The Federal Government has released the second stage of its economic plan to cushion the economic impact of the coronavirus and help build a bridge to recovery. Included in the plan will be a range of support packages for businesses, aimed at stabilising the current economic downturn and keeping the lights on for employers.
Treasurer Josh Frydenberg has announced several initiatives that may help your business during this unprecedented time.
Small businesses will receive a boost from the government in the form of tax-free cash payments, delivered through the Australian Tax Office from 28 April. Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible to access funds up to $100,000, with a minimum payment of $10,000.
From March, eligible businesses 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.
Quarterly lodgers will be eligible to receive the payment for the quarters ending March and June 2020, while monthly lodgers will be eligible for the March, April, May and June 2020 lodgements. These benefits will now be available for not-for-profits as well.
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Supplementary payments will be made to sole traders heavily impacted by the outbreak through Job Seeker payments provided by Centrelink. Eligible business owners and casuals will receive $550 per fortnight if their revenue is down by more than 20 percent. This would effectively grant individuals up to $1100 in benefits if they were to lose all income.
Included in the package are temporary arrangements for waiving of the assets test, liquid assets waiting periods and seasonal work preclusion periods. Income testing will still apply, consistent with current arrangements allowing individuals to earn up to $1000 before losing access to benefits.
For more information on eligibility criteria, visit here
As part of the new provisions, heavily impacted individuals will also be granted emergency access to their superannuation. For the 2019 – 20 financial period, eligible individuals can apply through MyGov for up to $10,000 tax-free before 1 July 2020. They will also be able to access an additional $10,000 from 1 July 2020, for another three months. These payments would not impact other benefits the individual receives including Centrelink and Veterans’ Affairs payments.
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The Federal Government will also establish a guarantee scheme to help boost lender confidence and increase small and medium business entities access to working capital. Under the scheme, the Government will guarantee up to 50 percent of new loans issued by lenders, providing $40 billion worth of investment. Eligible SMEs will have access to $250,000 in unsecured finance for up to three years with no repayments for six months.
These 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.
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To keep updated on Government COVID-19 support, visit our dedicated COVID-19 support page here
