Further to the brief introduction to this measure mentioned in this post, here are more details about Australian Government’s Cashflow assistance for businesses.

The key qualifying measure for this one is that organisations must employ people. If your organisation don’t employ anyone, you won’t quality for this measure.

Payments available:

The government will provide tax-free payments up to $1,000,000 for eligible small and medium sized entities (SMEs), and not for profits (including charities, “NFPs”) that employ people, with a minimum payment of $20,000.

The payments will be made in 2 stages. The first payment will be available from 28 April 2020. Employers will receive a payment equal to 100% of their salary and wages withheld, with the maximum payment being $50,000. In addition, the minimum payment will be $10,000. The second cash flow boost payment for employers will be made from 28 July 2020. Eligible entities will receive an additional payment equal to the total of the first cash flow boost payment received.

Eligibility:

  • Small and medium sized business entities and NFPs with aggregated annual turover under $50m and that employ workers.
  • Businesses are deemed to be SME based on turnover for the most recent income year (Y/E 30/06/2019) or if the Commissioner is “reasonably satisfied” that the entity will be a SME in the current income year.
  • The qualifying entity must continue to be active over the next 6 ‘months.
  • The payments will only be available to active eligible employers that held and ABN at 12 March 2020 and derived assessable income from carrying on a business in the 2018/2019 year.

Payment and processing

  • The payments will be automatically calculated by the ATO and will flow automatically through the ATO. There are no new forms required.
  • The payments will be tax free.
  • All payments will be delivered by the ATO as credit to the entity upon lodgement of their activity statements. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.
  • The first cash flow boost payments will be delivered by the ATO as an automatic credit in the activity statements system from 28 April 2020, upon employers lodging eligible (upcoming ) activity statements.
  • If entities lodge early, the ATO confirms that, they will not receive the fist cash flow boost payment before 28 April 2020.
  • Eligible employers that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100% of the amount withheld, up to a maximum payment payment of $10,000, even if they are not required to withhold tax.
  • Note that the amount of cash boost an employer receives in the second payment period doesn’t relate to the tax withheld in that period. So, if the employer has to let three quaters of staff go on 30 June 2020, the employer still gets the amount based on the original pre COVID-19 employee tax withheld in the second payment period.
  • Payment processing will depend on whether the taxpayer is a monthly or quarterly remitter.
  • Monthly lodgers will get a payment equal to a quarter of their first cash flow boost payment following the lodgement of their June, July August and September BAS’s.
  • Quarterly lodgers, will get a payment equal to half of their total fist cash flow boost payment following the lodgment of their June an September BAS’s (up to a total of $50,000).

Who does not quality for the cashflow assistant package?

  • Any business without employees (eg sole traders)
  • Any business that does not pay wages, eg trusts that pay family members by way of trust distributions, companies that pay dividends, partnerships where partners take drawings.

Consider this:

  • If sole trader A pays a casual employee $5,000 in wages, he/she will receive $20,000 through the cashflow assistance payment
  • If sole trader B pays a contractor $5,000, the payments are not classified as wages and he/she won’t get any cashflow assistant payment.

Note the following ATO comments:

“You will not be eligible for cash flow boosts if you (or a representative) have entered into or carried out a scheme for the purpose of :

  • becoming entitled to cash flow boosts when you would otherwise not be entitled for;
  • increasing the amount o the cash flow boots.

This may include restructuring your business or the way you usually pay your workers to fall withing the eligibility criteria, as well as increasing wages paid in a particular month to maximise the cash flow boost amount.

Any sudden changes to the characterisation of payments made may cause us to investigate whether the payments are in fact wages. If the payments are wages, we may consider the characterisation of past payments, including whether they should have been subject to PAYGW and whether super guarantee contributions should have been made. You may have FBT obligations that have not yet been met.”

As mentioned in the previous post:

Business impacted by the Coronavirus will be able to access a subsidy from the government to continue to pay their employees.

An affected employer will be able to claim $1500 per fortnight per eligible employee from 30 March 2020 for a maxiam period of 6 months.

The subsidy will start from 30 March, with the first payment to be received by the first week of May 2020.

Payments will be made to employers by ATO monthly in arrears.

A person receiving job seeker payment can’t also receive the job keeper payment.

Now, let’s lay out more details about JobKeeper payments.

Which employers are eligible for JobKeeper payments?

