12 | PANDEMIC SOLUTIONS
Surviving the impacts of COVID-19 By Juston Jirwander B.Bus, CA Associate Director – Bishop Collins.
T
he Federal government and every State and Territory government of Australia, have announced multiple stimulus and relief packages. Updates and changes have been announced every week since the beginning of March. It is not surprising that many business leaders are confused and unsure what they are eligible for and how they can access these stimulus packages and when they might need them. Getting access to this stimulus at the right time could mean life or death for many businesses so we have summarized the various levels of relief from all levels of government, Australian Taxation Office and Banks.
FEDERAL GOVERNMENT STIMULUS The Australian Government has announced three stimulus packages as an economic response to the Coronavirus. The Government’s economic response targets three key areas: 1. Support for businesses 2. Supporting the flow of credit 3. Support for individuals and households – Not covered in this article
Eligible Employers
Payment Process
There are a number of criteria which need to be satisfied with one of the key criteria being a reduction in comparative revenue. Employers will be eligible If, at the time of applying: l their business has an annual turnover of less than $1 billion and they estimate their turnover has fallen or will likely fall by 30 per cent or more; or l their business has an annual turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with turnover of $1 billion or more) and they estimate their turnover has fallen or will likely fall by 50 per cent or more; and l For charities and Not-For-Profit, they will be eligible for the subsidy if they estimate their turnover has or will likely fall by 15 per cent or more. The Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been significantly affected by the impacts of the Coronavirus. There will be some tolerance where employers, in good faith, estimate a greater than 30 (or 50) per cent fall in turnover but actually experience a slightly smaller fall.
The JobKeeper payment to employers will be made monthly in arrears by the ATO.
SUPPORT FOR BUSINESSES
Eligible Employees
JobKeeper Payment
Eligible employees are employees who: l are currently employed (including those stood down or re-hired); l were employed by the employer at 1 March 2020; l 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); l are at least 16 years of age; l are an Australian citizen, and l are not in receipt of a JobKeeper Payment from another employer.
Under the JobKeeper Payment, businesses significantly impacted by the Coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees. l The JobKeeper Payment is a temporary scheme. l The JobKeeper Payment will also be available to the self-employed. l The Government will provide $1,500 per fortnight per employee for up to 6 months. l The subsidy will start from 31 March 2020 l First payment to be received by employers in the first week of May.
INSIDER 113 JUNE / JULY 2020
Application Process Eligible employers will be able to apply for the scheme by means of an online application via ato.gov.au
Boosting Cash Flow for Employers The Government is providing up to $100,000 to eligible small and mediumsized enterprises (SME), sole traders and not-for-profits (NFPs) that employ people, with a minimum payment of $20,000. SME with aggregated annual turnover under $50 million that employ workers are eligible. ROUND 1 : Under the enhanced scheme, employers will receive a payment of 100 per cent of their salary and wages withheld for the period 1 January to 30 June 2020. The maximum payment for this period is $50,000 and the minimum payment is $10,000. ROUND 2: An additional payment is also being introduced in the July — October 2020 period. Eligible entities will receive an additional payment equal to the total of the first round of payments.
Increasing the instant asset write-off The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. This proposal applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used or installed ready for use in this timeframe.
Backing Business Investment (BBI) The Government is introducing a time-limited 15 month investment incentive (through to 30 June 2021) by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
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