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Australian Government small business stimulus/relief package

Last updated: 23 July 2020

The Australian Government has announced several stimulus and relief packages, designed to sustain small businesses through the coronavirus (COVID-19) pandemic and keep employees in work. The government has stated that the measures are temporary, targeted and scalable. The main areas of support relevant to small businesses to date are:

JobKeeper Payment (updated 23 July)

Businesses impacted by the coronavirus (their turnover has been reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month) could be able to access a subsidy from the Government to continue paying their employees. For each eligible employee, affected employers will be able to claim a fortnightly payments of:

  • $1,500 per fortnight (until 27 September 2020)
  • $1,200 per fortnight for full-time employees and $750 for employees who work less than 20 hours (from 28 September to 3 January 2021)
  • $1,000 per fortnight for full-time employees and $650 for employees that work less than 20 hours (from 4 January to 28 March 2021)

Businesses without employees that meet turnover tests, such as the self-employed, can also apply for the JobKeeper Payment.
 

Read the JobKeeper Payment: key questions answered or JobKeeper: new phase details to find out more.

Expanded eligibility for JobSeeker Payment for sole traders (updated 23 July)

Eligible sole traders will be granted access to the JobSeeker Payment, which now includes an additional coronavirus supplement payments at the following rates:

  • $550 per fortnight (until 27 September 2020)
  • $250 per fortnight (from 28 September 2020).

Individuals will still be able to keep operating their businesses and earn up to $1,075 per fortnight before their payments are affected. On 30 March, it was announced that the income test for partners of job seekers will be increased from $48,000 to $79,762 to provide greater access.

Sole traders are also eligible for the JobKeeper Payment if they meet certain eligibility criteria. Other eligible businesses can nominate only one working director, partner, beneficiary or shareholder, as well as, any eligible employees.

People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account. Visit the ATO website or read the JobSeeker: new phase details to find out more.

Who is eligible?

Sole traders that meet the JobSeeker Payment income test.

When will it be received?

After your application has been approved via the Services Australia website.

Early access to superannuation (updated 22 April)

The Government is also giving sole traders, people whose business was suspended due to restrictions, or those have experienced a 20 per cent or greater reduction in turnover as a result of the pandemic, special access to withdraw funds from superannuation. The tax free withdrawals for the 2019-20 financial year are now closed. Withdrawals for eligible applicants during the current financial year are capped at $10,000. Applications can be made via the my.gov.au portal, and are managed by the ATO who will communicate with the super funds of eligible applicants.

Who is eligible?

Sole traders, people whose business was suspended or those who have experienced a reduction in turnover of 20% or more, plus other individuals who meet eligibility criteria as defined by the ATO.

Additional payments for employers to retain staff (announced 22 March)

Not-for-profits and small businesses with a turnover under $50 million will receive a tax-free cash payment of from $20,000 up to $100,000 to help them retain staff and continue operating.

Eligible entities will receive an additional payment equal to the total of all of the ‘boosting cash flow for employers’ payments received.

The Government expects 690,000 businesses employing 7.8 million people and 30,000 not-for-profits will be eligible for measures in the stimulus package. The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.

Who is eligible?

Small and medium business entities with aggregated annual turnover of less than $50 million and that employ workers are eligible.

Greater leniency for insolvency and bankruptcy (announced 22 March)

The threshold at which a creditor can take action against a small business has increased from $2,000 to $20,000. The mandatory response time has also increased from 21 days to 6 months. Temporary relief for directors from any personal liability for trading while insolvent has also been announced.

Visit the Australian Financial Security Authority website to find out more.

Who is eligible?

All small businesses facing insolvency or bankruptcy as a result of the coronavirus.

Cash flow boost for employers (announced 12 March, increased 22 March)

Eligible small businesses that withhold income tax from employee salaries and wages and pay it to the Australian Taxation Office can receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000. A minimum payment of $10,000 may be available to businesses that pay wages but are not required to pay tax. Visit the ATO website for more details.

