26 Mar 2020

In the past week the Australian Government announced changes to its Economic Stimulus Package including increased support for businesses and a range of relief aimed at households and individuals.

Here we have listed some of what is now available and what could potentially assist you, your family and business during these difficult times.

Early Access to Superannuation

  • The Government has announced that eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020
  • Individuals will also be able to access a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation)
  • To be eligible you must satisfy any one or more of the following criteria:
    • To apply for early release you must satisfy any one or more of the following requirements:
      • you are unemployed; or
      • you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
      • on or after 1 January 2020: you were made redundant; or
      • your working hours were reduced by 20 per cent or more; or
    • if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20% or more

Income Support for Individuals

  • The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months.

Payments to Support Households

  • The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made on the 31st of March 2020 and the second payment made on the 13th of July 2020.

Providing Support for Retirees

  • The Government is temporarily reducing the superannuation minimum drawdown requirements for account-based pensions and similar products to 2%
  • The Government is also reducing both the upper and lower social security deeming rates by a further 0.25 percentage points in addition to the 0.5 percentage point reduction to both rates announced on 12 March 2020.

Supporting the Flow of Credit

  • The Government will provide a guarantee of 50% to Small Business lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in Small Business being able to access additional funding to help support them through the upcoming months
  • Small Businesses with a turnover of up to $50 million will be eligible to receive these loans
  • The Government will provide eligible lenders with a guarantee for loans with the following terms:
    • Maximum total size of loans of $250,000 per borrower
    • The loans will be up to three years, with an initial six-month repayment holiday
    • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan

Boosting Cash flow for Employers

  • The Government is now providing relief to eligible small and medium sized businesses that employ workers
  • To be eligible your business must:
    • Have an aggregate annual turnover under $50 million and employ workers
    • Be registered for PAYWG prior to the 12th of March 2020
  • Eligible employers that withhold tax from their employees salary and wages will receive a payment equal to 100% of the amount withheld, up to a maximum of $50,000
  • The minimum payment is $10,000 even if you are not required to withhold tax i.e. your employees wage is under the tax free threshold
  • For quarterly lodgements this payment will be made upon lodgement of the March and June 2020 Activity Statements
  • For monthly lodgers payments will be made based on the March monthly lodgement and be equal to 3 times the March withholding along with payments made in April, May and June
  • The payment will be delivered as an automatic credit in the Activity Statement account and where a refund results, be paid out within 14 days

Additional Boosting Payment

  • The Government has also announced an additional Boosting payment to be applied to lodgements from June to September
  • Eligible entities (same criteria as above) will receive an additional payment equal to the total of the above payments they have received
  • This means eligible businesses can now receive a minimum of $20,000 and up to a total of $100,000 between the two measures

For more information on any of the above visit treasury.gov.au/coronavirus.

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