We are still shaking our heads as to all of this stuff … but, we will all get through this – but not without supporting one another. Further to announcements by Governments & Banks over the past two weeks, the Federal Government has now released Stimulus Package Round 2.
Below is a Summary of the announcements – there are summaries for each of the initiatives which can be accessed via the below links.
Government announcements
The Commonwealth Government has yesterday released the second stage of its economic stimulus package to cushion the economic impact of the coronavirus and help us all on a road to recovery.
$189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business.
How we can help
We are here to assist you to determine your eligibility for these various payments and concessions, and assist with the application processes, if applicable.
‘The devil in the detail’ will be released over the next few days as Parliament passes this new legislation, but in the meantime, please contact us to discuss any questions that you may have. If our phones are busy, please send through your queries by email. We are endeavouring to get back to everyone as soon as we can.
The Directors,
Tim, Warren and Josh.
Support for workers and households
Coronavirus supplement
The Government is temporarily expanding eligibility to income support payments, and establishing a new time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.
The Coronavirus supplement will be paid for the next 6 months. Eligible income support recipients will receive the full amount of the $550 Coronavirus supplement on top of their payment each fortnight.
Payments to support households
In addition to the $750 stimulus payment announced on March 12, 2020, the Government will provide a further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement.
This second payment will be made automatically from July 13, 2020 to around 5 million social security veterans and other income support recipients, as well as eligible concession card holders.
The first payment will be made from March 31, 2020 to people who would have been on one of the eligible payments any time between March 12, 2020 and April 13, 2020.
Early release of superannuation
The Government will allow individuals in financial stress, as a result of the Coronavirus to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21.
Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before July 1, 2020. They will also be able to access up to a further $10,000 from July 1, 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Temporarily reduce superannuation minimum drawdown rates
The Government is temporarily reducing superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
Reducing social security deeming rates
On top of the deeming rate changes made at the time of the first package, the Government is reducing the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA.
As of May 1, 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent.
Business assistance to keep people employed
Boosting cash flow for employers
The Government is providing up to $100,000 to eligible small and medium sized businesses, and not‑for-profits (including charities) that employ people, with a minimum payment of $20,000. These payments will help businesses’ and not-for-profits’ cash flow, so they can keep operating, pay their rent, electricity, other bills, and retain staff.
Under the enhanced scheme from the first package, employers will receive an initial payment equal to 100 per cent of their salary and wages tax withheld (up from 50 per cent), with the maximum payment being 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 available from 28 April 2020.
The payments are tax free, and there will be no new forms. Payments will flow automatically through the ATO.
Small and medium business entities with aggregated annual turnover under $50 million and that employ workers are eligible. NFPs entities, including charities, with aggregated annual turnover under $50 million, and that employ workers, will now also be eligible.
An additional payment is also being made from July 28, 2020. Eligible entities will receive an additional payment equal to the total of all of the ‘Boosting Cash Flow for Employers’ payments received.
Protection & financial support for businesses to stay afloat
Coronavirus SME Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SME’s) to get access to working capital to help them get them through the impact of the coronavirus. Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SME’s.
The Government’s support will enhance lenders’ willingness and ability to provide credit to SME’s, with the Scheme able to support $40 billion of lending to SME’s. This complements announcements made by Australian Banks to support small businesses with their existing loans.
The Government will guarantee up to $20 billion to support $40 billion in SME loans.
Providing temporary relief for financially distressed businesses
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company, and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent. The Corporations Act 2001 will be amended to provide temporary and targeted relief for companies to deal with unforeseen events that arise as a result of the Coronavirus.