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Today the Scott Morrison government announced another $66 billion economic support package, which is designed to:

  1. Assistance for businesses to keep people employing people
  1. Support for workers and households
  1. Regulatory protection and financial support for businesses to stay in business

1. Assistance for businesses to keep people in a job:

a) Boosting cashflow for employers

The Government is extending the previously announced package “Boosting Cash Flow” (Boost) to support small and medium business (with aggregated turnover under $50 million) to continue to employ people. For the period from March to June:

  • The Boost payment will be 100% (up from 50%) of the PAYG Withholding deductions from employee, up to a maximum of $50,000 (up from $25,000).
  • For the March BAS they will pay 300% of the PAYG Withholding, subject to the same limit.
  • Minimum Boost has been lifted from $2,000 to $10,000
  • Then for each month from July to October, they will receive 25% of the amount they received from May to June.  (new announcement)

The payment is available to “active eligible employers established prior to 12 March 2020”. These payments are tax free. SME’s and not-for-profit entities (including charities) with turnover under $50million that employ workers are eligible.
2. Regulatory protection and financial support for businesses to stay in business

a) Coronavirus SME Guarantee Scheme

The government will guarantee 50% of new loans issued by lenders to SMEs, which should enhance willingness to lend and ability to provide credit to these businesses.

b) Corporations Act – amended

The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as result of Coronavirus. The government is temporarily increasing the threshold where creditors can issue a statutory demand on a company as well as the time companies have to respond to statutory demands they receive.
3. Support for pensioners.

a)  Draw-down rate

The minimum draw-down rates for super income streams have been halved so that superannuates are not forced to sell assets in the present environment.

b)  Deeming Rate

The deeming rate for pensioners assets have been lowered to 0.25% (lower bound) and 2.25% (upper bound)
4. Support for Workers and Households:

a) Support for Workers

The government is temporarily expanding eligibility to income support payments and establishing a limited Coronavirus supplement to be paid per fortnight. This will be paid for the next six months to existing and new recipients of:

  • Job Seeker Payment
  • Youth Allowance
  • Parenting Payment
  • Farm Household Allowance
  • Special Benefit

b) Support for Households

Recipients receiving social security, veteran income support and eligible concession card holders (except those receiving income support payments that are eligible to receive the Coronavirus supplement) will receive a further $750 payment.

The first $750 payment announced in the first stimulus package will be paid on 31st March 2020, whilst the second will be paid on 13th July 2020.

c) Early release of Superannuation

The government will allow people in financial stress directly related to Coronavirus to access $10,000 of their super funds in 2019-20 and a further $10,000 in 2020-21. Eligible individuals will apply online through myGov. If you are not sure if you are eligible, please contact us to discuss. There will be no tax payments on amounts released and it will not affect Centerlink or Veterens’ Affair payments.

 

Our team is ready to assist you and your business continue to understand and navigate these tumultuous times. Please call or email us to discuss further.

 

Date Published: 22 March 2020

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