COVID19

Information for Employers

To receive the JobKeeper Payment, employers must:

• Register an intention to apply on the ATO website and assess that they have or will experience the required turnover decline.
• Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
• Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.
• Notify all eligible employees that they are receiving the JobKeeper Payment.
• Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

Employers 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 employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.

Information for Employees

Eligible employees are employees who:

• are currently employed by the eligible employer (including those stood down or re-hired);
• were employed by the employer at 1 March 2020;
• are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
• are at least 16 years of age;
• are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
• are not in receipt of a JobKeeper Payment from another employer.

Employees will receive a notification from their employer that they are receiving the JobKeeper Payment. The majority of employees will need to do nothing further.

At a glance, the support measures are:

• Deferring by up to six months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
• Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
• Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
• Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
• Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

At a glance:

• The total loan scheme is $500,000,000,
• The maximum loan that can be applied for is $250,000, and they have a ten year term,
• The amount of the loan is determined by reference to 50% of the average of the applicants “annual wage expense” (including superannuation) over the 2018 and 2019 years. Owners salaries and drawings are also included in the “annual wage expense”,
• The loans are repayment free and interest free in year one,
• In years two and three, the loans are interest only, at a fixed rate of 2.50%,
• In years four to ten, the loans are repaid on a principal and interest basis, and
• Loans up to $100,000 are unsecured, but loans over $100,000 up to the maximum of $250,000 will require a charge to be taken over the business assets of the applicant entity.

Boosting cash flow for employers

• SMEs with aggregated annual turnovers of under $50m will now receive two payments equal to 100 per cent of their PAYG withheld on salary and wages with each maximum payment increased from $25,000 (under the first package) to $50,000, for a total maximum payment of $100,000. The first payment (capped at $50,000) will be made after 28th April and the second payment (also capped at $50,000) after 28 July 2020. Per the factsheet, these credits will automatically apply, however, we suggest that you lodge your activity statements as soon as practicable, where this results in a refund, we can contact the ATO and request that this be refunded to you as soon as possible.
• Eligible businesses that pay salary and wages but are not required to withhold tax will receive a minimum payment of $20,000, up from $2000 in the first package. The payment will be available from 28 April 2020 and, as stated in the previous stimulus update, will be paid as a credit to the business upon lodgement of their activity statements. Notwithstanding the stated availability date of the payment being announced as 28 April 2020, we recommend that clients prepare and electronically lodge their relevant BAS/IAS as soon as possible from 01 April 2020. In the event that the lodgement places your business in a “credit” situation with the ATO, we can attempt to obtain a credit for you for that refunded amount, as soon as the credit appears in your ATO account. Whilst it’s a complete unknown whether such an application will see you obtain your credit any earlier than 28 April 2020, we consider it worth a try under the circumstances.
• The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.

Supporting the flow of credit

• The Coronavirus SME Guarantee Scheme will provide support to small businesses. Under this Scheme, the Government will provide a guarantee of 50% to SME lenders for new unsecured loans to be used for working capital.
• The loans will be unsecured but used only for working capital purposes and will apply to loans granted within six months from April 1, 2020. New and existing bank customers will be able to apply for loans up to $250,000 over three years.
• Starting in early April, this will apply to eligible loans for businesses with annual turnovers of up to $50 million and will include an upfront six month freeze on repayments.

Temporary relief for financially distressed businesses

• Temporary increase to the threshold at which a creditor can take action to initiate insolvency or bankruptcy (from $2,000 to $20,000)
• Giving companies and individuals six months instead of 21 days to respond to a statutory demand.
• Relief for directors for personal liability when the company is 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.
• This relief will be provided over the next six months.
• ASIC has also released guidance on AGMs and reporting for listed entities.

Payments for households

• A further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the coronavirus supplement. This second payment will be made automatically from 13 July 2020.

Increased income support

• Temporary eligibility expansion to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
• The Coronavirus supplement will be paid for the next 6 months. Eligible income support recipients will receive the full amount of the $550 Coronavirus supplement on top of their payment each fortnight.

Early release of superannuation

• From April, individuals will be able to access their superannuation, capped at $10,000 for the 2020 financial year and a further $10,000 for the 2021 financial year. The withdrawals will be tax-free and will be made available to those eligible for the coronavirus supplement as well as sole traders who have seen that hours of work, or income fall, 20% of more as a result of the coronavirus.
• 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.

Superannuation minimum drawdown rates and social security deeming rates

• Temporary reduction to superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21.
• Reduction of 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.

If you have to self-quarantine or are admitted to hospital, if you don’t have an EPOA then no-one else can make important business or financial decisions on your behalf.

As a business owner, it is 100% essential that you have an up to date EPOA and Will, and that your family know where these are stored.

Please do not hesitate to contact us if you require assistance with updating or preparing your EPOA’s and wills. We can help you by liaising with your solicitor to ensure these important legal documents are up to date.

As a business owner, now is the time to plan for employees being away from your workplace, shortages of supply, reduction in sales, and the possibility of your workplace being closed for a short period of time if every-one is being forced to self-quarantine.

Planning for business continuity is key. Things to consider include:

• Employees working from home, and workplace obligations
• How do pay your bills in the short term if your sales start to dry up
• How to communicate in a reassuring way with your clients and customers
• How to keep things moving with your business

We’re not suggesting in any way that we have all the answers, but it is important for us to work with you and help you plan for what may transpire in the weeks and months ahead.

Please do not hesitate to contact us if you would like to discuss your current situation and would like assistance with the development and / or implementation of a Business Continuity Plan.

Cash Flow Assistance

• The Boosting Cash Flow for Employers measure will provide up to $25,000 back to businesses, with a minimum payment of $2,000 for eligible businesses.
• 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 ATO as a credit in the activity statement system from 28 April 2020 when eligible businesses lodge (see below) upcoming activity statements.
• Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% 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.

The Australian Government have released fact sheets with further information including tables and examples. Click below to view the fact sheet.

Workforce

• $7000 each quarter in wage subsidies for employers who employee less than 20 people to save the jobs of 120,000 apprentices. Subsidies will be backdated to 1 January 2020 and will run until 1 September 2020.
• Waiting times for a government sickness allowance will be waived for casual workers forced into self-isolation.

Individuals

• One-off payment of $750 to social security, veteran and other income support recipients and eligible concession cardholders to support. Over 90% of payments will be made by mid-April 2020.
• Deeming rates for pensioners cut by 50 basis points in response to the most recent decision of the Reserve Bank of Australia.

Support for regions and communities

• Initial $1b allocation to support those regions and communities that have been disproportionately affected by the economic impacts of the coronavirus – including those heavily reliant on tourism, agriculture and education.
• This will include the waiver of the Environmental Management Charge for tourism businesses that operate in the Great Barrier Reef Marine Park and the waiver of entry fees for Commonwealth National Parks. It will also include additional assistance to help businesses identify alternative export markets or supply chains.