Second Federal Stimulus Package

23/03/2020 12:00am

The Australian Government announced a second set of economic responses which, combined with previous actions, total $189B.

We want to assure all of our clients that we are here for you, to assist and advise as always. We are working to communicate relevant and quickly-evolving government, and other support packages.

Key Measures

  • Instant Asset Write-off: will be increased from $30,000 to $150,000 from 12 March 2020 until June 2020
  • Asset investments: a 50% instant deduction for eligible costs of (new) assets upon installation with existing depreciation rules applying to the balance of the asset cost until 30 June 2021
  • Tax-free payment: a $10,000 – up to a maximum $50,000 tax-free payment that is equal to 100% of PAYG withheld from salaries and wages over six months. Under the minimum amount, you do not need to be withholding PAYG from salary and wages to be eligible.

Under the enhanced scheme, the maximum payment has been increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.

The payment will be delivered by the ATO as an automatic credit in the activity statement system from 1 April 2020 upon lodging your March 2020 activity statement. Where the credits are greater than the required payments a refund will be made within 14 days post lodgement of each activity statement.

An additional payment is also being introduced in the July – October 2020 period. Eligible employers will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received (being between $10,000 and $50,000).

The additional payments will be delivered as an automatic credit in the activity statement system. The timing of the payment will be received monthly, upon lodgement of the June, July, August and September 2020 activity statements (25% for each month) for monthly activity statement lodgers, or upon the lodgement June and September 2020 activity statements (50% for each quarter) for quarterly activity statement lodgers.

Eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.

Examples to show the timing of these credits and or refunds

Monthly Instalment Activity Lodgers

Month PAYG withheld
for the month
Credit received for 
boosting cash flow
payments
Credit received
for additional entitlement
Credit or refund
applied from
Mar 2020 $8,000 $24,000*   1 Apr 2020
Apr 2020 $11,000 $11,000   1 May 2020
May 2020 $18,000 $15,000**   1 Jun 2020
Jun 2020 $15,000 Nil $12,5000*** 1 Jul 2020
Jul 2020     $12,5000*** 1 Aug 2020

Aug 2020

    $12,5000*** 1 Sep 2020
Sep 2020     $12,5000*** 1 Oct 2020

* = entitlement is 3 times the PAYG for the March month
** = the $50,000 maximum credit has been reached
*** = 25% of the total Boosting Cash Flow entitlement (in this case $50,000)

Quarterly Instalment Activity Lodgers

Quarter PAYG withheld
for the quarter
Credit received for 
boosting cash flow
payments
Credit received 
for additional entitlement
Credit or refund
applied from
Mar 2020 $15,000 $15,000   1 Apr 2020
Jun 2020 $14,000 $14,000  $14,500 1 Jul 2020
Sep 2020      $14,500 1 Oct 2020

** = 50% of the total Boosting Cash Flow entitlement (in this case $29,000)

A business that employs apprentices or trainees will be entitled to (they must have less than 20 full-time employees):

  • Tax-free payment: a wage subsidy of 50% (up to a maximum of $21,000 per trainee/apprentice) of the apprentice or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020. Further details of this are still to be clarified, however contact with your Apprenticeship providers will be the first point of contact.

Lower-income Australians will be entitled to:

  • One-off payment: a one-off tax- free payment of $750 to social security, veteran and other income support recipients and eligible concession cardholders.

The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020.

Regions affected by COVID-19 will be entitled to:

  • Initial $1B allocation: in support of regions and communities that have been disproportionately affected by the economic impacts of COVID-19 – including those heavily reliant on tourism, agriculture, and education.

Early Access to Superannuation

The Government is allowing individuals who are unemployed, eligible to receive a JobSeeker payment, youth allowance for job seekers, parenting payment, special benefit, farm household allowance (on or after 1 January 2020), you were made redundant, your hours or income has been reduced by a least 20% due to COVID-19 are able to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
 
Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

Administrative Measures announced by the ATO:

  • Deferring by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise
  • Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
  • Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
  • Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
  • Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

Employers will still need to meet their ongoing super guarantee obligations for their employees.

Prime Minister Scott Morrison has also foreshadowed a third round of stimulus measures that may be announced in the next six months.

Back to COVID-19 Support Measures