FEDERAL GOVERNMENT STIMULUS PACKAGES SUMMARY
CASHFLOW ASSISTANCE FOR BUSINESSES
1. BOOSTING CASH FLOW FOR EMPLOYERS
On 12 March 2020, the Government announced the Boosting Cash Flow for Employers measure. The measure initially provided up to $25,000 to business, with a minimum payment of $2,000 for eligible businesses. Small and medium sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible. To review these measures, visit: https://bit.ly/3djDzk9
The Government has now enhanced this measure as part of the second economic response package. Not-for-profit entities (NFPs), including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment activities at a time where NFPs are facing increasing demand for services.
Under the enhanced scheme, employers will receive a payment equal to 100 per cent of the PAYG withheld from salary and wages (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000. This will be for the March 2020 to June 2020 period.
An additional payment is being introduced for the July 2020 to October 2020 period identical to the first mentioned above. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments
- Small and medium sized business entities and NFPs with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.
- The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
- Eligible employers that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100 per cent of the amount withheld, up to a maximum payment of $50,000.
- Eligible employers that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax. (You must be paying salary & wages which are disclosed in your BAS)
- The payments will only be available to active eligible employers established prior to 12 March 2020. However, charities which are registered with the Australian Charities and Not-for-profits Commission will be eligible regardless of when they were registered, subject to meeting other eligibility requirements.
First Payment Timing:
- The ATO will deliver the payment as a credit to the business upon lodgement of their activity
- Where this place the business in a refund position, the ATO will deliver the refund within 14 days.
- Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.
- Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300 per cent) in the March 2020 activity
Eligibility for Additional Payment
- To qualify for the additional payment, the entity must continue to be active.
- For monthly activity statement lodgers, the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment following the lodgement of their June 2020, July 2020, August 2020 and September 2020 activity statements (up to a total of $50,000).
- For quarterly activity statement lodgers, the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to half of their total initial Boosting Cash Flow for Employers payment following the lodgement of their June 2020 and September 2020 activity statements (up to a total of $50,000)
Timing of Additional Payment
- As for the first payment, credits will be delivered as a credit upon lodgement of the Activity Statement and again where refunds are due, they will be delivered within 14 days
- Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020. Each additional payment will be equal to half of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000)
2. SUPPORTING APPRENTICES AND TRAINEES
Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
- Available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
- Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy.
- Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.
- Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020
- Further information is available at:
- The Department of Education, Skills and Employment website dese.gov.au
- Australian Apprenticeships website at: australianapprenticeships.gov.au
For full details on the second measure visit: https://bit.ly/33Kcn9V
3. JOBKEEPER PAYMENT SCHEME
Enrolment is now open for the government’s $130 billion JobKeeper Payment scheme. The scheme supports businesses significantly affected by the coronavirus to help keep more Australians in jobs.
The JobKeeper payment is open to eligible employers, sole traders and other entities to enable them to pay their eligible employee’s salary or wages of at least $1,500 (before tax) per fortnight. You can enrol for the JobKeeper payment through the ATO’s Business Portal, in ATO online services using myGov if you are a sole trader, or through a registered tax or BAS agent.
Eligible employers will be reimbursed a fixed amount of $1,500 per fortnight for each eligible employee.
Employers need to pay all eligible employees a minimum of $1,500 (before tax) per fortnight to claim the JobKeeper payment. This will be paid to the employer in arrears each month by us. The first payments to eligible employers will commence in the first week of May 2020. JobKeeper payments can be made for the period beginning 30 March 2020.
If employers do not continue to pay their employees for each pay period, they will cease to qualify for the JobKeeper payment.
To be eligible for the JobKeeper payment, employers and their employees must meet a range of criteria.
Full details for the Jobkeeper Scheme can be found at: https://www.ato.gov.au/General/JobKeeper-Payment/
SME LENDING GUARANTEE
The federal government will provide a guarantee of 50% to SME lenders for new unsecured 3-year loans of up to $250k per borrower to be used for working capital. These loans will also have an initial 6-month repayment holiday.
Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
RELEIF MEASURES OFFERED BY LENDING INSTITUTIONS
In relation to the following measures, unfortunately, if we are your broker, we will not be able to implement these measures on your behalf. You will need to contact the lender directly. We sincerely apologise for this, however, should you require any assistance please do not hesitate to contact us to assist in pointing you in the right direction.
Defer repayments on home loans, business loans and vehicle or equipment finance loans
Basically, anyone with a loan can apply for 3 to 6 months deferral of repayments – that is business loans, home loans, asset finance (car loans, equipment loans, etc…)
- ANZ has said that all impacted customers can request a six-month payment deferral on loan repayments for term loans, with interest capitalised – apply online
- NAB is allowing customers to defer principal and interest for up to six months on a range of business loans including floating and variable rates, and equipment finance loans – apply online or call 13 10 12
- Westpac small business customers who need help to manage their cash flow can defer principal and interest repayments of business term loans for up to six months – Apply here
- CBA is automatically deferring Better Business Loan and Asset Finance repayments with total lending limits with CommBank up to $3 million in April, May and June 2020. From July, customers will be able to opt-in to receive a further three-month deferral if needed in line with the ABA loan deferral arrangements.
- Macquarie Bank has said that all Macquarie business and personal banking clients who are experiencing financial difficulty can immediately defer their loan repayments for six months. This applies to all business loan, overdraft, home loan, car loan and credit card clients – Apply Online
Request Merchant Fee/Terminal Relief
- CBA are waiving merchant terminal fees for impacted customers with CommBank merchant terminals, for 90 days. Call CBA on 13 26 07
- NAB are waiving merchant terminal (including HICAPS) for up to 6 months – apply online or call 13 10 12
- ANZ has not outlined any details on its dedicated COVID-19 support website
- Westpac is offering merchant terminal rental fee waivers for up to three months, but not specifically the merchant fees themselves
Temporary Increases in Overdrafts
Many of the larger banks are offering temporary increases in overdrafts to assist with cashflow needs