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Stimulus Relief Packages - links to more detailed information below

A number of measures have been announced to support Australians and the economy in response to the Coronavirus.

We have put together some information to summarise the key measures and to assist you in understanding the help that could be available to you.

When will these announced measures be implemented?

The Government wishes to implement many of their stimulus measures as soon as possible and a package of Bills will be introduced into Parliament in the final Autumn sitting week (23 – 26 March 2020) as legislation needs to pass to give effect to these proposals. These Bills will provide more detail on the announced measures.

Outlined below is a summary of some of the key measures announced.

Business investment

Small business loans – relief package

Australian banks will provide support to eligible small businesses by deferring loan payments for up to six months, where assistance is required as a result of COVID-19. The intention is for banks to implement this as soon as possible.

Coronavirus Guarantee Scheme

The Coronavirus Guarantee Scheme will provide a Government guarantee of 50% of the value of new loans issued by eligible lenders to small and medium sized businesses. The intention of this measure is to increase access to loans by businesses impacted by the Coronavirus.

Additional lump sum payments to employers – Boost cash flows for employers

The Government had previously announced payments to businesses linked to withholding tax for employees. This measure has been amended to double the amounts that eligible employers can receive. The amount of payment depends on whether the business is required to withhold tax on salary and wages for employees.

Employers will receive a payment equal to 100% of their salary and wages withheld with a minimum payment of $10,000 and a maximum payment of $50,000.  Payment will be delivered by the ATO as an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.

An additional payment is also being introduced in the July to October 2020 period.  This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.

Instant asset write-off

From 12 March 2020, the instant write-off threshold will increase from $30,000 to $150,000. It has also been broadened and will be available to businesses with an annual turnover of up to $500 million for the current financial year (an increase from $50 million). This applies to new or second-hand assets used or installed ready for use by 30 June 2020. The increased write-off threshold will apply on a per asset basis until 30 June 2020.

Accelerated depreciation

Accelerated depreciation of 50% will apply to eligible assets until 30 June 2021. Eligible assets are those acquired after the announcement and are used or installed ready for use by 30 June 2020. However, it does not apply to second-hand assets, building or other capital works deductible under separate tax provisions. This concession will be available to business with aggregated turnover of less than $500 million.

Employers with apprentices and trainees

Eligible employers who employ apprentices or trainees can apply for a subsidy of 50% of the employee’s wage. This applies for the period of 1 January – 30 September 2020.  The maximum payment is $21,000 per apprentice or trainee.  If an employer is unable to retain an apprentice, the subsidy will be available to the new employer.  An eligible employer must have less than 20 full-time employees.  The apprentice or trainee must be in employment with the business as at 1 March 2020.  Other employers, regardless of size, and Group Training Organisations that re-engage eligible out-of-trade apprentices or trainees are also eligible for the subsidy.  Eligible employers can register for the subsidy from early April 2020 and final claims for payments lodged by 31 December 2020.

Social security

$750 cash payments

Two payments of $750 each will be paid to eligible income support recipients and concession card holders. The first tax-free payment will be available to eligible income support recipients as at 12 March 2020 and is expected to be automatically paid to eligible recipients from 31 March 2020.

The second payment will be available to those who aren’t eligible for the Coronavirus supplement (see below) and will be automatically paid from 13 July 2020.

Eligibility for payment one

To be eligible, you must be residing in Australia and receiving one of the income support payments, or a holder of one of the concession cards. However, in relation to the first $750 payment you must also have been receiving an income support payment on 12 March 2020. If you had applied for an eligible payment before 12 March 2020 and are subsequently granted the payment, you will also be eligible for the one-off payment.

Income Support Payments

Age Pension, Austudy, Bereavement Allowance, Disability Support Pension, Youth Allowance, Carer Payment, Special Benefit, Carer Allowance, Sickness Allowance, Wife Pension, Family Tax Benefit (including Double Orphan Pensions), Parenting Payment, Farm Household Allowance, Widow B Pension, Veteran Service Pension, ABSTUDY (Living Allowance), Veteran Income Support Supplement, Veteran Compensation Payments, Partner Allowance, War Widow Pension, Widow Allowance, Veteran Payment, Newstart Allowance

Concession Cards

Pensioner Concession Card, Commonwealth Seniors Health Care Card, Veteran Gold Card

Coronavirus Supplement

The Coronavirus supplement of $550 per fortnight will be paid to new and existing recipients of: JobSeeker Payment, Youth Allowance (Jobseeker), Parenting Payment, Farm Household Allowance, and Special Benefit.

The supplement will be paid over the next six months and will be paid automatically with the person’s ordinary fortnightly entitlement. It will be paid from 27 April.

Existing social security recipients

If you’re already receiving a particular benefit or payment and your circumstances change due to COVID-19, your benefit may remain unchanged. However, a change in circumstances that is not a result of COVID-19 will be assessed under the ordinary rules, and may impact your entitlement. All changes should be reported to Centrelink or DVA.

·         Recipients of Carer Payment who are impacted will not have their benefits changed.

·         Child Care Subsidy: if your child cannot attend childcare as a result of COVID-19, but you’re still charged a fee from your childcare provider, you may still receive the subsidy for up to 42 days of absence. This applies also to non-COVID-19 related absences. If your activity hours change, you don’t need to update your activity tests where it is due to a requirement to self isolate, or if you’re on leave.

