The Government has announced the second stage of the coronavirus stimulus package to help the Australian economy during the unprecedented pandemic.
SMALL BUSINESS – INCREASED CASH SAVING TO MOTIVATE CONTINUING EMPLOYMENT
The PAYG Withholding tax free (offset) payment has been doubled from 50% to 100% up to a maximum of $100,000 for eligible small and medium sized business (including not-for-profits) in order to motivate employers to retain existing staff.
In effect the employer will lodge their BAS/IAS including the Withholding tax component and will then receive an ATO credit of 100% of the tax paid up to a maximum of $50,000.
- Employers will receive a “cash flow boost” credit up to 100% for their PAYG Withholdings – effectively a saving of approximately 25% of their payroll bill.
- The maximum receivable is now $50,000 for the January to June 2020 period.
- In addition, employers will receive an additional ATO credit equal to their “cash flow boost” amount received from January June 2019-2020 period. This amount will be paid in equal instalments from July – September 2020 quarter, depending on your BAS/IAS cycle.
- The payment will be available from 28 April 2020 and will flow automatically when lodging their relevant BAS/IAS.
- The minimum payment will increase from $2,000 to $10,000 for employers who don’t pay PAYG due to having part time employees under the tax threshold, but report wages on their BAS. This minimum payment will also be paid in June $5,000 and September $5,000
The Government is also offering to guarantee 50% of new loans issued by eligible lenders to SME’s, up to a maximum $250,000.
WORKERS AND HOUSEHOLDS
The Government will increase (double) income support payments to $1,100 per fortnight. This will be paid to existing and new recipients of the Job Seeker Payment, Youth Allowance, Parenting Payment, Farm Household Allowance and Special Benefit. This supplement payment of $550 per fortnight will be paid for the next 6 months.
The Government will provide an additional $750 (in addition to the $750 announced in the first stimulus package) to social security and veteran income support recipients and eligible concession card holders, excluding those who are receiving income support payments mentioned above. The second payment will be made automatically from 13 July 2020, with the first payment being made on 31 March 2020.
The Government have announced an early release of superannuation for Australian residents under financial distress. Individuals can access up to $10,000 in each of the 2019/20 and 2020/21 financial years. I.e. $10,000 now and $10,000 in July.
Application for eligible individuals is done through MyGov and will need to be done before 1 July 2020 for the 2019/20 financial year. There will be no tax payable on any amounts released.
As mentioned in our previous blog, there is no change to the apprenticeship support package for small businesses. They will be eligible for up to $21,000 per apprentice in wage assistance payments from January – September 2020.
As always, if you require any further explanation/help during these unprecedented times, please contact our office on 9266 0000.