Employers will be eligible for the subsidy if:

  • your business turnover is less than $1 billion and your turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month); or
  • your business has a turnover of $1 billion or more and your turnover will be reduced by 50% relative to a comparable period a year ago (of at least a month); and
  • your business is not subject to the Major Bank Levy.

Eligible employees must have been employed by the employer as at 1 March 2020. The employer has to confirm that each eligible employee is currently engaged in order to receive JobKeeper payments.

Not for profit entities (including charities) and self employed individuals (business without employees) that meet the turnover tests (turnover less than 1 billion & turnover will be reduced by 30% compared to the same time last year) that apply for businesses are eligible to apply for JobKeeper payments.

Eligible employees are employees who

  • are currently employed by eligible employer including those stood down or rehired;
  • were employed by the employer as at 1 March 2020;
  • are full time, part time or long term casuals (a casual employee employed on a regular basis for longer than 12 months as at 1 March 2020);
  • at least 16 years of age;
  • are an Australian citizen, the holder of a permanent visa, a protected special category visa holder, a non-protected special category visa holder who has been residing continuously in Australia for 10 years or more, or special category (subclass 444) visa holder; and
  • are not in recipient of JobKeeker payments from another employer.

Obligation on employers

To receive the JobKeeper payment, employers must:

  • register an intention to apply on the ATO website and asset that they have or will experience the required turnover decline;
  • provide information to ATO on eligible employees, including the number of eligible employees engaged as at 1st March 2020 and these currently employed by the business, including those stood down or rehired;
  • ensure that each eligible employee receives at least $1500 per fortnight before tax;
  • notify all eligible employees that they are receiving the JobKeeper payments;
  • Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

Obligation on employees

Employees will receive a notification from their employer that they are receiving the JobKeeper payments. Most employees will need to do nothing further.

Employees in the following circumstances will have additional obligations:

  • Employees have multiple employers must notify the employer that is their primary employer as one employee can’t be in recipient of JobKeeper payment from more than one employer.
  • Employees that are not Australian citizen must notify their employer of their visa status, to allow their employer to determine if they are an eligible employee.
  • Employees are currently in recipient of an Income Support payment must notify Service Australia of their new income.

What employees will get

Employees will be able to receive this payment in a number different ways:

  • If your ordinary income is $1500 or more per fortnight before tax, you’ll continue to receive your regular income. The JobKeeper payment will subsidise that first $1500 of your income.
  • If your ordinary income is less than $1500 per fortnight before tax, your employer must pay you a minimum of $1500 per fortnight before tax.
  • If you have been stood down, your employer must pay you $1500, as a minimum per fortnight before tax.
  • If you were employed before 1 March 2020, subsequently ceased employment and then were re-engaged by the same eligible employer, you will receive $1500 as a minimum per fortnight before tax.

Employers must continue to pay the superannuation guarantee on regular wages but it is up to the employer whether they pay superannuation on additional JobSeeker payments.

Businesses without employees

Sole traders, self employed can participate in this scheme and will need to register with ATO.

Business without employees will need to:

  • provide a ABN for their business
  • nominate an individual to receive this payment
  • provide that individual’s tax file number and provide a declaration as to recent business activity

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 individuals bank account.

Click to read the lastest Jobkeeper information and legislation from Australian Government.

The Federal Government is making available access to the Jobseeker Payment (which now includes the former “Sickness Benefit”) for those who are over 22 and under pension age and unable to earn because of mandatory isolation due to Covid-19. There is an income test on households, which has been increased to $79,762 per annum, and as well as the Jobseeker Payment there will be a special extra “top up” payment of $550 per fortnight.

The waiting period to qualify for Jobseeker has been waived, so if you find yourself eligible and in need of accessing the benefit because you are not permitted to work you should apply online if you have a MyGov account.

Detailed instructions are available here at Centrelink website.

The Government has also waived the requirement for an employment separation certificate.

Here are more details:

Fortnightly payment for job seekers and sole traders etc

A supplement of $550 per fortnight, effectively doubling the current payment, will be available for new and exciting social security recipients from 27 April 2020.

This Coronavirus supplement will be paid for 6 moths to both existing and new recipients for the JobSeeker Payment, Sickness Allowance, Youth Allowance for jobseekers, Parenting Payment Partnered, Parenting payment Single, Partner Allowance, Sickness Allowance and the Farm Household Allowance.

