In response to the impact of Coronavirus (COVID-19) on the Australian economy, the Federal government announced a stimulus package to assist Australian businesses in general and also provide extra support for some individuals. The business benefits are not automatically applied and some action is needed to claim available benefits where eligible.
Summary of benefits and conditions
Within the package, there are benefits to help individuals and businesses, as summarised below. The overall effect is intended to help keep the domestic economy moving and support continued employment through a period of uncertainty that will challenge some businesses and individuals more than others.
- One-off $750 cash payments to all welfare recipients including pensioners, Commonwealth Seniors Card holders, Newstart recipients, carers, veterans, people on disability support, and those on Family Tax Benefits
- A drop in the deeming rate for pensioners’ assets
- An increase in the instant asset write-off threshold for business from $30,000 to $150,000 to apply from 12 March to 30 June 2020 – this applies to business with turnover up to $500 million
- At the time of writing, it is yet to be clarified if the car depreciation limit of $57,581 will be disabled during this period of increase
- An extra 50% of accelerated depreciation over and above existing deductions to June 2021 – in effect, an asset bought before 30 June 2020 can give a 150% deduction
- A tax-free cash payment of up to $25,000 for businesses with turnover under $50 million paying wages tax – the payment will be the equivalent to 50% of the amount withheld over the period March to June 2020 up to a maximum of $25,000 with a minimum payment of $2,000
- Businesses that pay wages but do not withhold tax can receive the minimum tax-free cash payment of $2,000
- A wages subsidy of up to 50% of apprentice or trainee wages for up to nine months – a subsidy maximum of $21,000 for businesses with fewer than 20 full-time employees that employ an apprentice or trainee
- Up to four months’ deferral for paying amounts due through BAS lodgement (including PAYG installments), income tax assessments, FBT assessments, and excise
- Businesses on a quarterly BAS reporting cycle may opt into monthly GST reporting to get quicker access to any GST refund entitlements
- Allowing businesses to vary PAYG installment amounts to zero for the March 2020 quarter, and businesses that vary their PAYG installments to zero can also claim a refund for any installments made for the September 2019 and December 2019 quarters
- Relief from interest or penalties that have been applied to tax liabilities incurred on or after 23 January 2020
- Low-interest payment plans to help affected businesses pay their existing and ongoing tax liabilities
Unlike the bushfire relief measures, which applied automatically to particular geographic areas, the assistance measures for businesses impacted by COVID-19 will not be automatically implemented. For more information about the government stimulus package for 2020 and how to take advantage of the available benefits if eligible, contact Geoff Morris at Billings + Ellis.