Government second stimulus package
A second Government stimulus package was announced on 22nd March 2020, adding another $66 billion into the economy… with even more on the way.
We have assessed the package with regard to both our business and non-business clients.
Below we outline what it means for you and how North Advisory will be supporting you during the coming months. We are committed to making sure you are fully covered. We highlight the following…
- Sole Traders & Employees
- Small Business (Less than $50 million turnover)
- Employers with Apprentices
- Access to Superannuation
- How North Advisory will assist
Sole traders & Employees
For sole traders, self-employed and employees, the government has confirmed that anyone impacted by the economic downturn triggered by the coronavirus will be able to access the jobseeker payment combined with the coronavirus supplement.
These payments will be significantly increased:
Applicants need to make a declaration to Centrelink that their business has been suspended or had turnover reduced dramatically as a result of the downturn.
Sole traders that become eligible for the jobseeker payment will automatically meet their mutual obligation requirements during this period by continuing to develop and sustain their business.
To qualify for the payment you will have to pass the Income Test but the regular Asset Test is waived.
“A second Government stimulus package was announced on 22 March 2020, adding another $66 billion into the economy… with even more on the way.”
Small Businesses (Less than $50 million turnover)
The latest package ramps up a previous wage subsidy to small businesses. It will be increased from a $25,000 cash refund to a maximum payment of $100,000. The tax-free payment is equal to 100% of the tax that small and medium-sized businesses withhold from their employees’ salary and wages up to a maximum amount of $100,000.
The amount will be paid automatically by the Australian Taxation Office, based on the business’s monthly or quarterly business activity statements. This means it will be directly linked to keeping someone employed, as the tax is calculated and withheld based on a worker’s wage.
Eligible businesses that pay salary and wages will receive a minimum payment of $20,000, even if they are not required to withhold tax.
Employers with Apprentices
In the first package, the Government announced that employers would receive support to keep people in their jobs, with a wage subsidy of 50% of an apprentice’s or trainee’s wage for up to nine months, from 1 January 2020 to 30 September 2020.
Where a small business is not able to retain an apprentice, the subsidy will be made available to a new employer that employs that apprentice, whether that is a large business or a registered training organisation.
Access to Superannuation
Under the changes announced in the second package, the Government will allow individuals ‘in financial stress’ as a result of the coronavirus downturn to have limited access to their superannuation savings.
The amount they can access will be capped at up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21.
You will be able to access your super if you are unemployed or eligible to receive a jobseeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or the farm household allowance.
Additionally, if after 1 January 2020 you were made redundant or your working hours were reduced by 20% or more, you will also be granted access. Sole traders that have their businesses suspended or have a reduction in turnover of 20% or more are also eligible.
“The package delivers support not only to businesses and employers — it’s designed to help workers, sole traders, retirees and vulnerable Australians through the crisis.”
How North Advisory will assist
North Advisory is here to help you navigate this uncertain time. The whole firm has been self-isolating and working from home for more than a week now and we are getting used to the new normal.
As in our previous correspondence, it’s business as usual!
The easiest way to get hold of us is via email. Please don’t hesitate to contact your accountant directly.
Keep an eye out for our next action plan communication… in the coming week we will outline steps we are taking to make sure all our clients receive the maximum benefit from this stimulus.
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
The stimulus was broad-based and inclusive
Addressing not just businesses but also workers, sole traders, retirees and vulnerable households — reflecting a whole-of-economy approach to the crisis.
Small and medium businesses got significant cash-flow support
With up to $100,000 available, helping many stay afloat and retain staff during lockdowns and reduced demand.
Wage-subsidy and welfare-top up measures helped protect incomes and employment
Easing the immediate financial stress on households and preventing a sharp spike in unemployment.
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Frequently Asked Questions
What is the Second Stimulus Package?
It’s a comprehensive economic relief package announced 22 March 2020, injecting A$66.1 billion into the economy to help businesses, workers, retirees and households respond to disruptions from the COVID-19 pandemic.
Who is eligible for support under this package?
Support is aimed at a broad group: small and medium businesses, employers, sole- traders, casual and part-time workers, retirees, welfare recipients, and individuals whose income has been affected by the crisis.
What kinds of assistance does the package include?
The measures include cash-flow support (tax-free payments to eligible employers), wage subsidies, enhanced welfare payments, early access to superannuation, loan guarantees for SMEs, and relaxed insolvency-law obligations for companies under financial stress.
How does this package help small businesses and employers?
Eligible small businesses and not-for-profits could receive up to $100,000 in cash flow support to help continue paying staff and meet operating costs during downturn.
What support is provided to individuals, workers and retirees?
For individuals, the package expanded welfare payments (including temporary supplements to unemployment benefits), allowed early access to superannuation balances for those facing hardship, and provided lump-sum payments or doubled income-support temporarily.
What was included in the Government’s second stimulus package (March 2020) and who was it for?
The second stimulus package (announced 22 March 2020) added $66 billion in support and focused on helping sole traders, employees, small businesses (under $50M turnover), and employers with apprentices. It included increased access to JobSeeker with the Coronavirus Supplement, boosted cash flow payments via PAYG withholding credits (up to $100,000), a 50% apprentice wage subsidy, and temporary early access to superannuation for people in financial stress.
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