For many Australians, myself included, the prospect of having less work or being unemployed because of Coronavirus shutting industries down is highly likely.
So the big question is how can you make the most of government assistance?
To date the Australian Government has made several stimulus announcements to support workers and the economy.
According to Westpac the unemployment rate will jump to 11% by June from the current 5.1%.
Westpac said job losses as a result of the Coronavirus could be as high as 40% in arts and recreation services and 29% in hospitality – both are industries with more female workers than male, according to the Financy Women’s Index.
Kate Hills, accountant at Whitehead Dingley and Betar says there’s likely to be something in the government’s recent announcements for everyone from employers, to sole traders, casual workers and retirees.
What are the tax concession that all Australian workers need to know about
* Concession for existing Australia Tax Office (ATO) payment arrangements: The ATO is providing a six-month concession for existing payment arrangements, allowing for reduced monthly payments during this period. The payment arrangement will then be renegotiated after this initial six-month period.
* The ATO is also allowing a four-month deferral of future ATO payments, including Business Activity Statements (BAS), income tax and Fringe Benefit Tax (FBT). There will be no repayments, penalties or interest required during this time.
* The Pay As You Go (PAYG) instalment on the March 2020 quarter activity statement can also be varied if required. There is also an option to claim a refund of PAYG instalments paid in the September 2019 and December 2019 quarters.
* The Government will be providing a PAYG withholding refund of up to $100,000 to entities with a turnover of less than $50 million that employ workers. Not-for-profit entities, including charities, will also be eligible.
Up to June 30, 2020, employers will receive payments equal to 100% of their PAYG withholding up to a maximum of $50,000. The minimum payment will be $10,000 even if there is no tax required to be withheld.
From July – October 2020, an additional payment equal to the total payment received up to June 30, 2020 will be paid.
This means that eligible entities will receive at least $20,000 and up to a total of $100,000 under both payments.
This will be a tax-free payment and will be automatically calculated by the ATO. There are no new forms required.
What’s in the government stimulus for apprentices and trainees
Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the nine months from January 1, 2020 to September 30, 2020.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter). The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee.
To be eligible the apprentice or trainee must have been in training with a small business as at March 1, 2020.
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by December 31, 2020.
What’s in the government stimulus for sole traders, self-employed and those that have lost their jobs
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.
A Jobseeker Payment and Youth Allowance Jobseeker criteria will provide payment access for permanent employees who are stood down or lose their employment.
Sole traders, the self-employed, casual workers, and contract workers who have seen their hours, work, or income fall by 20% or more as a result of the virus will be eligible for the Coronavirus supplement.
The Coronavirus supplement can be claimed on your myGov account (once you are able to logon!) and payments will commence from April 27, 2020.
Need urgent cash? Temporary access to your superannuation is available
People will be able to access up to $10,000 of their superannuation before July 1, 2020. They will also be able to access up to a further $10,000 from July 1, 2020 for approximately three months.
To apply for early release of superannuation, you must satisfy any one or more of the following requirements:
a. you are unemployed; or
b. you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
c. on or after January 1, 2020: you were made redundant; or your working hours were reduced by 20% or more; or if you are a sole trader – your business was suspended or there was a reduction in your turnover of 20% or more.
People accessing their superannuation early will not need to pay tax on amounts released, and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.
Eligible individuals will be able to apply online through myGov from mid-April 2020.
What’s in the government stimulus for pensioners
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50% for the 2020 and 2021 income years.
What’s in the government stimulus for mortgage holders
Most lenders have announced that they will defer loan repayments for up to six months.
What’s in the government stimulus for small to medium sized businesses
The Government will be providing a guarantee of 50% to Small and medium-sized enterprises (SMEs) lenders for new unsecured loans to be used for working capital.
SMEs with a turnover of up to $50 million will be eligible to receive these loans. The Government will provide eligible lenders with a guarantee for loans with the following terms:
a. Maximum total size of loans of $250,000 per borrower.
b. The loans will be up to three years, with an initial six-month repayment holiday.
c. The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
What’s in the government stimulus for small businesses using credit
The government is also providing an exemption from responsible lending obligations for lenders providing credit to existing small business customers.
This exemption is for six months, and applies to any credit for business purposes, including new credit, credit limit increases, and credit variations and restructures. Further, banks will have access to at least $90 billion in funding at low interest rates.
Ms Hills says that interested small businesses should “speak with their bank immediately about requesting a deferral of both personal and business loans, as well as requesting access to additional loan funds if required.”
