Coronavirus Government Stimulus And Support Measures

Major stimulus and support measures in response to the Coronavirus were released by the national government on 12 March 2020, 22 March 2020, 30 March 2020 and 2 April 2020.

COVID-19 Coronavirus economic response measures

Most cash flow measures are temporary, for 6 months or less. Some taxation measures (e.g. capital allowance deductions, pension deeming rate) extend into financial year 2020-21.

Links:

Jobkeeper program update 22 May 2020
Child Care Sector Relief – 2 April 2020
JobKeeper eligibility and payment information
JobKeeper alternative decline in turnover tests
Support measures – 22 March 2020
Job Seeker Measures
Support measures – 12 March 2020
Cash Flow Boost For Employers
Business depreciation boost
Business loans and insolvency
Coronavirus supplement $550
Payment to pensioners $750
Second stimulus payment of $750
Early access to superannuation
Pension drawdowns halved
Pension deeming rate reduced
Apprentice wage subsidy
Tax free? What’s tax free and what’s not
Payroll tax relief measures (State govts)
Land tax relief measures (State govts)
Tax Return lodgment deferrals
Importers consider GST deferral
Legislation
References Summary

See also: Tax Office COVID-19 frequently asked questions

Child Care Sector Relief Package

On 2 April 2020 the Prime Minister released details of a package of measures designed to support the child care and early childhood education sector in providing free child care for around 1 million families.

The new arrangements are to be reviewed after 1 month, and an extension considered after 3 months.

Key features of the package are:

  • government to pay 50% of child care sector’s fee revenue up to the existing hourly rate cap (in lieu of existing funding)
  • funding to apply from 6 April 2020 based on children in care as at 2 March 2020 (whether or not attending)
  • Until payments are made, centres may waive gap fees for families who keep their children home, and families will be able to use the 20 extra absence days the Government has funded for Coronavirus-related reasons without giving up their place in a centre.
  • funding conditional on child care centre remaining open and not charging for care
  • higher funding may be available to meet circumstances involving emergency workers or vulnerable children
  • families who have terminated enrolment since 17 February 2020 are advised to re-enrol
  • re-enrolment does not require families to send their children to care or pay gap fees. The child’s place will be held until things start to normalise.
  • means testing will cease for those accessing the child care subsidy during the 6 month Coronavirus emergency

See further:

Prime Minister Media Release
abc.net.au explainer article
Child Care Package FAQ

JobKeeper eligibility and payment information

30 March 2020 the “JobKeeper” wage subsidy program was announced. The scheme starts on 30 March 2020 and ends on 27 September 2020.

JobKeeper Key dates (ATO)

[1 May 2020] Additional time to comply for JobKeeper and Cash Flow Boost measures

The Tax Office has issued internal guidance to staff exercising discretion to allow further time for an eligible business participant to satisfy the eligibility criteria for the cash flow boost or the JobKeeper payments, including:
– registering for an ABN
– providing notice of inclusion of business income or making a taxable supply in a relevant period
See Practice Statement Law Administration
PS LA 2020/1 Commissioner’s discretion to allow further time for an entity to register for an ABN or provide notice to the Commissioner of assessable income or supplies

JobKeeper for sole traders and other entities
JobKeeper employer registration page
JobKeeper information for large public and private groups
JobKeeper Payment – information in other languages
JobKeeper regulations (Jobkeeper payment rules)
JobKeeper further regulations
JobKeeper payments update & clarification
Jobkeeper payment – decline in turnover test – Law Companion Ruling LCR 2020/1
JobKeeper enrolment extension to 31 May 2020
JobKeeper compliance -PCG 2020/4 Schemes in relation to the JobKeeper payment

On 23 April 2020 regulations were released which provide alternative qualifying tests for businesses which cannot otherwise satisfy the decline in turnover test to access JobKeeper payments because there is no appropriate comparison period in 2019.

This may be relevant for more recently started businesses or businesses which have met an extraordinary circumstance affecting turnover in 2019.

