Coronavirus effects & How we can help

Updated 02 April 2020

Job Keeper Payment for employers and employees

The government has announced a $130 billion dollar allowance to help keep more Australians in jobs.

Under the JobKeeper Payment, businesses impacted by the coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.

Employers will be eligible for the subsidy if:

• their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
• their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
• the business is not subject to the Major Bank Levy.

The employer must have been in an employment relationship with eligible employees as at 1 March 2020 and confirm that each eligible employee is currently engaged in order to receive Job Keeper Payments. Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for Job Keeper Payments.

Eligible employees are employees who:

• are currently employed by the eligible employer (including those stood down or re-hired);
• were employed by the employer at 1 March 2020;
• are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
• are at least 16 years of age;
• are not in receipt of a JobKeeper Payment from another employer. If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.

Payment process

Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.

Where employers participate in the scheme, their employees will receive this payment as follows.

• If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
• If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
• If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
• If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.
• It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Payments will be made to the employer monthly in arrears by the ATO.

To apply, visit the business.gov.au page for more information. Check out the JobKeeper Factsheet – frequently asked questions for more details.

NEXT STEP:

Feel free to contact us for further details and to discuss your business situation. We’re here to help!

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Updated 24 March 2020 

In response to the coronavirus threat, the Australian Government has increased its support for Australian businesses during this period of economic uncertainty. Assistance includes larger cash payments to small businesses and temporary measures to provide relief for financially distressed businesses. 

This page provides you with information about assistant packages and support for businesses. Our team at RA Business Advisors will be monitoring and updating this page when new information is available.  

A. Support from the Federal Government (apply to all SMEs) 

To this point, the Australian Government has announced 2 Economic Stimulus packages to the sum of $189bn. The cash and tax incentive measures are as followed:  

1) 100% Cashback on PAYG Withholding, up to $100,000 in total 

• Eligible small and medium-sized employers will receive a payment equal to 100% of their salary and wages withheld (up from 50%) with a maximum of $50,000 and minimum of $10,000 between 1 January 2020 and 30 June 2020. 
• An additional payment is also being introduced in the July – October 2020 period. Eligible entities will also receive an additional payment equal to the total of all the Boosting Cash Flow for Employers payments they have received. In total, eligible entities will receive at least $20,000 up to a total of $100,000 under both payments. 
• This second payment is calculated as the total cash back credit calculate in the first payment, split evenly over the June-20 to September 20 BAS/IAS lodgment period.  
• To summarize, the cash back is now calculated on 100% of PAYGW of your wages, paid in 2 separate calculation periods: 

*Eligibility for Payment 1 (Boosting Cash Flow for Employers 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. 

For more information, please visit the Treasury page and the ATO website. 

2) 50% subsidy on apprentice wages, up to $21,000 

• Eligible employers can apply for a wage subsidy of 50% of apprentice or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. Employers can be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee. 
• If a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. 

Further information is available at: 

• Treasury website 
• The Department of Education, Skills and Employment website 
• Australian Apprenticeships website 

3, Tax incentives for Small Business Owners 

• The immediate tax deduction threshold has been increased from $30,000 to $150,000 for assets purchased between 12 March 2020 and 30 June 2020.
• Assets over $150,000 will attract an additional 50 percent depreciation rate of the asset cost in the year of purchase for assets purchased between 12 March 2020 and 30 June 2021 

Note: 

• It’s important to note that these are tax incentives, not cash back incentives. You need to spend the money and pay income tax to get the tax benefit. 
• The tax benefits will be applicable for your FY20 and FY21 tax returns, so you won’t see any benefit until you’ve lodged your 2020 and 2021 returns. 

4, Tax Payment Deferrals 

The ATO is providing SMEs payment deferral concessions for businesses directly impacted by COVID-19. 

• Deferring by up to 4 months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise. 
• Businesses that report quarterly can move to monthly reporting to get faster access to GST refunds they are entitled to.  
• Allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters. 
• Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities. 
• The ATO will discuss with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans. 

Note: 

• These relief provisions are not automatically applied. You will need to contact the ATO to make any of the above requests for assistance.  
• Businesses can call the ATO’s Emergency Support Infoline on 1800 806 218 to discuss relief options based on needs and circumstances. 

5, Coronavirus SME Guarantee Scheme – provide access to working capital 

• Under the Scheme, the Government will provide a guarantee of 50% of new loans issued by eligible lenders to SMEs.  
• The Government’s support will enhance lenders’ willingness and ability to provide credit to SMEs with the Scheme able to support $40 billion of lending to SMEs. This will allow small businesses to get access to credit faster. 

To apply: 

• Contact your bank/lending institution about this package. 
• Refer to the ‘Coronavirus SME Guarantee Scheme’ and ask what new loan products are available to assist. 

B. BUSINESS CONTINUITY PLANNING

As a business owner, now is the time to plan for employees being away from your workplace, shortages of supply, reduction in sales, and the possibility of your workplace being closed for a period of time if everybody is being forced to self-quarantine.

One of the resources we have available is a “Business Continuity Plan” which has been developed exclusively to deal with the coronavirus implications.  The document includes important considerations such as:

• Employees working from home, and workplace obligations
• How to pay your bills in the short term if your sales start to dry up
• How to communicate in a reassuring way with your clients and customers
• How to keep things moving with your business

We’re not suggesting in any way that we have all the answers, but it is important for us to work with you and help you to plan for what will happen in the weeks and months ahead.

Contact us to book in a meeting to discuss your business situation and run through the attached continuity plan.

NEXT STEPS

There are times when we need to stay calm and rely on reliable news sources and information from State and Australian Government websites. What you see on social media may be panicky and unreliable information.

Our team at RA Business Advisors are here to help you. Please phone us on 07 3367 0852 or email us at mail@raaccountants.com.au if you need any assistance.