Supporting Australian workers and business
In a continued effort to support Australian businesses through the impact of the COVID19 pandemic the government has further stimulus measures today aimed at keeping the Australian economy going as smoothly as possible during these extremely challenging times.
The enhanced stimulus package includes both increases in originally announced measures as well as new support for both businesses and households.
Business Assistance aimed at boosting cash flow for businesses and keeping employees in a job.
The previously announced cashflow package for businesses has been extended from $25,000 to a maximum of $100,000. These funds are being offered via the PAYG withholding system as a refund of the PAYG withheld reported on upcoming activity statements lodged.
The funds will be available in two tranches from the March activity statement (payments available from 28th April 2020) and a second tranche from 28th July 2020.
Further the minimum payment available under the scheme has been increased from $2,000 to $10,000 per tranche.
Small and medium business entities with aggregated annual turnover under $50 million and that employ workers are eligible.
Payments will be made automatically upon lodgement of the relevant activity statements and no additional action is required by the employer in order to receive the funding. These payments will also be tax free to recipients.
The treasurer’s announcement advises that by linking the payments to business to staff wage tax withholdings, businesses will be incentivised to hold on to more of their workers.
The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.
Coronavirus SME Guarantee Scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact.
Under the Scheme, the Government will guarantee 50 per cent of new loans issued by eligible lenders to SMEs.
This measure is in addition to those announced by the major banks in terms of help with existing loan commitments.
Support for workers and households
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 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 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 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent.
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 12 March 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 13 July 2020 to around 5 million social security, veteran and other income support recipients and eligible concession card holders. Around half of those that benefit are pensioners.
The first payment will be made from 31 March 2020 to people who will have been on one of the eligible payments any time between 12 March 2020 and 13 April 2020.