See:

The regulations set out alternative tests with respect to the following circumstances:

  • Business commencements after the relevant comparison period
  • Business acquisition or disposal that changed the entity’s turnover
  • Business restructure that changed the entity’s turnover, being
    – 50% or more in the 12 months immediately before the applicable turnover test period; or
    – 25% or more in the 6 months immediately before the applicable turnover test period, or
    – 12.5% or more in the 3 months immediately before the applicable turnover test period.
  • Business had substantial increase in turnover
  • Business affected by drought or natural disaster
  • Business has an irregular turnover
  • Sole trader or small partnership with sickness, injury or leave

On 30 March 2020 the Prime Minister and Treasurer announced a “JobKeeper” wage subsidy program budgeted to cost $130 billion and to be in place for a period of 6 months (from 30 March 2020).

The jobkeeper scheme starts on 30 March 2020 and ends on 27 September 2020.

Key points of the program include:

  • the JobKeeper payment is paid to eligible employers to support all employees on the books as at 1 March 2020
  • the payment is a flat amount of $1,500 per fortnight to be paid to all employees of eligible businesses, including full time, part-time and long-term casuals (at least 1 year) and including employees who may have been stood down or retrenched since 1 March 2020. Terminated workers will need to go back on the books in order to get the payment.
  • payments under the scheme will start to flow from the Tax Office from 1 May 2020, and be backdated for entitlements from 30 March 2020
  • eligible employers will register with the Tax Office on the self-assessed condition of having suffered a minimum 30% reduction of turnover relative to a comparable period a year ago of at least 1 month (or a 50% reduction in the case of businesses with turnover over $1 billion) See ATO page: Basic Test
  • Charities will have a concessional 15% reduction test
  • all businesses and not for profits including charities are included in the program
  • self-employed individuals may also be eligible
  • the program will be administered by the ATO through a registration page on their website
  • the scheme will be available to support New Zealanders on temporary 444 visas, other temporary visa holders not included at this stage
  • the payment does not include superannuation; it will be up to employers to determine whether super is paid any additional wage component
  • there can be no “double-dipping” with JobSeeker, recipients can either get one or the other.
  • Employees with more than one employer may only be recorded for a JobKeeper payment through one employer
  • the measures will require legislation for which parliament will be recalled on a date to be determined after consultation with the Opposition

Coronavirus Measures Announced 22 March 2020

Jump to 12 March 2020
Jump to 30 March 2020
Child Care – 2 April 2020
States’ payroll tax measures
Jump to resources summary
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Job Seeker measures

The measures are temporary. Key measures from the package include:

  • Coronavirus Supplement of $550 per fortnight to be temporarily (for 6 months from 27 April 2020) paid to government income support recipients including Jobseekers (previously called Newstart), Youth Allowance, Parenting Payment, Farm Household Allowance and Special Benefit.
  • An amendment to the enabling legislation (passed by parliament on 23 March 2020) extends the Coronavirus Supplement to full-time students on Youth Allowance, Austudy and Abstudy.
  • The Coronavirus Supplement income test is set at $1,075, which means that most of those already receiving reduced payments based on other income, will nevertheless still get the full Supplement.
  • For Jobseekers income support recipients, the assets test and waiting periods are waived.
  • from 13 July 2020 the issue of a second stimulus payment of $750 to be paid to social security and veteran income support recipients and eligible concession card holders, except for those eligible to receive the Coronavirus supplement. The first payment will be made from 31 March 2020 to people who have been receiving one of the eligible payments any time between 12 March 2020 and 13 April 2020.
  • The income test on partner’s income of JobSeeker recipients is to be temporarily relaxed, allowing the JobSeeker and Coronavirus Supplement to continue where partner income is up to $3,068 per fortnight. The income test on individuals remains unchanged. See more details at DSS link here.

Early access to superannuation

Application can be made for early access to up to $10,000 of superannuation in 2019-20 (apply before 1 July 2020) and a further $10,000 in 2020-21 (apply before 24 September 2020).

The withdrawn amounts will be tax free and not affect entitlement to Centrelink or Veterans’ Affairs payments. This is available for those who are eligible for the coronavirus supplement as well as sole traders who have seen their hours of work, or income, fall 20% or more as a result of the coronavirus.

Applications for superannuation release can be made online (via myGov) with a simple declaration to the Tax Office. Applications opened on 20 April 2020.  See further: Access to superannuation.

