Support for businesses impacted by COVID-19
Updated 24 March 2020
Enhancing the instant asset write-off
The government is increasing the instant asset write-off (IAWO) 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).
Boosting Cash Flow for Employers
The Government is enhancing the Boosting Cash Flow for Employers measure it announced on 12 March 2020. The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not-for-profits (NFPs) that employ people, with a minimum payment of $20,000.
These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff. Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible. NFPs, including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible.
This will support employment at a time where NFPs are facing increasing demand for services. Under the enhanced scheme, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.
The payments will be delivered by the Tax Office as a credit on activity statements from late April. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.
Businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
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% relative to a comparable period a year ago (of at least a month).
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);
Employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020. The first payment will be received by employers from the ATO in the first week of May.
Supporting apprentices and trainees
The 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 for up to 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 that employs that apprentice.
Banks to defer loan payments
Banks have announced relief packages for coronavirus-impacted small businesses. The banking industry has stepped forward today with an $8 billion, six-month lifeline to small businesses.
Small businesses affected by the impact of coronavirus will have loan repayments deferred for six months. This applies to any small business affected, regardless of industry, for any loan associated with the business. All they have to do is register their need with their bank.
Payroll tax relief package
The Queensland Payroll tax support package is now available for all businesses registered for payroll tax in Queensland. Businesses who apply will have their payment obligations deferred until 31 July 2020.
Read more about deferring payroll tax returns due to coronavirus.
Coronavirus SME Guarantee Scheme
The Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. SMEs with a turnover of up to $50 million will be eligible to receive these loans.
The Government will provide eligible lenders with a guarantee for loans with the following terms:
Maximum total size of loans of $250,000 per borrower.The loans will be up to 3 years, with an initial 6 month repayment holiday.The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
Read more here: Coronavirus SME Guarantee Scheme
- The Reserve Bank cut interest rates to 0.25 per cent, the lowest level in Australia’s history.
- Reserve Bank will also buy government bonds, set up a three-year $90 billion fund for banks to keep small- and medium-sized businesses open, and ease regulatory pressure on banks.
- Government will give smaller lenders $15 billion to allow customers to continue accessing credit.
- The RBA said it would also provide at least $90 billion at 0.25 per cent over three years to banks if they lend that cash to small and medium-sized businesses.
Queensland COVID-19 Jobs Support Loans
Applications are now open for the Queensland Government’s $500 million COVID-19 Jobs Support Loan scheme. Low interest loans of up to $250,000 are available to assist with carry-on expenses such as employee wages, rent and rates and other related expenditure. Eligible business types include sole traders, partnerships, private and public companies and Trusts. All COVID-19 Jobs Support Loans will be provided for a term of 10 years, with no repayments or interest charged for the first year, followed by two years of interest only payments. Principal and interest repayments will commence from the third year for the remainder of the loan term.
Red more by visiting Queensland COVID-19 Jobs Support Loans
Support for individuals and households
Income support for individuals
Over the next six months, 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. This will be paid to both existing and new recipients of Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
Payments to support households
The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020. Around half of those that benefit are pensioners. The second payment will not be made to those eligible for the Coronavirus supplement.
Temporary early release of superannuation
The Government is allowing individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Temporarily reducing 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 with account-based pensions and similar products by reducing the need to sell investment assets to fund minimum drawdown requirements.
Reducing social security deeming rates
On 12 March, the Government announced a 0.5 percentage point reduction in both the upper and lower social security deeming rates. The Government will now reduce these rates by another 0.25 percentage points. As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent.
Financial Assistance and Grants Available
Important Coronavirus information from the Department of Health
Official advice is to follow these simple steps to help slow the spread of the virus and to reduce the risk of infection:
- Wash your hands with soap and water before and after eating, and also after using the toilet
- Avoid physical contact with others when possible
- Cough into your elbow or into a clean tissue, then throw the tissue in the bin
- Seek medical attention if you’re feeling sick. Be aware that most people currently experiencing cold and flu symptoms won’t have COVID-19