Federal Government COVID-19 Support Packages
Updated 8 April 2020
Following is a summary of the business and household support offered across the Federal Government stimulus packages.
Under the scheme, the Government will provide a wage subsidy to around six million workers who will receive a flat payment of $1,500 per fortnight through their employer, before tax. Eligible employers will be able to claim the fortnightly payment of $1,500 (equivalent of 70% of the national median wage) per eligible employee from 30 March, for a maximum of six months.
Boosting cash flow for employers
From 28 April, small, medium and not-for-profit businesses of less than $50 million turnover will receive between $20,000 and $100,000 to assist cash flow. The payments will be linked to staff wage tax withholdings to incentivise businesses to retain employees.
All you need to do is lodge your upcoming activity statements. March and quarter three activities should be lodged on their due date (and not before) to ensure you receive the maximum refund available.
Payments are linked to the ATO and will be made automatically over the next six months.
An additional payment will be made from 28 July. Eligible businesses will receive a payment “equal to the total of all of the Boosting Cash Flow for Employers payments received”.
Boosting cash flow for business (first package)
Provides up to $25,000 back to small and medium-sized businesses, with a minimum payment of $2,000 for eligible businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff. The payment will be tax free.
Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.
- The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
- Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000.
- Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.
This will be applied for a limited number of activity statement lodgements. The ATO will deliver the payment as a credit to the business upon lodgement of their activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.
Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020. Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (150 per cent) in the March 2020 activity statement. The minimum payment will be applied to the business’ first lodgement.
Coronavirus SME Guarantee Scheme
The Government will guarantee 50% of new loans issued by eligible lenders to small and medium businesses. To support $40 billion in lending, the Government will guarantee up to $20 billion to provide businesses with faster access to working capital.
Increasing the instant asset write-off (first package)
Immediately increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding the turnover requirement from $50 million to include businesses with turnover less than $500 million.
Business investment incentive (first package)
Immediately offering a time-limited 15 month investment incentive between now and 30 June 2021. 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, with existing depreciation rules applying to the balance of the asset’s cost.
Relief for financially distressed businesses
The insolvency threshold will be increased from $2000 to $20,000 and companies with receive 6 months to respond instead of 21 days. Directors will similarly be protected for 6 months to assist with trading through this period.
Wage assistance for apprentices and trainees (first package)
Offering a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for nine months. The subsidy of up to a maximum of $21,000, will be available to businesses employing fewer than 20 full-time employees who retain an apprentice or trainee, or, where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.
Support for the aviation industry
The Federal Government will provide up to $715 million in support for Australian airlines and airports to assist with cashflow.
AGMs in person will be suspended for companies
Treasurer will now have special powers to address.
For further information, refer to the following Business.gov.au resources:
The Government announced on 2 April that around one million families will be set to receive free child care during the COVID-19 pandemic. The Government will pay 50 per cent of the sector’s fee revenue up to the existing hourly rate cap based on a point in time before parents started withdrawing their children in large numbers. The package will support the childcare sector and allow parents in essential services to continue working.
The funding will apply from 6 April based on the number of children who were in care during the fortnight leading into 2 March. The system will be reviewed after one month and an extension will be considered after three months.
$550 coronavirus supplement
Eligible recipients of JobSeeker, Youth Allowance, Parenting Payment, Farm Household Allowance and Special Benefit payments will receive an additional $550 supplement each fortnight. It is available where people have earned less than $1100 a fortnight.
$750 household payment
A second payment will be made automatically from 13 July to those on income support (social security and veteran income payments) that are not eligible for the COVID-19 supplement. The first payment will be made from 31 March
Early release of superannuation
Individuals in financial stress as a result of COVID-19 can access up to $10,000 of their super this financial year and another $10,000 next financial year. Eligible people include sole traders and casuals who have had a 20% or more reduction in income.
Reduced minimum superannuation draw down for retirees
For the next two financial years, retirees are now only required to draw down 2% of their super to provide greater flexibility in managing ther assets.
Reducing social security deeming rate
The Federal Government is reducing deeming rates by 0.25% points from the first package. The change will benefit around 900,000 income support recipients.
One-off stimulus payment (first package)
- Provides a one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders.
- There will be one payment per eligible recipient. For example, if a person qualifies for the one-off payment in multiple ways, they will only receive one payment.
- The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments.
- The one-off payment will be paid from 31 March 2020.
The Federal Government announcements are in addition to those presented by State Governments.
Most of these measures will be rolled out over the next six months. While some assistance will be provided immediately, may will commence from April once legislation is passed.
Further information about the Government’s response can be found at: treasury.gov.au/coronavirus