SME Guarantee Scheme - phase 1 (updated 22 March)

The Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital for small to medium businesses, to enable them to access additional funding to help support them through the upcoming months. Businesses with a turnover of up to $50 million will be eligible to receive these loans, up to $250,000 per borrower. The loans will be up to three years, with an initial six month repayment holiday and will be in the form of unsecured finance.

Who is eligible?

Businesses with a turnover of up to $50 million that pass the lenders’ credit assessment processes.

When will it be received?

The scheme commenced in early April 2020 and be available for new loans made by participating lenders until 30 September 2020.

SME Guarantee Scheme – phase 2 (updated 20 July 2020)

As part of the second phase of the SME Guarantee Scheme, the focus of the program will move beyond providing funding for working capital to providing businesses with access to longer and more affordable credit that can be used to help businesses fund a wider range of investments. Businesses will be eligible to borrow up to $1 million for a term of up to five years.

Who is eligible?

Businesses with a turnover of up to $50 million that pass the lenders’ credit assessment processes.

When will it be received?

The second phase of the scheme will start on 1 October 2020 and run until 20 June 2021.

Wage subsidy for apprentices and trainees (announced 12 March)

Eligible employers can apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. Businesses can be reimbursed up to a maximum of $21,000 per eligible apprentice, (which is $7,000 per quarter for the first three quarters of 2020).

Who is eligible?

Small businesses with fewer than 20 full time employees who retain an apprentice or trainee. The apprentice must have been in training with the small business as at 1 March 2020.

When will it be received?

You will be able to register for the subsidy from early April 2020. For more information on how to apply, including eligibility criteria, contact an Australian Apprenticeship Support Network (AASN) provider. Please note: Claims for this subsidy must be lodged by 31 December 2020.

Increase in the instant asset write-off threshold (announced 12 March)

The instant asset write-off threshold was increased from $30,000 to $150,000. The higher threshold is in place from 12 March until 31 December 2020 and applies to new or second-hand assets installed in businesses during these dates.

Who is eligible?

Businesses with aggregated annual turnover of less than $500 million (up from $50 million).

When will it be received?

The instant asset write-off is generally claimed back via your business tax return. At this stage, no specific details have been announced on how to access this incentive. We will update this information when more details are announced by the federal government.

Accelerated depreciation for investments (announced 12 March)

Businesses will be able to deduct an additional 50 per cent of an asset cost in the year of purchase from 12 March 2020 until 30 June 2021. This is designed to support business investment and economic growth over the short term.

Who is eligible?

Businesses with a turnover of less than $500 million that are purchasing new depreciable assets. Eligible assets covered are new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997.

Please note: Second hand assets are not eligible for this initiative.

When will it be received?

Depreciation is generally claimed back via your business tax return. At this stage, no specific details have been announced on how to access this incentive earlier. We will update this information when more details are announced by the federal government.

Other measures

A number of other measures designed to support households and boost the economy are also included in the package:

  • Two tax-free $750 stimulus payments to individual income support recipients and eligible concession card holders. The first payment will be rolled out from 31 March 2020 and the second from 13 July 2020.
  • Targeted regional and community support aimed at businesses and communities particularly affected by the economic downturn due to coronavirus, for example those in the tourism, agriculture and education industries. This support will include waiving fees and charges for tourism businesses operating in national parks, plus assistance in identifying new export markets and supply chains.

Tax relief

The Australian Tax Office (ATO) will also consider relief for certain tax obligations to eligible businesses, including deferring tax payments up to four months.

If disruption to your business operations causes you to fall behind with your tax and super obligations, read the ATO's information on COVID-19, call them on 1800 806 218 or speak to your tax professional so that they can work with you to find a solution.

Banking relief announcement

The Australian Banking Association has announced new loan deferral arrangements for small businesses affected by coronavirus. For assistance from your bank for other financial obligations, contact their hardship numbers.

WA coronavirus relief package

In addition to this stimulus package, the Western Australian Government has announced $114 million in measures to support small business during the coronavirus (COVID-19) pandemic.

More information

A more detailed overview of all these measures and fact sheets are available from the Australian Treasury.

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