The Federal Government’s measures in response to the Coronavirus released to cushion the economic impact of the virus and help build a bridge to recovery have been implemented via a number of bills introduced into the Parliament and quickly received the Royal Assent on 24 March 2020.
The total amount of economic assistance packages including the first stimulus package, the assistance by the Reserve Bank and the second package to provide further relief to help businesses and individuals hit by the coronavirus becomes $189 billion or the equivalent of 9.7 of Australia’s GDP. The packages are is designed to help businesses and households through a difficult time.
The below outline provides a high-level summary of key aspects of the measures:
The new Coronavirus Supplement of $550 per fortnight for income support recipients and welfare recipients;
Available over the next six months for eligible individuals that may include employees who are stood down or lose their employment (provided they meet the income tests and asset testing waived for the period of Coronavirus supplement). The supplement will be paid to eligible individuals as part of their existing income support payments.
Two separate tax-free payments of $750 to social security and income support recipients
The initial payment will be paid from 31 March 20 and the second $750 will be available from 10 July 20 (the second will not be available for the Corona supplement recipients).
Early access to superannuation benefits (up to $20,000)
Eligible individuals will be able to access up to $10,000 for this financial year (before 30 June) and next financial year (from 1 July) by applying directly to the ATO through myGov accounts.
Cash flow assistance for businesses – tax-free cash payment of up to $100,000 (with a minimum payment of $20,000);
Available for not-for-profits and small and medium-sized businesses employing people with turnover under $50 million based on their PAYG withholding obligations.
Payments will be delivered by the tax office as a credit on activity statements (and will be paid in stages). Eligible businesses that are not required to withhold tax will receive a minimum payment of $20,000 (up from $2,000).
Increasing the instant asset write-off:
Eligible businesses (with aggregated turnover of less than $500m) will be able to immediately deduct purchases of eligible assets costing less than $150,000 from 12 March 20 to 30 June 20.
A temporary business investment allowance (a new time-limited 15 months investment incentive)
Available for businesses with aggregated turnover below $500 million purchasing certain new depreciable assets acquired after 12 March 2020 and first used or installed by 30 June 2021. This measure will allow a 50 per cent accelerated depreciation deduction in addition to the existing depreciation deduction.
A new “Coronavirus SME Guarantee Scheme” – offer businesses with turnovers under $50 million unsecured loans of up to $250,000 for a term of up to 3 years
The government will guarantee 50% of the loans and will apply to loans granted within 6 months, starting from 1 April and no repayment will be required for the initial 6 months.
Apprentice and trainee support (from the first economic stimulus package)
Small businesses with less than 20 full-time employees will be eligible to apply to receive wage assistance from 1 January 2020 to 30 September 2020. This assistance will essentially provide a reimbursement of up to 50% of the wage of the particular apprentice or trainee over the 9- month period up to $21,000 per apprentice or trainee.
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