Support for Businesses - Federal Government
The Australian Government has announced measures to support businesses impacted by COVID-19. Below is a summary of each measure.
The information contained below is current as of 17 April 2020 and is provided for general guidance only. This information is not specific to any individual or business, and should not be relied upon. You should obtain independent professional advice to ensure that any information is relevant to your circumstances.
The JobKeeper payment is open to eligible employers to enable them to keep paying their employees salary or wages. Employers must pay their employees a minimum of $1,500 (before tax) per fortnight. Payments from the government will be in arrears and commence in the first week of May 2020. JobKeeper payments can be made for the period beginning 30 March 2020.
Eligibility: Australian businesses trading and employing eligible staff on 1 March 2020, which have had a;
- Turnover reduction of 30%, for an aggregate turnover $1b or less, or a
- Turnover reduction of 50%, for an aggregate turnover over $1b.
Staff must be full time, part time or casuals who have been employed on a regular systematic basis for at least the previous 12 months as at 1 March 2020. Find out more.
Boosting cash flow for employers
Employers will receive a payment equal to 100% of their salary and wages withheld. Overall payment will be between $20,000 to $100,000 and cover periods from Jan to Sept 2020. Payment’s will be made to businesses automatically after activity statements are lodged, commencing April 2020.
Eligibility: NFPs and small or medium businesses with an aggregated turnover of under $50 million, who held an ABN on 12 March 2020, and made payments to employees subject to withholding (e.g. salary and wages). Find out more.
Instant asset write-off
The instant asset write-off threshold has been increased from $30,000 to $150,000 and expanded to include businesses with an aggregated annual turnover of less than $500 million. This applies from 12 March 2020 to 30 June 2020, for new or second-hand assets first used or installed during this timeframe. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets.
Eligibility: Up to 30 June 2020, for businesses with an aggregate turnover of less than $500 million.
From 1 July 2020, the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold reduces to $1,000. Find out more.
Wage subsidy for apprentices and trainees
Businesses employing apprentices or trainees may receive a wage subsidy for 50 per cent of the apprentice or trainee’s wage.The subsidy is paid from 1 January 2020 to 30 September 2020. The maximum reimbursement will be $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Eligibility: Businesses with less than 20 employees, with apprentices or trainees in training as at 1 March 2020, The Australian Apprenticeship Support Network (AASN) will complete an eligibility assessment before payments can be made. Find out more.
Backing Business Investment
A time limited 15-month investment incentive to support business investment and economic growth by accelerating depreciation deductions. Businesses with an aggregated turnover of below $500 million will be able to immediately deduct 50% of the cost of an eligible asset on installation.
Eligibility: The asset must be acquired and installed ready for use between 12 March 2020 and 30 June 2021. Find out more.
Temporary relief for financially distressed businesses
Includes measures to ease pressure on businesses as they trade through COVID-19:
- increase the amount for which creditors can issue a statutory demand from $2,000 to $20,000 and the time to respond to demands has increased from 21 days to 6 months.
- the amount for which creditors can initiate bankruptcy proceedings has increased from $5,000 to $20,000, and a debtor’s time to respond to a bankruptcy notice will increase from 21 days to 6 months.
- directors will be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business. This will relieve the director of personal liability that would otherwise be associated with the insolvent trading.
- to deliver regulatory certainty at a time when Parliamentary sittings will also be disrupted, the Treasurer will be given a temporary instrument-making power in the Corporations Act 2001 to temporarily amend 3 provisions of the Act to provide relief from specific obligations or to modify obligations to enable compliance with legal requirements during the crisis.
Eligibility: All businesses. Find out more.
Income support for sole traders and self-employed
Sole traders, partners, directors and businesses that run through a Trust may also be eligible for JobKeeper or Jobseeker payments.
Eligibility: If a business has more than one director or partner, only one will be eligible for JobKeeper payments. Find out more.
Early access to superannuation
Sole traders whose business have been suspended or who have had at least a 20% reduction in turnover are eligible to withdraw up to $10,000 of their superannuation savings before 1 July 2020. A further $10,000 will be available from 1 July 2020 for approximately 3 months (exact timing will depend on legislation).
Eligibility: Sole trader with business suspended or with a reduction in turnover of 20% or more. Find out more.
Relief for commercial tenants
Commercial tenant evictions are on hold for the next 6 months for tenants unable to meet rent due to COVID-19. A new mandatory Code of Conduct outlines a set of good faith principles that landlords and tenants must adopt during rent discussions and negotiations.
Eligibility: Applies to businesses with annual turnover up to $50 million, that are eligible for JobKeeper payments. Find out more.
Assistance for affected regions, communities and industries
The Government has set aside an initial $1 billion to support those regions, communities and industries that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.
Eligibility: To be advised. Find out more.
International Freight Assistance Mechanism
The Government is providing $110 million to assist exporters get produce into key overseas markets.
Eligibility: Produce and markets including: Seafood, premium red meat, dairy, horticulture, including fruits, packaged salad or vegetables.
To markets in China, Japan, Hong Kong, Singapore, and United Arab Emirates. Find out more.
Supporting the flow of Credit
The Australian government has introduced a range of measures to support the flow of credit through to businesses, including a guarantee scheme and other financial and banking regulatory changes.
Eligibility: Various. Find out more.
Australian Tax Office administrative relief
In addition to other measures, the ATO has indicated it will offer tailored support for owners or directors of businesses that are impacted by COVID-19, which may include:
- Payment deferrals
- Changing the GST reporting cycle
- Varying PAYG instalments
- Delays to interest and penalty payments
- Low interest payment plans
Eligibility: All affected businesses. Find out more.
For support or to discuss your options about your business needs, you can contact your IBA relationship manager directly or register your interest. We are here to help.