Government second stimulus package
Posted by Northadvisory on March 24, 2020
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.
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.
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.