Coronavirus Stimulus Package
March 13, 2020
As the world grapples with the economic impact of the Coronavirus, the Australian Government yesterday announced their economic response to the threat, which we have summarised below. The government has also confirmed that the surplus it had planned to deliver is extremely unlikely to be achieved.
With various reports of the mortality rate, it seems one of the most dangerous parts of Covid-19 is its ability to disrupt entire economies. With less people willing to spend the likely loser will be businesses both small and large.
The government’s response is to attempt to keep people spending and the economy going by providing a similar stimulus to the accelerated depreciation and cash payments made during the GFC. Please see below for some more specifics on what we can expect.
$25,000 payment for Small BusinessEntities with aggregated turnover under $50m who employ workers may be eligible to receive up to $25,000. These payments will be made via a credit in your Business Activity Statement (“BAS”) or Installment Activity Statement (“IAS”) in the March to June periods.
If you lodge quarterly, then this will happen in the March and June BAS. If you lodge monthly, this will be for your March, April, May and June BAS.
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. Therefore if your business withholds over $50,000 between March and June, you would be entitled to the full amount.
Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.
Supporting Apprentices and TraineesThe Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020. Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy. Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.
Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020.
Increasing the Instant Asset Write OffThe Government will increase the instant asset write off from $30,000 to $150,000 and expand to any business with turnover under $500m until 30 June 2020. This vastly increases the instant asset write off and allows larger corporate entities to benefit from bringing forward asset purchases.
Accelerated DepreciationFor any depreciating assets bought by businesses with a turnover under $500m, they may be eligible to accelerate the depreciation by getting 50% of the value deducted straight away with the balance to be depreciated as per normal rules. This will target asset purchases over the new instant asset write off limit of $150,000.
Stimulus PaymentsThe Government will provide a one-off $750 payment to social security, veteran and other income support recipients and eligible concession card holders. If a person qualifies for the one-off payment in multiple ways, they will only receive one payment.
To be eligible, you must be residing in Australia and be receiving one of the following payments or hold one of the following concession cards on 12 March 2020:
• Age Pension
• Disability Support Pension
• Carer Payment
• Parenting Payment
• Wife Pension
• Widow B Pension
• ABSTUDY (Living Allowance)
• Bereavement Allowance
• Newstart Allowance
• Youth Allowance
• Partner Allowance
• Sickness Allowance
• Special Benefit
• Widow Allowance
• Family Tax Benefit, including Double Orphan Pension
• Carer Allowance
• Pensioner Concession Card holders
• Commonwealth Seniors Health Card holders
• Veteran Service Pension; Veteran Income Support Supplement; Veteran Compensation payments, including lump sum payments; War Widow(er) Pension; and Veteran Payment
• Veteran Gold Card holders
• Farm Household Allowance
As always, if you have any questions or want to get in touch feel free to email us at: firstname.lastname@example.org
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