The second stage of the $66 billion economic stimulus package and stage one restrictions were announced last night which will result in lasting effects for all Australians. Below are the key areas of the announcement and what it could mean for you and your business.
Snapshot of Announcements
|Boosting Cashflow for Small Businesses||
Up to $100,000 for eligible small and medium size businesses and not-for-profits (including charities) over two payments.
Payments of up to 100% of an employee’s salary and wages PAYG withholding will also be available. For employers who do not pay PAYG, a minimum payment of $20,000 will be available.
|SME Guarantee Scheme||The Government is guaranteeing 50% of new loans issued by eligible bank and non-bank lenders for SMEs, which will also include an upfront six month freeze on repayments.|
|Temporarily Relief for Financially Distressed Businesses||There has also been a temporary increase to the threshold to creditors taking action to initiate insolvency or bankruptcy.|
|Closures & Restrictions||
From 12.00pm Monday 23
March 2020 the following will be closed:
Restrictions will apply to:
|Accessing Superannuation for individuals, self-employed and sole traders||People experiencing financial hardship as a result of COVID-19 will be able to access $10,000 of their superannuation over the 2019-2020 and 2020-2021 financial years.|
|Superannuation Withdrawal Flexibility||A temporary decrease to the draw down for 2% and a decrease of deeming rates by a further 0.25%.|
|Other Assistance||A temporary 6-month Coronavirus supplement of $550 per fortnight, with an additional $750 payment for eligible people on government welfare support. Relaxed criteria for JobSeaker to assist sole traders and self-employed.|
Boosting Cash Flow for Employers
Following on from the first stimulus package announcement, the Government has increased their cash flow support to eligible small and medium sized business and not-for-profits (including charities) who employ staff by offering payments of up to $100,000 to help them keep operating an to retain their staff. Payments will be paid via credits which are automatically calculated by the ATO and employers will need to trigger this entitlement with the lodgement of an activity statement. If this credit puts the business in a refund position, the excess amount will be refunded by the ATO within 14 days.
The first credit payment will be made after 28 April (a maximum payment of $50,000), and the second after 28 July 2020 (for the same amount of credits as the first payment). Both payments are capped at $50,000 per payment, per employer.
For those employers not required to withhold tax, will receive a minimum payment of $20,000 as two payments of $10,000. This payment will be available from 28 April 2020 as a credit to the business upon lodgement of the activity statement.
Small and Medium Enterprise (SME) Guarantee Scheme
Starting in early April, the Government has committed to guaranteeing 50% of new loans issued by eligible bank and non-bank lenders for SMEs, which will also include an upfront six month freeze on repayments. The loans will be unsecured and will need to be used only for working capital purposes.
To be eligible, the loans must be granted within six months from April 1, 2020. New and existing bank customers will be able to apply for loans up to $250,000 over three years.
Temporarily Relief for Financially Distressed Businesses
There has also been a temporary increase to the threshold to creditors taking action to initiate insolvency or bankruptcy. This has been increased from $2,000 to $20,000 and includes a response time increase from 21 days to six months for companies and individuals. In the event of a company becoming insolvent, there is also relief from Directors for personal liability if this happens while the company is still trading.
Closures & Restrictions
In a bid to enforce social distancing , the Government has taken drastic action to enforce this rule by closing many of the popular gathering spaces for up to a period of six months, with revaluations to be made each month.
From 12noon today, 23 March 2020, the following industries will be closed:
- Night clubs (excluding bottle shops);
- Hotels (excluding accommodation);
- Gyms and indoor sporting venues;
- Cinemas and entertainment venues; and
Also affected are restaurants and cafes which will be restricted to takeaway and home delivery services only. Furthermore, religious gatherings, places of worship or funerals must be held in very small groups where the one person every four-square meter rule applies.
It is expected that this will not be a short-term measure to help prevent the spread of COVID-19 and Australians are being urged to also adhere by current guidelines of:
- No non-essential gatherings of more than 500 people outside or more than 100 people inside.
- All non-essential indoor gatherings of less than 100 people must have no more than one person per 4sqm. This includes all local businesses.
- Social distancing (1.5 meters between yourself and others) should be kept;
- Avoid non-essential travel
- Schools are open as usual (with the exception of Victorian schools which are closed).
It’s no surprise that these are uncertain times for all Australians, with those in small and medium business feeling the full effects of Coronavirus. The Government has released their second round of stimulus package focused on helping Australians who are in business to continue to run and keep their staff employed throughout this time.
For those experiencing financial hardship brought on by this pandemic, eligible individuals, self-employed and sole traders will be able to access up to $10,000 from their superannuation in both the 2019-2020 and 2020-2021 financial years. To be eligible, for this early access, you must meet at least one of the following criteria:
- You’re unemployed;
- You’re eligible to get a job seeker benefit, youth allowance for jobseekers, parenting payment or farm household allowance;
- You’ve been made redundant or had your working hours reduced by 20% or more since 1 January 2020; or
- You’re a sole trader and you’ve had to pause your business operations, or your turnover has fallen by 20% or more, since 1 January 2020.
If you are eligible, you will need to apply online through myGov to access up to $10,000 Eligible individuals will be able to apply online through myGov for access of up to $10,000 of your superannuation before 1 July 2020. You will also be able to access up to a further $10,000 from 1 July 2020 for another three months. No tax will need to be paid on these amounts and withdrawn amounts will not affect Centrelink or Veran’s Affair payments.
Superannuation Withdrawal Flexibility
The Government is also giving retirees more flexibility over their superannuation assets. Currently, retirees are required to draw down a minimum of 4% a year from their superannuation. However, this has temporarily been halved to 2%.
The deeming rates have been decreased by a further 0.25% to reflect the reductions by the Reserve Bank of Australia from last week. From 1 May 2020, the lower deeming rate will be 0.25%, with the upper deeming rate of 2.25%.
Outside of the above incentives and restrictions, there will also be a temporary six-month Coronavirus supplement of $550 per fortnight paid to those existing and new recipients of the following payments which will be paid on top of regular fortnightly payments:
- JobSeaker Payment (previously Newstart);
- Youth Allowance jobseeker;
- Parenting Payment;
- Farm Household Allowance; and
- Special Benefit.
Furthermore, there will be an additional $750 payment for eligible people on government welfare support who are not receiving the Coronavirus supplement payment. This second payment will automatically be paid on 13 July 2020.
Furthermore, the eligibility criteria to access income support payments will be relaxed to enable the self-employed and sole traders have had their income has reduced as a result of COVID-19 to access financial assistance, such as JobSeaker and the Coronavirus supplement.
In these uncertain times, esg电竞比分详情 is here to help. If you have any questions about the above and how they may effect you and your buisness, please feel free to contact us , book in for a phone meeting or call our office on 07 3367 3155.