Eligible recipients of these payment will receive the full amount of $550 Coronavirus supplement on top of their payment each fortnight.

Fortnightly payment – expanded eligibility

From 27th April 2020, the eligibility and qualification criteria for Job Seeker Payment and Youth Allowance for Job Seeker Payment have been expanded for 6 months to include:

  • A sole trader, self-employed, a casual or contractor whose income has reduced. They will be able to meet mutual obligation requirements by continuing operating their businesses. Sole Traders and Self-employed applicants will need to make a declaration that their business has been suspended or had turnover reduced significantly.
  • A permeant employee who has been stood down or lost their job
  • People caring someone infected or in isolation as a result of contact with Corona Virus.
  • Students who receive Youth Allowance, AUSTUDY OR ABSTUDY (Living Allowance).

Eligibility conditions to qualify for some payments have been waived temporarily, including the:

  • Assets test ( waived for 6 months from 25th March 2020)
  • Ordinary waiting period ( already waived until 12 June 2020)
  • Liquid assets waiting period
  • Seasonal workers preclusion period
  • Newly arrived residents waiting period

From 27th April 2020, the requirement for an Employment separation Certificate, proof of rental arrangements and verification of relationship status has been temporarily removed.

Partner income test has been relaxed to ensure that an eligible person can receive the JobSeeker Payment and associated coronavirus supplement, providing their partner earns less than $3,068 per fortnight, around $79,762 per year.

Fortnightly payment – making a claim

To claim the supplement online, people who do not already deal with Services Australia will need to:

  • set up a myGov account
  • call to verify their identity, and get a link to their Centrelink online account.

Applicants for Jobseeker Payment and Youth Allowance Jobseeker will need to make an initial declaration about their identity, residency status, income and your particular economic circumstances (that they have been made redundant, or had their hours reduced (including to zero)) as a result off the economic downturn due to corona virus.

In the case of sole traders and the self-employed, applicants will make a declaration that their business has been suspended or had turnover reduced significantly by the virus.

Further payment to income support recipients

Two $750 tax free payment will be made to social security and veteran income support recipients and eligible concession card holders.

  • The first $750 payment will be made from 31 March 2020 to people who will have been on one of the eligible payment any time between 12 March 2020 and 13 April 2020.
  • The second payment will be available to those eligible for certain payments and concession card holders on 10 July 2020. The second payment will be made automatically on 13 July 2020.

There are two criteria to receive the first $750 payment. First of all, you’ve got to be an Australia Resident. Secondly, you have to have been receiving or be eligible to receive any of the below benefits at any time from 12 March to 13 April:

If you have lodged a claim for one of the eligible payments or concession cards at any time from 12 March to 13 April, and the claim is subsequently granted, you’ll also receive the first $750 payment. An eligible person doesn’t have to apply for the first $750 payment. The payment will be made automatically from 31 March, with most people receiving it by 17 April 2020.

The second $750 payment has slightly different criteria. Almost everyone who’s getting the first $750 will be eligible for it EXCEPT those people who are getting the $550/fortnight Corona virus supplement. In other words, to be eligible for the second payment, one much be an Australian resident, and receiving one of the payment or holding one of these concession cards in the table above that were eligible for the first $750 payment, but excluding the below payments that’ll qualify for the coronavirus supplement:

  • job seeker payment
  • youth allowance for job seeker
  • parenting payment (single or partnered)
  • farm household allowance
  • special benefit

Job Keeper Payment

Business impacted by the Coronavirus will be able to access a subsidy from the government to continue to pay their employees.

An affected employer will be able to claim $1500 per fortnight per eligible employee from 30 March 2020 for a maxiam period of 6 months.

The subsidy will start from 30 March, with the first payment to be received by the first week of May 2020.

Payments will be made to employers by ATO monthly in arrears.

A person receiving job seeker payment can’t also receive the job keeper payment.

More details about the Job keeper payment is included in another post.

Superannuation Early Release Scheme

Individuals affected by Coronavirus are entitled to release tax-free up to $20,000 over two financial years, provided they meet certain criteria.

Each person is permitted to have up to two releases of $10,000: one for an application made during 2019 – 2020 financial year and one for an applicate made during 2020 – 2021 financial year.

Amounts released to individuals under this new condition of release are none accessible, non exempt income. In simple terms, tax free. Any amounts released are not taken into account under any income or means tests in relation to benefits. This means they will not affect Centerlink or Veterans’ affairs payments.

