The Government has announced a second economic stimulus package package detailing further support available to assist businesses throughout the Coronavirus outbreak.
The following measures are in addition to those outlined in the first economic stimulus and we have summarised them for you as follows:
- Support for Individuals
- Support for Retirees
- Support for Businesses
Please note that these measures still need to pass legislation. We know receiving all this information can be overwhelming so if you have any questions please call our office.
Support for Individuals
Early access to superannuation:
Eligible Individuals affected by Coronavirus will be allowed to access up to $10,000 of their superannuation in the 2020 financial year and a further $10,000 in the 2021 financial year.
To be eligible you must satisfy at least one of the following requirements:
- You are unemployed
- You are eligible to receive a Jobseeker Payment, Youth Allowance, Parenting Payment, Special Benefit or Farm Househould Allowance
- On or after 1 January 2020 you were either made redundant or your working hours were reduced by 20 hours or more
- If you are a sole trader your business has been suspended or turnover reduced by 20% or more
If you meet one of the above requirements you can access your first $10,000 of superannuation by applying through myGov from mid-April till 1 July 2020. If you would then like to access a further $10,000 you must apply again within three months. The ATO will then process your application and issue you and your superannuation fund with a determination and your fund will make the payment to you.
Please note a downside to using this measure is that your superannuation balance may have been negatively impacted from the current economic environment.
Increased & accelerated income support:
For the next six months the eligibility to receive income support is expanding and a new Coronavirus supplement of $550 per fortnight will be paid to both new and existing recipients of eligible payment categories.
Payment categories included are:
- Jobseeker Payments
- Youth Allowance Job Seeker
- Parenting Payment (Partnered and Single)
- Farm Household Allowance
- Special Benefit recipients
Expanded access to payment categories:
- Jobseeker Payments and Youth Allowance Jobseeker Payments will now be accessible to permanent employees who have lost their jobs as well as to sole traders, the self-employed, casual workers and contract workers who meet income tests due to the economic downturn of the Coronavirus.
- The asset test will be waved for the Coronavirus supplement, however income testing will still be required to be eligible to receive other payments.
- The one week Ordinary Waiting Period has already been waved and the Newly Arrived Residents Waiting Period will also be waved for recipients eligible for the Coronavirus supplement
The application process has also been streamlined to remove requirements for documentation to be provided including Employment Separation Certificates etc.
Please note you will not be permitted to access these payments if you are also receiving employer entitlements such as sick leave and annual leave or income protection insurance.
Additional support payments:
The government has announced that a second round of $750 payments will be paid to eligible income support recipients in addition to the $750 announced in the first economic stimulus. This next round of tax-free payments will be available to people who are eligible payment recipients and concession card holders on 10 July 2020. You may be eligible to receive both rounds of payments, however you will not receive more than $750 each time.
To be eligible for the second payment you must be receiving one of the payments or holding one of the concession cards that was eligible for the first payment, except for those receiving an income support payment that is eligible to receive the Coronavirus supplement.
Support for Retirees
Temporary reduction in superannuation minimum drawdown requirements:
To help retirees manage the impact of the current economic downturn on their retirement savings, the Government is temporarily reducing the superannuation minimum drawdown requirements for account-based pensions by 50%. This measure will be in place for both the 2020 and 2021 financial years and will reduce the need for retirees to sell investment assets to fund minimum drawdown requirements.
Changes to social security deeming rates:
Social security deeming rates will again be reduced in recognition of the impact of the low interest rates on savings. As of 1 May 2020 the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent. This change will benefit income support recipients including people on the Age Pension who will on average receive approximately $105 more in the first full year with reduced rates.
Support for Businesses
Cashflow assistance (PAYGW refunds):
The Government has expanded on the PAYGW refunds announced in the first stimulus for businesses who pay employees. The minimum payment has increased from $2,000 to $10,000 with the refunds now capped at $50,000 instead of $25,000.
Support for Coronavirus-affected regions, communities & industries:
The Government has set aside $1 billion dollars to support businesses disproportionately affected by the economic impact of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education. This will be spent through existing or newly established Government programs and the Deputy Prime Minister will work with affected industries and communities to develop recovery plans and measures.
Temporarily higher thresholds and more time to respond to demands from creditors:
For the next six months the Government is increasing the current minimum threshold for creditors not paid by a company and therefore able to issue a statutory demand under the Corporations Act 2001, from $2,000 to $20,000. The time for companies to respond to a statutory demand has been temporarily extended from 21 days to six months.
Temporary relief from director’s personal liability for trading while insolvent:
To ensure companies have confidence to continue to trade through this crisis, directors will not be personally liable for further debt incurred without entering an insolvency procedure in the ordinary operations of their business. This measure will be in place for six months and any debts will still be payable by the company.
Australian Securities and Investment Commission (ASIC) support:
For companies struggling to comply with the Corporations Act due to unprecedented issues arising from the Coronavirus, ASIC will now have the power to offer relief or to take no action for non-compliance of some provisions. This will apply for six months and may require companies to make individual requests to ASIC.
Click on the below link to the Government’s website for the full details on these measures: