The Commonwealth Government has announced a third stimulus package worth $130 billion on top of the $66.1 billion and $17.6 billion stimulus packages to combat the effects of Coronavirus (COVID-19) on Australia’s economy. The raft of measures are aimed at supporting business investment, cash flow assistance, providing assistance for severely affected regions, support for households including casuals, sole-traders, retirees and those on income support, assistance for businesses to keep people in a job and regulatory protection and financial support for businesses to stay in business which will be rolled out in the coming weeks and months.
Support for Business
The Government has announced a $130 billion JobKeeper payment to help keep more Australians in jobs and support businesses affected by the significant economic impact caused by the Coronavirus. Around six million workers will receive a fortnightly payment of $1,500 (before tax) through their employer.
- JobKeeper will be extended until 28 March 2021.
- Two-tier payments will apply:
- Between 28 September 2020 and 3 January 2021 payments of $1200. Employees working less than 20 hours a week will receive $750.
- Between 4 January 2021 to 28 March 2021 payments of $1000. Employees working less than 20 hours a week will receive $650.
- Reduction of turnover tests remains at 30% for small to medium-sized businesses and 50% for large businesses.
- JobKeeper qualification is reapplied at the end of September 2020 and beginning of January 2021.
- On August 7, the Government announced further changes to the JobKeeper payment including the reference date for determining employee eligibility for the existing scheme and the extension.
As at 22 March, the Government is now providing up to $100,000 to eligible small and medium sized businesses, and not-for-profits (including charities) that employ people with a minimum payment of $20,000. 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.
Increasing the Instant Asset Write-Off (IAWO)
The Instant Asset Write-Off threshold has been increased from $30,000 to $150,000 and access has been expanded to include businesses with aggregated annual turnover of less than $500 million (up from $50 million). This applies from 12 March 2020 until 30 June 2020 for new or second-hand assets first used or installed ready for use in this time frame.
Backing Business Investment (BBI)
A time limited 15-month investment incentive to support business investment and economic growth over the short term by accelerating depreciation deductions. This applies to eligible assets acquired from 12 March 2020 and first used or installed by 30 June 2021. Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.
Coronavirus SME Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the Coronavirus. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.
Providing Temporary Relief for Financially Distressed Businesses
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent. The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the Coronavirus.
Supporting Apprentices and Trainees
If you employ an apprentice or trainee, you may be eligible for a wage subsidy of 50% of their wage paid from 1 January 2020 to 30 September 2020. You can register for the subsidy from early April 2020.
Measure to Help Renters
The Prime Minister also announced new measures to help renters. Under these measures, evictions will be put on hold over the next six months for commercial and residential tenants in financial distress, who are unable to meet their commitments due to the impact of the Coronavirus.
Severely Affected Regions and Sectors – Relief and Recovery Fund
The Government has set aside $1 billion to support communities, regions and industries most significantly affected by the coronavirus. These funds will be available to assist during the outbreak and to help with the recovery.
The Government is providing vital support for not-for-profits (NFPs) to withstand the economic impacts of the Coronavirus.
The Government is providing vital support to sole traders to withstand the economic impacts of the Coronavirus.
For more information visit Economic Response to the Coronavirus
Support for Individual and Households
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. The Coronavirus Supplement of $550 per fortnight is available until 24 September 2020. Beyond this date, the Coronavirus Supplement will be available at $250 per fortnight until 31 December 2020.
You will be paid the Coronavirus Supplement if you receive income support under JobSeeker Payment, Youth Allowance , Parenting Payment (Partnered or Single), Austudy, ABSTUDY (Living Allowance), Farm Household Allowance, Special Benefit or Department of Veteran’s Affairs Education Scheme, or if you are an Eligible New Enterprise Incentive Scheme participant.
Australians applying for Centrelink can now get support if their partner earns up to $79,762, Scott Morrison announced on Monday. The PM said the government has boosted the threshold from about $48,000, which would allow more Australians to receive support during the Coronavirus pandemic. The change means an applicant’s rate of welfare won’t be affected unless their partner earns more than $79,762 a year.
From 25 September 2020, the asset test and Liquid Assets Waiting Period will be reintroduced. The Ordinary Waiting Period, Newly Arrived Resident’s Waiting Period and Seasonal Work Preclusion Period will continue to be waived until 31 December 2020.
HomeBuilder provides eligible owner-occupiers (including first home buyers) with a grant of $25,000 to build a new home or substantially renovate an existing home. HomeBuilder will assist the residential construction market by encouraging the commencement of new home builds and renovations.
Early Release of Superannuation
The Government will allow individuals in financial stress as a result of the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Temporarily Reduce Superannuation Minimum Drawdown Rates
The Government is temporarily reducing superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
Reducing Social Security Deeming Rates
On top of the deeming rate changes made at the time of the first package, the Government is reducing the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA.
As of 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent. The change will benefit around 900,000 income support recipients, including Age Pensioners.
For more information visit Support for Individual and Households