  • Minimum account based pension drawdown requirements to be halved for the 2019-20 and 2020-21 years.  See fact sheet 6

account based pension draw down percentages 2020 and 2021

Pension deeming rates

Pension deeming rates to be further reduced (in addition to 12 March 2020 announcement) to a minimum rate of 0.25% and maximum 2.25% from 1 May 2020.  See further: pension deeming rates.

‘Cash flow boost’ for employers

[1 May 2020]  Additional time to comply for JobKeeper and Cash Flow Boost measures

The Tax Office has issued internal guidance to staff exercising discretion to allow further time for an eligible business participant to satisfy the eligibility criteria for the cash flow boost or the JobKeeper payments, including:
– registering for an ABN
– providing notice of inclusion of business income or making a taxable supply in a relevant period
See Practice Statement Law Administration
PS LA 2020/1 Commissioner’s discretion to allow further time for an entity to register for an ABN or provide notice to the Commissioner of assessable income or supplies

SMEs and Not For Profit employers  with eligible turnover under $50 million are to get tax free payments automatically delivered by the Tax Office based on BAS information of wage and salary tax withheld to be delivered starting from 28 April 2020.

A measure first announced on 12 March 2020 offered 50% of tax withholdings for a minimum $2,000 up to a maximum of $25,000.

This second announcement (22 March 2020) increases that previous offer to 100% of the tax withheld for a minimum of benefit of $10,000 up to a maximum of $50,000 (from 28 April 2020).

From 28 July 2020 an additional cash payment matching the total of the previous payments will be issued, bringing the total credits to a minimum of $20,000, and a maximum of $100,000, however this is subject to the PAYG withholdings being at least equal to or exceeding the minimum. (For example if PAYG withholdings do not reach $10,000 over the benefit periods, then the benefit is limited to the minimum, being $10,000.)

When and How??  See ATO information page.

  • Loans for SMEs (turnover under $50 million) bank loan guarantee scheme to enable small businesses to get access to unsecured interest free working capital loan funding of up to $250,000 for up to 3 years with no repayments for 6 months
  • Relaxation of insolvency laws, including an increase in the creditor petition threshold from $2,000 to $20,000 and an increase in the allowed response period from 21 days to 6 months

See in detail: COVID-19 – how does the cash flow boost for employers work?

More information:

Bloomberg -|- abc.net.au -|- Govt media release -|- Treasury -|- All resources summary
Economic response to coronavirus—social security measures part 1 (Parliament’s “Flagpost” blog)
Economic response to coronavirus—social security measures part 2 (Parliament’s “Flagpost” Blog)
Dept of Social Services Coronavirus (COVID-19) information and support

First Announced Coronavirus Stimulus Measures 12 March 2020

Announcement 22 March 2020
Announcement 30 March 2020
Child Care – 2 April 2020
Resources summary
States’ payroll tax relief
Back to page top

On 12 March 2020 the Prime Minister and Treasurer announced a series of assistance measures in response to the currently deteriorating economic conditions.<
The measures include:

  • Instant Asset Deduction boost: from 12 March 2020 until 30 June 2020 an increase in the instant asset write off threshold from $30,000 to $150,000 and to include businesses with aggregated annual turnover of up to $500 million (previously $50 million). See further how it works here.
  • Accelerated depreciation: from 12 March 2020 until 30 June 2021 accelerated depreciation for businesses with a turnover up to $500 million to allow an additional 50% of the asset cost as a deduction in the year of purchase. Existing depreciation rules will apply to the balance of the asset’s cost. This measure is an alternative to the instant asset concessions, not in addition, and so would apply to assets costing more than $150,000. How it works.
  •  Cash Boost for employers: From $2,000 up to $25,000 tax free for eligible small and medium-sized businesses with a turnover of less than $50 million that employ staff between 1 January 2020 and 30 June 2020. Businesses will receive payments of 50% of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days. NOTE: this offer later was increased to 100% in the announcements of 22 March 2020. see Cash Boost for Employers
  • A wage subsidy for eligible employers of 50% per cent of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. The subsidy will be transferable to a new employer that employs that apprentice. The apprentice or trainee must have been in-training with a small business as at 1 March 2020. Businesses will be reimbursed up to $7,000 per quarter, up to a maximum of $21,000, per eligible apprentice or trainee. Final claims for payment must be lodged by 31 December 2020. Registrations are being handled through the Australian Apprenticeship Support Network.
  • a one-off tax free $750 payment to pensioners, social security, veteran and other income support recipients and eligible concession card holders. Around half of those that will benefit are pensioners. The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. Payments will be made from 31 March 2020 on a progressive basis, with over 90% expected to be completed by mid-April.

