The Federal Government on Sunday announced a second stimulus package due to the Coronavirus and its significant impact on society and business. These measures in total aim to inject $189 Billion into the economy in an effort to mitigate as much damage or downturn as much as possible.
Briefly the new details announced:
Casuals And Sole Traders
If you receive or are receiving an eligible income support payment (Jobseeker, Youth Allowance, Parenting Payment, etc) or are an Apprentice who has been stood down, you could receive a Coronavirus supplement of $550 a fortnight for the next six months, applying from 27 April 2020.
If you are making less than $1075 a fortnight you should be eligible for the full supplement.
From mid-April 2020 you will be able to apply to have $10,000 withdrawn from super and another $10,000 in the 2021 year, tax free, if you satisfy one or more of the following requirements: are unemployed, are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance, or on or after 1 January 2020 you were made redundant, or had your working hours reduced by 20% or more, or if you were a sole trader, your business was suspended or you have seen a reduction in your turnover by 20% or more. Applications will need to be made through MyGov however those with SMSF’s will need to apply through the ATO website, details of which are still to come.
The Government is also going to temporarily reduce the minimum drawdown requirements for account-based pensions and similar products by 50%. This will apply for the 2020 and 2021 tax years. As an example, if you are under 65 and currently required to draw down 4% of the pension balance at year start, you will now only need to draw down 2% to satisfy the minimum pension requirements for those years.
A Second $750 One Off Payment
If you’re not eligible for the Coronavirus supplement, in addition to the $750 stimulus payment announced last week, another $750 will be paid automatically from July 13 to those people on the age pension, social security, veteran and other income support recipients and eligible concession card holders.
From the beginning of May, the deeming rates will be reduced by a further 0.25%, meaning more people should have access to an income support payment (such as the age pension) or receive further fortnightly funds as a result of this lowering.
Businesses Who Employ Staff
Not for profits and small businesses with a turnover under $50 million will receive a tax-free cash payment of up to $100,000 instead of the maximum $25,000 announced last week, with the minimum being raised from $2,000 to $20,000. Also increased is the amount of withholding tax credited back, this has increased from 50% to $100% of amounts reported.
Note these payments are effectible broken into two, the first half applying from 28th April 2020 and the second applying from 28 July 2020. The timing of payment is different depending on whether you lodge monthly or quarter withholding.
Our current understanding is that to qualify for this you needed to have been an active eligible employer prior to 12th March 2020 and continue to be one.
This payment is an attempt to give businesses an incentive to retain more of their employees during these tough times.
Government Guaranteed Loans
The government will guarantee up to $20 billion to support $40 billion in small business loans in addition to other funds made available by the Reserve Bank to banking institutions last week. Loans would still be processed through banks and mortgage brokers as per usual, the only difference is that this would hopefully allow more banks to approve loans given 50% is guaranteed by the Federal Government.
The Qld government has announced a 12 month interest free loan of up to $250,000 for small businesses to retain staff. You can go to www.qrida.qld.gov.au to find out how you can apply for this. Applications will be opening shortly they have advised.
The government has announced that there may be more measures introduced in the coming week or weeks, of which will likely be urgently needed to assist people and businesses through this crisis.
Stay safe everyone and if would like to discuss any of the above we can be contacted on 07 3808 5144. We here at Ignite are happy to assist as many people and businesses as we can through these troubled times.