Since the initial announcement on the 12th of March 2020 the Government has announced a second $66billion stimulus package in response to COVID-19. We’ve outlined some key points below:
Boosting Cashflow for Employers
Employers with a turnover under $50 million are eligible for a two staged cash flow boost.
If you pay wages in the March and June 2020 quarters and deduct PAYGWH tax from your employees wages you will be entitled to claim a credit against your BAS an amount equal to 100% of the PAYGWH payment to a maximum of $50,000.
Even if you have wages to pay and don’t need to withhold any tax the credit will be $10,000. Employers who remit their PAYGWH on a monthly basis will be eligible for a multiple of 3 times their March month withholding and then credits on a dollar for dollar basis for the months in the June Quarter.
The second stage of the boost will provide quarterly reporters an amount equal to their March and June BAS PAYGWH to be paid half on the June BAS and half on the September 2020 BAS. Monthly remitters will receive a credit of a quarter on the March to June amount on their June, July, August and September Activity Statements. Yes you will be entitled to a double credit on the June BAS return.
The credits available are up to $100,000 in total. These amounts will be applied to your quarterly or monthly activity statements as a credit against your GST and PAYGWH payments and may result in a cash refund to you.
As previously advised, employers with less than 20 FTE staff are able to claim a credit of up to 50% to a maximum of $7,000 per quarter as a rebate for retaining apprentices and trainees who were employed before the 12th of March 2020 This will be paid for each of the March, June and September quarters (maximum $21,000 per apprentice or trainee). This will include also cover re-engaging an apprentice from another business.
Asset Write-off Increases for Businesses with a Turnover of less than $500 million
(as previously advised)
Businesses are eligible to claim a 100% deduction for new or used plant and equipment costing less than $150,000 acquired between the 12th of March and the 30th of June 2020.
Businesses who acquire new plant between the 12th of March 2020 and the 30th of June 2021 will be eligible to claim and upfront tax deduction of 50% of the cost price of the item and then regular depreciation on the remaining cost. This covers items that exceed the $150,000 threshold for the 2020 year
For both of these incentives the items must be ordered and installed ready for use between the described dates and any prior contracts are ineligible.
Cash Flow Requirements
The government will provide a guarantee up to 50% to financial institutions on behalf of borrowers on loans up to $250,000.
Any borrowings under this scheme are still required to meet lenders eligibility criteria.
Additional Income Support Payments
A Coronavirus supplement of $550 per fortnight and is available for those on support payments and is an additional payment.
Access to support payments will be extended to permanent employees who are stood down or lose their jobs, sole traders and the self-employed and casual workers who meet the income test requirements.
Means testing, the waiting period and the liquid assets test period will be waived for the supplement period. Contact us if you require any further information.
Temporary Early Release of Superannuation
Individuals who are unemployed, receive a eligible government payment, have been made redundant, have had their hours reduced by 20% or more or are a sole trader with reduction of turnover of 20% or more are able to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. These withdrawals are tax free and will not affect any Centrelink payments.
The Government is temporarily reducing the minimum pensions drawdowns for those in Pension Mode to half of the set rates for any pensions that have yet to be drawn for the year. Unfortunately if you have already drawn your minimum you can’t repay that amount.