COVID-19 Help For Business

COVID-19 Help For Business

COVID-19 help for business – there are 16 measures to help you.

COVID-19 Help for Business

It is difficult to say which of the 16 measures will help you most. Probably the cash flow boost, Jobkeeper payment and the rent reduction under the Commercial Tenancies Code. But maybe all.

1 – Cash Flow Boost

The tax-free cash flow boost ranges from $20,000 to $100,000. It depends on the PAYG withholding you did in the March and June 2020 quarters. You need to be registered for PAYG withholding to qualify for this one. The size of your cash flow boost might depend on timing. 

2 – JobKeeper Payments

There are two groups who qualify – employers and business participants. Sole traders, company directors, partners and trust beneficiaries fall into the second group if they don’t pay themselves a wage. Jobkeeper 1.0 will change to Jobkeeper 2.1 from 28 September 2020.

3 – Commercial Tenancies Code

Under this Code of Conduct landlords can’t evict your business for failure to pay your lease. And they need to give you a rent reduction similar to your drop in turnover since the start of the crisis – half of which needs to be waived. So if your turnover dropped by 40%, they need to waive at least 20% and defer the rest interest-free.

4 – ATO Measures

There are 5 ATO measures to help you when your cashflow is tight due to the crisis:

1 – The due date for paying your BAS, PAYG I, income tax assessments and FBT as well as excise have been deferred by 4 months.

2 – If you expect a GST refund, you can swap to monthly BAS to get this refund much quicker into your pockets.

3 – You can vary your PAYG instalments to zero for this March quarter. And you can request a refund of the last two instalments you paid for the September and December quarters last year

4 – The ATO will remit any interest and penalties incurred after 23 January this year.

5 – And you can enter into a low-interest payment plan for existing tax liabilities.

5 – Easier Access to Bank Loans

It should get easier to get a loan thanks to a new $90b funding facility to banks – as in Approved Deposit Institutions (ADIs). ADIs can access this three-year fixed facility at a base rate of 0.25%, so compare that to the interest rate they want to charge you.  

6 – Easier Access to Loans from Non-Bank Lenders

You should also find it easier to get finance from non-bank lenders thanks to a $15 billion facility available to smaller ADIs and non-ADI lenders. This facility is managed by the Australian Office of Financial Management (AOFM).

7 – Six Month Deferral of Loan Repayment and Interest

If you find it hard to make repayments on your business loan, you can defer repayments and interest for six months between 1 April and 31 October 2020, provided you are a small business. 

8 – Government Guarantee of your Loan

The government guarantees 50% of new loans to small business of up to $250,000 for up to three years. This is called the SME Guarantee Scheme and is limited to loan amounts of up to $250,000. A bank needs to actively join this scheme and SMEs, including sole traders, only qualify if they have a turnover of up to $50m. The loans come with an initial six month repayment holiday.

9 – $150,000 Instant Asset Write-Off

The instant asset write-off is changing to $150,000 until the 30th of June 2020 for businesses with a turnover of less than $500m.

10 – Investment Incentive

The investment incentive, uncapped, until the 30 June 2021, allows a 50% depreciation in the first year for businesses with a turnover of less than $500m.

11 – 50% Wage Subsidy for Apprentices and Trainees

Employers of apprentices and trainees receive a 50% wage subsidy of their apprentice and trainee wages until 30 September 2020, of up to $21,000 per apprentice.

12 – Payroll Tax

All states and territories have introduced payroll tax relief to help you cope with the pandemic crisis. Here is what happened in NSW.

You receive a 25% discount on your annual tax liability for 2019/20. You can defer your payroll tax payments for up to 3 or 6 months depending on your total grouped Australian wages. And from 1 July 2020 your annual treshold increases to $1m.

13 – Small Business Support Grant

The states and territories have all issued support schemes for small business. In NSW small business who don’t pay payroll tax are to receive a $10,000 grant if they meet certain conditions. This scheme is not law yet.

14 – Increased Threshold for Creditor Action

The threshold at which creditors can issue a statutory demand on a company has temporarily been increased. And companies currently have longer to respond to such statutory demands they receive. The Corporations Act 2001 will be amended accordingly.

15 – Waiver of Director’s Liability

There is temporary relief for directors from any personal liability for trading while insolvent.

