Coronavirus Stimulus Package
The Government has recently announced a support package for business and the general community to deal with the expected impacts of the Coronavirus pandemic.
While details are still a bit light on, the key points are summarised below:
- Wages Support – Cash payments to assist with paying wages or hiring extra staff. Under the scheme, an eligible business that withholds tax for the Australian Tax Office on employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000. The minimum payment will be $2,000. The payment is tax free and commences from 31 March Quarter BAS. Tip: If you operate through a business, which doesn’t have a formal salary setup for the owners… now is the time to consider formalising it. Talk to your accountant now about options.
- Immediate Asset Write-off – The threshold for the instant asset will be raised from $30,000 to $150,000, and expanded to businesses with an annual turnover up to $500M (increased from $50M). This will be eligible from 12 March up to 30 June 2020. Please note, there are restrictions on assets like buildings and cars, so you should consult with your accountant first before making large purchases. Tip: This is mainly a timing benefit, as you always received a deduction for the depreciation, it has just been brought forward to match the purchase commitment.
- Accelerated Depreciation for assets costing over $150,000. Businesses with a turnover of less than $500M will be able to deduct 50 percent of the cost of an eligible asset on installation, followed by normal depreciation thereafter.
- Apprentice Subsidy – Wage subsidy for apprentices of 50% for their wages. Details on how this application is made are still being formalised.
- Casual employees – Casual employees won’t have a ‘sickness allowance’ waiting period if eligible (it is means tested) under Centrelink. The current sickness allowance (which is means tested) is advised to us are as follows:
- Single, no kids – $559/fortnight
- Single, w kids – 604.70/fortnight
- Single over 60 under pensions – $604.70/fortnight
- Partnered – $504.70ea/fortnight
- Additional payments of $750 to those on Social Security, Veteran, pensioners and other income support recipients. There are also changes to eligibility for those receiving Centrelink government payments. You are best to consult with Centrelink should you need information on this.
- Financial assistance for healthcare
- The Government has also announced their support for regions and communities that have been disproportionately affected, including the tourism industry (specific details still to come).
Of course much of the detail and logistics is yet to be published. For more details, please refer to the information which was released by Treasury.