Covid-19 Government Stimulus Response – Update 22 March 2020

Covid-19 Government Stimulus Response – Update 22 March 2020

Here to help during good times and tough times…

There is no doubt the impact of the COVID-19 virus has been significant with far reaching impacts being felt by everyone. Whilst uncertainty remains high, the team at Rawson Verco Need want to take this opportunity to communicate with you some of the recently announced measures that have been made available to assist during this time.

 Below you will find information sorted under the following headings:

  • Supporting Individuals and Households
  • Support for Businesses
  • Supporting the Flow of Credit and Banking Assistance

     

Supporting Individuals and Households

Income support for individuals

Over the next six months, the Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This will be paid to both existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals.pdf

 Payments to support households

The Government is providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders. The first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020. Around half of those that benefit are pensioners. This payment will help to support confidence and domestic demand in the economy. The second payment will not be made to those eligible for the Coronavirus supplement.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households.pdf

Temporary early release of superannuation

The Government is proposing to allow individuals affected by the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf

Reducing social security deeming rates

On 12 March, the Government announced a 0.5 percentage point reduction in both the upper and lower social security deeming rates. The Government will now reduce these rates by another 0.25 percentage points.

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. The reductions reflect the low interest rate environment and its impact on the income from savings. The change will benefit around 900,000 income support recipients, including around 565,000 Age Pensioners who will, on average receive around $105 more of the Age Pension in the first full year the reduced rates apply.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_support_for_retirees_to_manage_market_volatility.pdf

Support for Businesses

Boosting cash flow for employers – PAYGW

The Government is enhancing the Boosting Cash Flow for Employers measure it announced on 12 March 2020. The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000. These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.

This measure will benefit around 690,000 businesses employing around 7.8 million people, and around 30,000 NFPs (including charities).

Small and medium-sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible. NFPs, including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment at a time where NFPs are facing increasing demand for services.

Under the enhanced scheme, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.

An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf

Temporary relief for financially distressed businesses – Insolvency

The economic impacts of the Coronavirus and health measures to prevent its spread could see many otherwise profitable and viable businesses temporarily face financial distress. It is important that these businesses have a safety net to make sure that when the crisis has passed they can resume normal business operations. One element of that safety net is to lessen the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business.

The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief for directors from any personal liability for trading while insolvent, and providing temporary flexibility in the Corporations Act 2001 to provide temporary and targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health crisis.

The ATO will tailor solutions for owners or directors of business that are currently struggling due to the Coronavirus, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Providing_temporary_relief_for_financially_distressed_businesses.pdf

Increasing the instant asset write-off

The Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. In 2017-18 there were more than 360,000 businesses that benefited from the current instant asset write-off, claiming deductions to the value of over $4 billion. This measure will support over 3.5 million businesses (over 99 per cent of businesses) employing more than 9.7 million employees.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_Sheet-Delivering_support_for_business_investment.pdf

 Supporting apprentices and trainees

The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.

This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Cash_flow_assistance_for_businesses_0.pdf

ATO Debt Management

The ATO has also released guidance on how it will be assisting small to medium size businesses, mainly with the deferral of payments and low interest payment plans. We have detailed these below:

  • Deferring by up to six months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise.
  • Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
  • Allowing businesses to vary Pay As You Go (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.
  • Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

Supporting the Flow of Credit and Banking Assistance

Support for immediate cash flow needs for SMEs

Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50 per cent to SME lenders to support new short-term unsecured loans to SMEs. The Scheme will guarantee up to $40 billion of new lending. This will provide businesses with funding to meet cash flow needs, by further enhancing lenders’ willingness and ability to provide credit. This will assist otherwise viable businesses across the economy who are facing significant challenges due to disrupted cash flow to meet existing obligations.

Quick and efficient access to credit for small business

The Government is cutting red tape by providing a temporary exemption from responsible lending obligations for lenders providing credit to existing small business customers. This reform will help small businesses get access to credit quickly and efficiently.

To view a detailed fact sheet on the above: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Supporting_the_flow_of_credit_1.pdf

Banking Assistance
Australian Banking Association announced relief packages targeting both business and individual customers.

Assistance could include:

  • deferring loan payments,
  • waiving fees and charges,
  • helping with debt consolidation,
  • waiving penalties for early withdrawal of a term deposit or
  • deferring upcoming credit card payments and increasing emergency limits

We recommend you contact your bank as soon as possible to discuss your debt arrangements to see if a reduction or deferral can be arranged.

A downloadable list is available here.

Bank

 

Phone Number

 

Website

 

LATEST NEWS

 

AMP

 

1300 130 191

 

Experiencing financial hardship

 

Media Release

 

ANZ

 

1800 252 845
COVID-19 1800 351 548

 

Customer Connect

 

Media Release

 

Arab Bank

 

1800 64 64 84

 

Hardship Assistance

     

Bank Australia

 

132 888

 

Contact Us

 

Media Release

 

Bank of Sydney

 

13 95 00

 

Financial Hardship

 

Media Release

 

BOQ

 

1800 079 866

 

Financial Hardship Assistance

 

Media Release

 

BankSA

 

1800 679 461

 

BankSA Assist

 

Media Release

 

Bankwest

 

1300 769 173

 

Experiencing financial hardship

 

Media Release

 

Bendigo and Adelaide Bank

 

1300 652 146

 

Financial difficulty assistance

 

Media Release

 

Citibank

 

1800 722 879

 

Hardship assistance

 

Media Release

 

Commonwealth Bank

 

1300 720 814
Small Business: 132 607

 

Emergency assistance

 

Media Release

 

HSBC

 

1300 555 988

 

Financial difficulty

 

Media Release

 

ING

 

1300 349 166

 

Financial Hardship

     

Macquarie Bank

 

1300 363 330

 

Financial Hardship

 

Media Release

 

ME Bank

 

1300 500 520

 

ME Bank financial hardship

 

Media Release

 

MyState

 

13 800 1

 

MyState financial hardship

     

NAB

 

1800 701 599

 

Financial Hardship

 

Media Release

 

Rabobank

 

1800 025 484

 

Financial Hardship

     

Rural Bank

 

1800 660 115

 

Financial Hardship

     

St. George Bank

 

1800 629 795

 

St. George Assist

 

Media Release

 

Suncorp Bank

 

1800 225 223

 

Suncorp Customer Assist

 

Media Release

 

Westpac

 

Personal: 132 032
Small Business: 132 142

 

Westpac Assist

 

Media  Release

 

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