Superannuation early release eligibility

  • One must be either unemployed or eligible for job seeker payment, parenting payment, special benefit, farm household allowance or youth allowance (other than a person is undertaking full time study or is a new apprentice).
  • Alternatively, on or after 1 Jan 2020, a person must have been made redundant or their working hours have been reduced by more than 20% (including to zero).
  • A sole trader will be eligible if, on or after 1 Jan 2020, their business was suspended or has suffered a reduction in turnover of 20% or more.
  • The regulations do not specify any minimum documentation or evidentiary conditions for meeting those requirements.
  • The requirement about a person’s eligibility to receive the various payments listed above can be satisfied if the person is receiving such a payment or is eligible to receive such a payment payment. this allows a person to apply for the determination quickly instead of having to wait for the payment to commence.

Applications:

Eligible individuals must apply directly to ATO through myGov to access up to $10,000 of their superannuation before 1 July 2020.

Eligible individuals will able to access to up a further $10,000 from 1 July 2020 until 24 September 2020. That is an application for coronavirus early release can’t be made 6 months after the day the regulation commences. Provided an application is made during this period, the commissioner can make the determination after the period has expired.

After the ATO has processed the application, they will issue the person a determination, which can’t exceed $10,000.

ATO will also provide a copy of this determination to the superfund which will then make a payment to the individual without the person needing to apply to the superfund directly.

A person can’t make multiple applications in the same financial year to release more than $10,000 in that year. Likewise, a person who requests an amount less than $10,000 can’t make a subsequent application in the same financial year to release a further amount up to the $10,000 total limit.

Cashflow assistance for business

The key qualifying measure for this one is that organisations must employ people. If your organisation don’t employ anyone, you won’t quality for this measure.

The government will provide tax-free payments to up to $100,000 to eligible small to medium sized entities (SMEc) and not for profit entities (including charities NFPs) that employ people with a minimum amount of $20,000. More details to be included in another post coming soon.

Wage subsidies for apprentices and trainees

The government is providing support to small businesses to retain their apprentices and trainees.

Employers with less than 20 full time employees can apply for a wage subsidy for 50% of of the apprentice’s or trainee’s wage paid during the 9 months period from 1 January to 30 September 2020.

Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee for the 9 months period.

The apprentice or trainee must have been in training with a small business as at 1 March 2020.

Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.

FBT emergency assistance

There’s an exemption for FBT where certain benefits are provided to employees in an emergency situation.

The ATO has accepted that in the context of COVID-19, the emergency assistance exemption applies if the assistance is provided to an employee who is located in high risk area, and has been relocated or otherwise required to self-isolate.

If employers provide or pay for emergency accomodation, meals, food transport or other assistance ( such as face masks, sanitisers etc) for an employ who is or is at risk of becoming sick of COVID-19, these should be exempt from FBT, if this benefit is provided for the employee’s immediate relief.

With the increase of employee working from home, employers may provide employees with laptops, printers or other portable electronic devices to enable them to work from home. These should be exempt from FBT providing they are used primarily for the employee’s employment.

Backing business investment

The BBI measure package is a separate concession for purchase of new depreciating assets:

A tax payer will be able to deduct 50% of the cost of a new deprecating asset purchase between 12 March to 30 June 2020 (existing second hand assets and Div 43 assets are excluded).

The deduction is made available “on installation” which must occur before 30 June 2021.

No entity has previously claimed depreciation deductions (including instant assets write off) in respect of the asset

The remaining 50% of the cost of asset will be recovered over the life of the asset through usual depreciation rules.

This measure only applies to tax payers with aggregated turn over under $500 million.

The measure doesn’t apply if the asset’s depreciation is worked out under a low value of software development pool or in relation to primary production depreciating assets such as water facilities, fodder storage, horticulture plants and fencing assets (available for immediate deduction already anyway).

The measure doesn’t apply where a commitment to acquire or construct the asset was entered in before 12 March 2020.

Instant Asset Write Off

The instant asset write off regime has been expanded to allow an immediate deduction for purposes of new and used depreciating assets made from 12 March to 30 June 2020. To be eligible, the assets must cost less than $150,000. The current cost limit is $30,000. The business’s annual turnover must be less than $500 million. The current turnover limit is $50 million per annum

The threshold applies to GST exclusive cost of the asset. The instant asset write off is due to revert to $1,000 for small businesses from 1 July 2020.