16 – Expansion of JobSeeker and Youth Allowance

Sole traders may now be eligible for JobSeeker Payment and Youth Allowance. Please see COVID-19 Help for Individuals for more details.

Please call me on 0407 909 779 or email if you get stuck.

MORE

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Jobkeeper 2.1

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Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

COVID-19 Help For Individuals

COVID-19 Help For Individuals

Here are 9 measures to help you. Let’s call them the COVID-19 help for individuals.

COVID-19 Help for Individuals

This crisis hits all of us, but some of you a lot harder than others. Here is what is out there to help you.

1 – First Economic Support Payment

$750 to anybody residing in Australia and already receiving an economic support payment listed below. This includes any new recipients who are eligible by 13 April 2020. Payments are made from 31 March onwards by Services Australia or DVA and are automatic, so don’t require an application.

Support payments that qualify are:

Young – ABSTUDY (Living Allowance), Austudy and Youth Allowance.
Unemployed – JobSeeker Payment (formerly Newstart Allowance).
Family – Parenting Payment, Family Tax Benefit, Double Orphan Pension, Bereavement Allowance, Farm Household Allowance, Partner Allowance, Widow Allowance and Carer Allowance.
Aged – Age Pension, Wife Pension, Wife B Pension, Pensioner Concession Card holders and Commonwealth Seniors Health Card holders.
Disability – Disability Support Pension and Carer Payment.
Veteran – Veteran Service Pension, Veteran Income Support Supplement, Veteran Compensation payments (including lump sum payments) War Widow(er) Pension and Veteran Payment, Veteran Gold Card holders, DVA PCC holders, DVA Education Scheme recipients, Disability Pensioners at the temporary special rate and DVA Income support pensioners at $0 rate.
Other – Sickness Allowance and Special Benefit.

2 – Second Economic Support Payment

Anybody eligible for a support payment as of 10 July 2020 will receive a second payment of $750 – applying the same rules as for the first payment – provided they do not receive the Coronavirus Supplement with their payment. As before payments will be automatically made by Services Australia or DVA and don’t require an application. Payments will be made from 13 July onwards.

Estimated cost: $4b

3 – Easier to Apply For JobSeeker and Youth Allowance

Applying for the JobSeeker and Youth Allowance for jobseekers has been made easier and the circle of potential recipients expanded – so more will qualify. From 25 March 2020, permanent employees who have been stood down or lost their job as well as people caring for someone infected or in isolation as a result of contact with Coronavirus will be eligible.

This also applies to sole traders and self-employed people, which we will cover under Business.

Applicants don’t need to pass the assets test. And usual waiting periods – Ordinary Waiting Period, Liquid Assets Waiting Period, Seasonal Workers Preclusion Period and Newly Arrived Residents Waiting Period – don’t apply. And last but not least there is currently no requirement to show an Employment Separation Certificate, proof of rental arrangements and verification of relationship status.

4 – JobSeeker Supplement Payment (“Coronavirus Supplement”)

Anybody receiving the support payments listed below will receive a ‘coronavirus supplement’ of $550 per fortnight from 27 April 2020 onwards. Payment is automatic, doesn’t require an application and is in addition to any support payments. The coronavirus supplement is taxable income.

Support payments that qualify are:

Young – ABSTUDY (Living Allowance), Austudy and Youth Allowance.
Unemployed – JobSeeker Payment (formerly known as Newstart Allowance).
Family – Parenting Payment, Partner Allowance, Widow Allowance and Farm Household Allowance.
Other – Sickness Allowance and Special Benefit.

Estimated cost: $14.1b

5 – Reduction in the JobSeeker Partner Income Test Taper Rate

Couples who lose their principal income with one partner still working might receive a higher JobSeeker payment thanks to a lower taper rate.

The JobSeeker Payment Partner Income Test taper rate will reduce from 60 cents to 25 cents from 27 April 2020.

Usually, any partner income over $994 per fortnight reduces a person’s JobSeeker payment by 60 cents, resulting in a cut-out at $1,858.80 per fortnight. This will reduce to 25 cents from 27 April 2020, resulting in a new cut-out at $3,068.80 per fortnight.

6 – Exemption from Mutual Obligation

Usually recipients of support payments need to meet their mutual obligation. This includes attending and reporting certain appointments and activities. Failure to do so often results in suspension of payments. During the crisis, no payments will be suspended for lack of attendance or reporting.

