COVID-19 has created an unprecedented climate of fear and uncertainty all around the world. As well as the tragic deaths that this virus is causing, the economy and our society is suffering.
Be assured that it will not always be this way. For now, everyone can work together to contain the virus and support one another so that we can persevere through it.
The most difficult part right now is the interruption to our way of life. Businesses being forced to shut down and people told to socially distance themselves, health professionals fearing the worst, and most of us not knowing how we will be paying the bills in the near future if we are forced to take unpaid leave or lose our jobs.
There is some relief available, and below is a brief summary of how.
Federal Government stimulus #1
The Government announced a relief package targeting employers and welfare recipients.
This includes a tax-free 100% refund (increased from 50%) of withholding tax that is paid on wages reported for the period January - June 2020, capped at $50,000 (increased from $25,000). The hope is that this cash injection will allow certain businesses to continue paying wages or spend on other business costs to boost the economy.
Part of this package includes a minimum payment of $10,000 for the period January-June 2020 and an additional $10,000 minimum payment for the period Jul-Oct 2020 (and further maximum payment of $50,000, bringing the total cash boost to $100,000 per employer). This means that if you do not have withholding tax obligations, you will still be entitled to a credit of $10,000 and this credit will be refundable if you do not have to offset it against other tax obligations (such as GST).
On an individual level, recipients of government payments such as family tax benefits, Newstart allowance and other income support recipients will receive $750. This will be paid automatically and there is no need to register for this payment.
Instant asset write off threshold extended to $150,000 (from $30,000) for assets purchased until 30th June 2020.
Wage support has been announced for employers who hire apprentices and trainees. Eligible employers will be able to apply for payments equal to 50% of apprentice and trainee wages paid between January and June 2020. You must have already been training an apprentice or trainee on 1st March 2020 to be eligible.
Click here for more information about the stimulus package
Federal Government stimulus #2
Just announced -
* cash payments for small business up to $100,000 (this has been updated in Stimulus #1 above)
* Newstart allowance to double
* access to up to $10,000 from super
More info to come
Click here to read the Treasury’s factsheet on Cash flow assistance for business.
NSW Economic stimulus
The NSW government announced that they will waive payroll tax for businesses with payrolls up to $10m for wages paid between April and June. They are also increasing the payroll tax threshold from 1st July to $1m. This will save more than $500 million for NSW employers.
Various licence fees and payments will be waived for many small businesses including bars, restaurants and trades.
You can read more about the NSW government stimulus here
Banks and Non-bank Financial Institution support
If you are worried about how you are going to pay your mortgage because you are forced to go on unpaid leave or you have lost your job, get in touch with your lender as soon as possible. Most of them will have a financial support package available which can allow you to defer your payments by up to 6 months, capitalise your repayments or pay interest-only for a certain period. Being able to defer Loan repayments when your earnings have come to a halt will give a lot of financial and mental relief to individuals and business owners.
Here are some lenders who can offer support - check your lender website to see how they can assist you in times of crisis.
https://www.commbank.com.au/latest/coronavirus.html?ei=hp-ban-cvp-default-coronavirus
https://www.nab.com.au/personal/customer-support/covid19-help
https://www.westpac.com.au/business-banking/small-business-relief/.html
https://media.anz.com/posts/2020/03/anz-launches-major-covid-19-support-package