Those to receive the payment will recipients of the following benefits:

Age Pension
Disability Support Pension
Carer Payment
Carer Allowance
Parenting Payment
Wife Pension
Widow B Pension
ABSTUDY (Living Allowance)
Austudy
Bereavement Allowance
Newstart Allowance
Youth Allowance
Partner Allowance
Sickness Allowance
Special Benefit
Widow Allowance
Farm Household Allowance
Family Tax Benefit A
Family Tax Benefit B
Double Orphan Pension
Veterans Service Pension
Veteran’s Income Support Supplement
Veterans’ Compensation payments
War Widow(er) Pension
and the following card-holders:
Pensioner Concession Card
Commonwealth Seniors Card
DVA Gold Card.

  • a 0.5 % reduction in both the upper and lower social security deeming rates
  • $1 billion allocated for other assistance to “severely-affected regions” including the waiver of fees, supply chain and export market assistance to businesses, and to domestic tourism.
  • deferral of tax payments for up to 4 months (similar to bushfire relief) on a case-by-case basis

More information:

abc.net.au
Govt media release
Treasury overview
Guardian Aus
Moore Stephens
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What’s Tax Free?

A number of Coronavirus relief measures are tax free, most are not. Here’s a quick list.

Early access to superannuation – tax free
Business Cash Flow Boost For Employers – tax free
Payment to pensioners $750  – tax free
Second stimulus payment of $750 – tax free
JobKeeper and other wage payments including leave taken – normal (existing) taxing rules apply, including the tax free/tax concession rules for redundancy and early retirement. See COVID-19 Tax on employment payments.
JobKeeper and payroll tax – Western Australia exempt

State-by-state Payroll Tax Relief

See COVID-19 payroll tax relief details here.

Coronavirus Economic Response Key Legislation

The Coronavirus Economic Response Package Omnibus Bill 2020 (and accompanying bills)[approved 23 March 2020]
Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020 (and accompanying bill)[approved 8 April 2020]
Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Jobkeeper payment rules)
Treasury Laws Amendment (Release of Superannuation on Compassionate Grounds) Regulations 2020 (early access to super rules)
Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020; and Explanatory Statement

Coronavirus Economic Response Resources and References

JobKeeper eligibility & payment info
Economic response to coronavirus—social security measures part 1 (Parliament’s “Flagpost” blog)
Economic response to coronavirus—social security measures part 2 (Parliament’s “Flagpost” Blog)
Dept of Social Services Coronavirus (COVID-19) information and support
Govt media release (12 March 2020)
Moore Stephens (12 March)
abc.net.au (12 March)
abc.net.au (22 March measures)
Bloomberg (22 March measures)
Govt media release (22 March 2020)
Am I eligible for the jobkeeper payment? Guardian (30 March 2020)
COVID-19 – how does the cash flow boost for employers work?
COVID-19 – how the ATO has offered to help (23 March 2020)
Providing support for retirees (Treasury Fact Sheet) (12 March)
Prime Minister Media Release – Child Care (2 April 2020)
New Child Care Package FAQ – Dept of Education
Treasury (economic measures)
States’ payroll tax relief measures
Legislation & rules:
The Coronavirus Economic Response Package Omnibus Bill 2020 (and accompanying bills)
Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020
Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020 (and accompanying bill)
Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Jobkeeper payment rules)
Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No. 2) 2020 (JobKeeper further payment rules)
Coronavirus Economic Response Package (Payments and Benefits) Alternative Decline in Turnover Test Rules 2020; and Explanatory Statement
ATO determination: CERP 2020/1 Alternative Decline in Turnover Test Rules 2020

 

 

This page was last modified 2020-05-23