7 – JobSeeker Rights Expanded

Under the new measures, jobseekers can request to do face-to-face job interviews and training online. Job Plans now only require four job searches a month (or fewer, at provider discretion). Work for the Dole and other group activities that cannot be delivered online are suspended.

8 – JobKeeper 

This one first depends on your employer offering you a JobKeeper payment. But then the ball is in your court. You can accept but you don’t have to.

To accept you sign the Employee nomination notice that your employer will ask you to sign. Your employer can’t apply for your JobKeeper payment without your consent.

If you have two or more employers, you can choose which employer is to receive the JobKeeper payment for you. With one exception – if one employer employs you part- or full-time and the other just offers you casual employment, then you can only receive the JobKeeper payment from your part- or full-time employer.

The Jobkeeper Payment is ordinary income for social security purposes, so is included in the income text for any income-tested support payments. So if you receive Jobkeeper, you will probably not qualify for JobSeeker.

Estimated cost: $130b

9 – Work-Related Expenses

You can claim more work-related expenses more easily during the COVID-19 crisis. Here is the ATO fact sheet.

From 1 March until at least 30 June, you can claim 80 cents per work hour for all your running expenses, rather than having to prove actual costs. If you and others (spouse, children, flat mates etc) all work from your home, you can all claim 80 cents per work hour each. And you don’t need to have a dedicated work area while the crisis lasts. This is the so-called shortcut method.

Alternatively – as always – you can claim 52 cents per work hour for heating, cooling, lighting, cleaning, office furniture etc, Plus: Work-related portion of actual costs for phone, internet, computer supplies and stationery, Plus: Decline in value of your computer, laptop or ipad.

Or  – as always – you can claim the work-related portion of all your actual running expenses.

You can only claim actual costs if you have incurred the expense, have a receipt and have not been reimbursed. 

Pre-COVID-19 Assistance Measures

In addition to COVID-19 measures, there are still the assistance packages that were there before COVID-19, including the Commonwealth Rent Assistance and Family Tax Benefit part A or B.

 

help for retirees

COVID-19 Help For Retirees

Your super is down – but help is coming. Here is Australia’s COVID-19 help for retirees.

COVID-19 Help For Retirees

COVID-19 has hit your super hard. It hit everybody hard. To help you, there are 5 measures to get you through this. 

1 – Early $20,000 Access To Super

From 20 April 2020 onwards you can ask the ATO for an early release of your super. If approved, you can access $10,000 by 30 June 2020 and another $10,000 between 1 July and 24 September 2020.

You will qualify, if you meet at least one of the following four conditions:

1 – You are unemployed; or

2 – You are eligible to receive social security payments. To be more precise, you are eligible to receive job seeker payments, youth allowance for jobseekers, parenting payment, special benefit allowance or farm household allowance; or

3 – You were made redundant or your working hours were reduced by 20% or more on 1 January 2020 or thereafter; or

4 – You are a sole trader and your business was suspended or had at least a 20% reduction in turnover since 1 January 2020.

2 – 50% Reduction of Minimum Pension Payments

You can reduce your minimum pension payments by 50% this and next financial year. So 2019/20 as well as 2020/21.

If you have already withdrawn more than 50%, then you can contribute it back into super if you satisfy the work test before your contribution.

3 – Increase of Work Test from 65 to 67

This is still in the pipeline and not yet law. The age for the work test is to increase from 65 to 67.

Once this is law, it means that while 65 and 66 the work test doesn’t apply to you anymore. You can contribute surplus cash back into super, irrespective of whether you work or don’t.

4 – Reduction of Social Security Deeming Rates

It has become much easier to qualify for the age pension. And this is for two reasons..

1 – The value of your share portfolio in super has probably gone down, and so it will get easier to pass the asset test.

2 – The deeming rates are now 0.25% and 2.25% – significantly lower than what they were before – so it will be easier to pass the income test.

5 – $750 Double Dip

If you were on an age pension between 12 March to 13 April 2020 and didn’t receive any other support supplement, you should have received two payments of $750.

Does this make sense? If you get stuck, please give me a call on 0407 909 779 – Heide.

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Cash Your Super Before You Die

 

Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.