March 23rd, 2020
Australian Government Second Round Stimulus Package
Yesterday (22 March 2020) the Australian Government announced a second stimulus round valued at $66 billion. This round is geared towards individuals, households and small businesses, and will give many music industry folk some much needed relief.
Keep in mind these measures are subject to passing of the legislation by government and there will be more detail announced in time. Make sure you contact your Accountant or Business Manager to discuss eligibility for yourself or your business.
SUPPORT FOR INDIVIDUALS AND HOUSEHOLDS
- Income support for individuals
Individuals affected by the coronavirus crisis can receive a temporary ‘coronavirus supplement’ at a rate of $550 per fortnight for six months.
This will be available to existing and new recipients of Newstart, JobSeeker Payments, Youth Allowance, Parenting Payments, Farm Household Allowance and Special Benefit.Sole traders and casual workers who are currently earning less than $1,075 a fortnight will be eligible to receive this supplement also.
- Payments to support households
Two separate $750 payments will be made available to social security, veteran and other income support recipients and eligible concession card holders. The first payment (which was announced as part of the first stimulus package) will be made from 31 March 2020 and the second payment will be made from 13 July 2020.
- Temporary early release of superannuation
Individuals whose financial situation has been affected by the coronavirus crisis will be able to access up to $10,000 of their superannuation before 30 June 2020, and a further $10,000 after 1 July 2020.
SUPPORT FOR BUSINESSES
Boosting Cash Flow for Employers
This temporary cashflow measure provides up to $100,000 tax free to employers (with a minimum payment of $20,000) to eligible small and medium sized businesses (including not for profits). Businesses that employ workers and have a turnover of less than $50 million will be eligible.
The payment will be facilitated through a credit on the business’ activity statements from 28 April 2020. Eligible employers that withhold tax to the ATO on their employee’s wages will receive a credit of 100% of the tax withheld up to a maximum of $50,000, with a minimum of $10,000.
The same will apply to the July – October period, making up the total of $20,000 to $100,000 credit.
Where this credit places the employer in a refund position, the ATO will deliver the refund within 14 days.
Supporting apprentices and trainees
Eligible employers can apply for a wage subsidy of 50% of the apprentice or trainees’ wages (up to $21,000) for 9 months from 1st January 2020 to 30th September 2020.
HELP FROM THE ATO
The ATO is providing support for businesses having difficulties meeting tax obligations because of COVID-19.
- Payment deferrals
The ATO will work with affected businesses to defer payments and instalments of income tax, activity statements, PAYG instalments, FBT and excise payments by up to six months.
- Move to monthly reporting
Businesses that have a turnover of less than $20 million and are reporting quarterly and are due a GST refund will have the option to move to monthly reporting to get quicker access to the refunds. The change needs to be made at the beginning of the quarter so a change now will take affect from 1 April 2020.
- PAYG instalments (Income Tax)
Quarterly PAYG instalment payers will have the option to vary their PAYG Income Tax instalments on their activity statement for the March 2020 quarter and also claim a refund for any instalments made for September 2019 and December 2019 quarters.
The ATO will not apply penalties or charge interest to varied instalments for the 2019-2020 financial year.Businesses that lodge monthly can contact the ATO to get access to the same concessions.
- Interest and penalties
For businesses affected by COVID-19 the ATO will consider remitting interest and penalties incurred after 23 January 2020.
- Low interest payment plans
Businesses affected can contact the ATO for assistance with existing and ongoing tax liabilities by entering a low interest payment plan.
SUPPORTING THE FLOW OF CREDIT
- Support for immediate cash flow needs for SME’s – 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.
- Access to credit for small businesses – there will be a temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers.
- Business loan repayment deferral – businesses affected will be able to access a six-month deferral of all loan repayments.
STATE GOVERNMENT STIMULUS
The state governments are providing their own stimulus packages which include Payroll Tax relief. These are expected to become clearer over the coming days and we will update you as we learn more.
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