The Federal Government has announced a number of Stimulus Packages to support businesses and people during the COVID-19 pandemic.
Stimulus Package 1:
The Federal Government announced Stage 1 stimulus measures in response to Coronavirus. See below some information relating to these packages.
$1 billion to a ‘regional and community fund’ to support industries affected by the economic fallout of COVID-19 including agriculture
Small businesses with apprentices: 50% wage subsidy for apprentices up to $21,000 to keep apprentices in work through wage subsidies - 1 January 2020 to 30 September 2020
Small to medium-sized businesses: Helping small and medium-sized businesses cover the costs of employee wages and salaries (50% of PAYG withheld, with a minimum $2 000 payment and up to a cap of $25 000 over 6 months) - Covers amounts withheld between 1 January - 30 June 2020
Businesses generally (excluding the very largest): the instant asset write-off threshold raised to $150,000 and an extra depreciation discount to encourage investment - Immediately, until 30 June 2020
The measures are targeted at supporting casual workers, sole-traders, retirees and those on income support, and at enabling small businesses to retain employees and to stay in business.
The Government’s announcement can be found here and supporting fact sheets are here.
Key components of the stimulus package for households and businesses are:
Easier access to some social security payments and a supplementary payment of either $550 or $750 (depending on your welfare payment) on top of existing payments for 6 months.
Access of up to $10,000 of an individual’s superannuation in 2019-20 and a further $10,000 in 2020-21, tax free, for those in financial stress as a result of the Coronavirus.
Temporary reductions in superannuation minimum drawdown requirements for account -based pensions and similar products by 50 per cent for 2019-20 and 2020-21 for retirees. And further reductions to deeming rates by 0.25 percentage points from those announced in the Stage One package
Payments of between $20,000 and up to $100,000 to eligible SMEs and not-for profits (ie. those with an aggregated annual turnover under $50 million and that employ workers). The payments will go to employers as a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent announced in the Stage One package), with the maximum payment being increased from $25,000 to $50,000 and the minimum payment increased from $2,000 to $10,000. The payments are tax free and will flow automatically through the ATO.
The Coronavirus SME Guarantee Scheme where the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs up to $20 billion.
Temporarily increased thresholds at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands; temporary relief for directors from any personal liability for trading while insolvent; and, amendments to the Corporations Act 2001 to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the Coronavirus.
Stimulus Package 3: JobKeeper
On 30 March the Federal Government announced a $130 billion JobKeeper wage subsidy payment that will be delivered over 6 months and is designed to support businesses to keep Australians in jobs. The Government’s announcement can be found here and the fact sheet here. A summary of the subsidy is provided below:
A $1500 fortnightly payment per employee (no superannuation guarantee payment on this amount)
Eligible for workers who were on the payroll from 1 March and includes any staff who have been stood down after 1 March
Payments are available to full-time and part-time workers, sole traders, and casuals who have been with their employer for more than 12 months. Also, New Zealanders on appropriate visas (444) are eligible.
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May and will be backdated to 30 March 2020.
Employers (including non-for-profits) will be eligible for the subsidy if:
their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
the business is not subject to the Major Bank Levy
The subsidy is being facilitated by the ATO and businesses are able to register interest here.
The Jobseeker payment was also amended which means partners could earn almost $80,000 a year before they were ineligible for the payment.