|COVID-19 GOVERNMENT BUSINESS STIMULUS PACKAGE|
What a terrible time a lot of people are facing in the coming days, weeks and months. We are all going to hurt to varying degrees but if we look out for each other, then hopefully most of us can get through this and come out the other side stronger and more resilient.
We have been inundated with questions from our clients regarding the assistance that is available to them in light of the Government’s announcements over the last few days in relation to financial assistance for business.
We have attempted to put together a summary, in non-Government, non-accounting type terms, that will hopefully arm you with the information you need to make better judgement calls in relation to retention of your employees, and the assistance that is available to you.
|BOOSTING CASHFLOW FOR EMPLOYERS|
What does the stimulus package mean for you, your employees, and most importantly, the viability & sustainability of your business?
The Australian Government has been working tirelessly to put together some relief for SMEs (small and medium enterprises) across the country.
The most important rebate at this crucial time relates to the viability of retaining your employees, and how the Government are assisting you to do that. Effective from the lodgement of your March 2020 Business Activity Statement, is a credit of all PAYG withholding on wages declared for the period 1 January 2020 to 31 March 2020.
If you declare and lodge your wages and PAYG on a monthly basis (Instalment Activity Statement), you will receive a 300% rebate of the PAYG declared in your March 2020 Business Activity Statement, which will also cover both January 2020 and February 2020 IAS lodgements.
The rebate on PAYG withholding has also been extended to the first quarter of the 2021 Financial Year and is accessible to those businesses who continue to trade and engage employees.
If you are an employer, the minimum rebate you will receive on lodgement of the March 2020 Business Activity Statement is $10,000, even if you don’t declare any PAYG. The March 2020 Business Activity Statement is due for lodgement by 28 April 2020, and the ATO expect to apply the rebate within 14 days of that date. The rebate is capped to a total of $50,000 for each of the periods from January 2020 to June 2020, and July 2020 to September 2020.
APPRENTICES & TRAINEES
The Government has also introduced a wage subsidy of up to 50% of apprentice’s or trainee’s wages paid during the 9 month period from 1 January 2020 to 30 September 2020. Eligible employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
To qualify the employer must be employing less than 20 full time employees and retain an apprentice or trainee as at 1 March 2020.
Employers who re-engage an eligible out-of-trade apprentice or trainee will also be eligible for the subsidy.
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 at: www.dese.gov.au; the Australian Apprenticeships website at www.australianapprenticeships.gov.au. For further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.
TEMPORARY RELIEF ON ATO OBLIGATIONS FOR FINANCIALLY DISTRESSED BUSINESSES
For owners or directors of a business that are currently struggling due to the Coronavirus, the ATO will tailor solutions for their circumstances, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups. If you are struggling with your obligations, please contact us to discuss setting in place a repayment plan, or referral advice to other specialists.
ARE YOU A SOLE TRADER?
Whilst you cannot declare a “wage” for yourself as a sole trader, you have not been forgotten.To be eligible for all, or part of the $550 Coronavirus Supplement under the Jobseeker Payment income support category, you must not be receiving any other financial support (ie annual or sick leave from an employer, or insurance payments under income protection).Centrelink CANThe Government has waived the usual waiting period, have implemented an Accelerated Claim Process, and encourage new applicants to claim through on-line and mobile channels. You will need a Centrelink CRN to apply, and this can also be done on-line: https://www.servicesaustralia.gov.au/individuals/subjects/centrelink-customer- reference-number-crn. The Coronavirus supplement will commence from 27 April 2020. The below table sets out an example of the Coronavirus Supplement:
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