Government Stimulus and Relief Packages

As you would all be aware, over the weekend the government announced further financial measures to assist businesses and individuals.

JobKeeper Payment

The main advice has been around the JobKeeper Payment package. Please find attached some facts sheets from the Australian Government Treasury Department that will explain more fully.

Essentially, this package is intended to ensure that eligible employers remain connected to their workforce and to assist businesses restart quickly when the crisis is over.

All businesses, including sole traders, who have an annual turnover of under $1 billion and have a reduction in their turnover by 30% or more, or larger businesses that have a turnover reduction of 50% or more will be eligible. The business must register their application to the ATO and provide evidence of the reduction in turnover in addition to payroll details.

All full time and part time employees will be eligible, as well as casual employees over 16 years of age who have been employed for more than 1 year in the business.

Employers will be paid $1,500 per fortnight for each eligible employee, which must be passed in full to the employee through their normal pay processes.

Registration of interest is now open, with the first payments expected to be received in early May. To register interest for your business, please go to the following link:

https://www.ato.gov.au/general/gen/JobKeeper-payment/

Please note: This package has not yet been passed into law and so some eligibility or application criteria may still change.

ATO Advice

As each stimulus package has been introduced we have noted that the initial advice often didn’t include some eligibility criteria for various measures available.  The ATO has now set up a COVID-19 page which has links to each of the measures available for further information, which is being updated regularly to answer some of the more commonly asked questions. The ATO is experiencing very high call volume so if you have queries about these measures, please contact us or go to the following web page for further explanation.

https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/

Cash Flow Boost

One of the areas that have resulted in a lot of queries is the ‘Boosting cash flow for employers’ package. As previously advised the initial package was increased to a refund of 100% of PAYG Withholding tax for the March 2020 quarter. The initial payment is between a minimum of $10,000 and maximum of $50,000. To receive this you must lodge your March BAS. Early lodgement will not result in an earlier payment, which will be made directly to your ATO Integrated Client Account. If your account remains in credit after this, then the refund will be issued to you from 28 April. If your ATO Integrated Client Account has an existing debt, the credit will be used to offset this debt.

To be eligible for this cash flow boost, you must have;

  • held an ABN on 12 March 2020 and continue to be active
  • have an aggregated annual turnover under $50 million (generally based on prior year turnover)
  • made eligible payments you are required to withhold from (even if the amount you need to withhold is zero).

In addition, you must also have either:

  • derived business income in the 2018–19 income year and lodged your 2019 tax return on or before 12 March 2020

OR

  • made GST taxable, GST-free or input-taxed sales in a previous tax period (since 1 July 2018) and lodged the relevant activity statement on or before 12 March 2020.

Tenancy Arrangements

The initial announcement around tenancy arrangements has yet to be finalised, with the National Cabinet again planning to meet later in the week to discuss residential tenancies. National Cabinet has agreed to a moratorium on evictions over the next six months for commercial and residential tenancies in financial distress who are unable to meet their commitments due to the impact of coronavirus.

The advice around commercial tenancies is at this stage the following:

  • a short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial and residential tenancies impacted by severe rental distress due to coronavirus for the next 6 months;
  • tenants and landlords are encouraged to agree on rent relief or temporary amendments to the lease;
  • the reduction or waiver of rental payment for a defined period for impacted tenants;
  • the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress;
  • commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by coronavirus;
  • landlords and tenants not significantly affected by coronavirus are expected to honour their lease and rental agreements; and
  • cost-sharing or deferral of losses between landlords and tenants, with Commonwealth, state and territory governments, local government and financial institutions to consider mechanisms to provide assistance.

If you have any further queries about these measures, please don’t hesitate to Contact Us.