·         Newstart or Jobseeker: Recipients with mutual obligations (for example Newstart or Jobseeker recipients who usually need to be actively looking for work, volunteering, or doing some paid work) will be provided flexible options to ensure your safety. This may apply where you’re unable to satisfy these requirements because you’re self-isolating, or you’re a primary carer, caring for a child whose school has closed, or a disabled adult whose day service closes. You may receive an exemption from this requirement without a need for medical evidence.

·         Youth Allowance (student): Activity requirements for study will be amended. This means that if you’re a student and you’re unable to attend studies due to the virus, you may be exempt from meeting this requirement.

·         Students and trainees: If you’re self isolating at home or your education provider closes or reduces your study load, your payment won’t change. You must remain enrolled in study and have a plan to return and must tell Centrelink if this doesn’t apply to you.

Applying for a benefit

If you’re unable to work, are in isolation or hospital, or you need to care for children as a result of COVID-19, you may be eligible to apply for a payment. If you apply for a social security benefit or concession card and your claim is related to COVID-19, some of the ordinary eligibility rules may be waived. Also, if you’re an employee, and you are diagnosed with COVID-19 or are in isolation, you may be eligible for an income support payment if you have no employer leave entitlements.

Waiting periods and assets testing

The ordinary one week waiting period that applies to some payments will be waived when you’re claiming because you’re impacted by COVID-19. The Liquid Assets Waiting Period (LAWP) will also be waived if you’re entitled to the Coronavirus Supplement. If you’ve already applied for a payment and are currently serving a LAWP, you won’t need to serve the remainder of the waiting period. This applies also if you’ve applied for a payment which is eligible for the Coronavirus Supplement.

The Income Maintenance Period and Compensation Preclusion Periods will continue to apply. The assets test will also not be applied when determining entitlement to JobSeeker Payment, Youth Allowance (Jobseeker) and Parenting Payment for six months. The income test will continue to apply and may reduce the amount of the payment you’re eligible for.

To access these measures, recipients of JobSeeker Allowance and Youth Allowance (Jobseeker) cannot be receiving employer benefits (such as sick leave or annual leave payments) or income protection payments at the same time.

Reduction in deeming rates

A further reduction in deeming rates was announced on 22 March. The deeming rates will reduce as follows:

From 1 May 2020:

Lower deeming rate will reduce from 1.0% to 0.25%

Upper deeming rate will reduce from  3.0% to 2.25%

The deeming thresholds are unchanged at $51,800 (single) and $86,200 (couple) which are generally indexed on 1 July each year. The rates will take effect from 1 May 2020, and any additional entitlement will be paid from 1 May 2020.

Faster claims process

New applicants are being encouraged to claim online where possible to ensure claims are processed as fast as possible. If this isn’t an option, claims can be made over the phone. To support this process, some temporary changes are also being made to identification requirements and other evidence which is generally required to process a claim.

Superannuation

Access to super savings

Access to superannuation savings will be broadened where you’re in financial distress because of the Coronavirus and meet certain eligibility conditions. If you’re eligible you’ll be able to access up to $10,000 before 30 June 2020 and an additional $10,000 from 1 July for approximately three months (depending on the timing of legislation). To be eligible, you must meet one of the following conditions:

·         You’re unemployed

·         you’re eligible to receive Jobseeker Payment, Youth Allowance (jobseekers), Parenting Payment, Special Benefit or Farm Household Allowance

·         on or after 1 January 2020, you were made redundant, your hours of work reduced by at least 20%, or if you’re a sole trader, your business was suspended or your turnover reduced by at least 20%.

Applications will be through MyGov and you’ll need to certify that you meet one of the above eligibility requirements. Once the ATO confirms you’re eligible, they will issue you and your super fund with a determination and the payment will be made to you. If you have a self-managed super fund, arrangements will differ. Payments will be tax-free and amounts received will not impact Centrelink or DVA entitlements. It is expected that claims can be made from mid-April.

Income stream drawdown rates

There will be a temporary reduction in the minimum annual amount that you’re required to withdraw from your super income stream. The reduction in the minimum drawdown rates will apply for the duration of this financial year and for the 202/21 financial year.  The required minimum pension amounts have been halved – so if you are aged between 65 and 74, the new minimum pension payment will reduce from 5% of your account balance to 2.5% of your account balance.

If you have elected to drawdown the minimum rate, you may need to speak to your financial adviser on the amended level of income you will receive as your Pension provider will automatically amend your pension payments to the new minimum rates.

For more information:

https://treasury.gov.au/coronavirus

https://treasury.gov.au/sites/default/files/2020-03/Overview-Economic_Response_to_the_Coronavirus_0.pdf

The Governments response has been broken down into three main areas:

Supporting Individuals and Households

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals.pdf

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households.pdf

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_support_for_retirees_to_manage_market_volatility.pdf

 

Support for businesses

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_temporary_relief_for_financially_distressed_businesses.pdf

https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf

https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_severely_affected_regions_and_sectors.pdf

Supporting the flow of credit

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf

Government website for information and support

https://www.business.gov.au/Risk-management/Emergency-management/Coronavirus-information-and-support-for-business