibility for: unemployed, some Centrelink benefits, redundant or working hours reduced by >20%
Amounts received are non-taxable
Apply through myGov
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_2.pdf

Reducing Superannuation minimum draw down rates
Minimum draw down rates for account based pensions are reduced by 50%
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/factsheet6providingsupportforretireestomanagemarketvolatility-25march2.pdf

Reducing social security deeming rates
From 1 May 2020 the upper deeming rate will be 2.25% and the lower rate will be 0.25%
Fact sheet:

https://treasury.gov.au/sites/default/files/2020-03/factsheet6providingsupportforretireestomanagemarketvolatility-25march2.pdf

Victorian Government Initiatives

Fact Sheet:

Economic Survival Package

https://www.business.vic.gov.au/__data/assets/pdf_file/0005/1888997/Economic-Survival-Program-Fact-Sheet.pdf

Payroll tax waived
For businesses with annual taxable wages up to $3m and over $650k
Full relief for the current financial year ending June 2020.
Comment: A significant benefit and this tax should be removed permanently for these businesses

Land tax deferral
For landowners with total taxable landholdings below $1m
Option to defer 2020 payment until after 31 December 2020.

Liquor licence fees waived
A renewable liquor licence for 2020 will be refunded if paid and waived for those yet to pay.

Business Support Fund
$10k per business allocated through a grant process for business that meet the criteria
Subject to closure or highly impacted by non-essential activity directions
Turnover more than $75k and payroll less than $650k and have an ABN and carry on business in Victoria prior to 16 March

Fact Sheet & Applications:

https://www.business.vic.gov.au/__data/assets/pdf_file/0005/1888997/Economic-Survival-Program-Fact-Sheet.pdf

Working for Victoria Fund
Under the $500 million Working for Victoria Fund, displaced workers will be eligible to apply for different types of work.

We will continue to publish updates as Governments release information.

Prepared by:

Philip Marendaz FCPA

Managing Director

Marendaz Accountants and Business Consultants

phil@mabc.net.au

0419 217 758

31 March 2020

Visit us at our website:    http://marendaz.com.au

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