|It has been quite an incredible last few days as the world responds to a crisis like no other we have seen before. We have been blessed as a nation to see the start of an exceptional stimulus package response from the Government. |
If you only have 5 minutes to read about it today, I encourage you to look on:
IN A NUTSHELL:
– Businesses will receive tax-free payments of up to $100k if they are deemed a ‘small business’ or ‘not for profit’ entity. This will come as a BAS (Business Activity Statement) PAYG tax credit. If your BAS is already fully subsidised to NIL or a refund, you will get a cash refund via EFT or cheque from the ATO.
– The government will improve access to working capital by encouraging banks to lend to small businesses. They will guarantee up to 50% of new loans made to small business. There will be an initial 6 month repayment holiday on these loans.
– Sole traders, partners in partnerships and some other self-employed who have seen significant falls in income, will be eligible for jobseeker payments. Jobseeker payments have been effectively doubled for many (not all) welfare recipients and sole traders may be eligible for up to $1,100 per fortnight.
– Early release of superannuation is available to individuals in financial distress, who may be eligible to release up to $20k between this financial year and next financial year IF they can demonstrate hardship. These superannuation payments won’t affect Centrelink benefits either.
– Retirees are allowed to temporarily reduce their superannuation minimum drawdown amounts by 50% in this year and next tax year. This allows them to leave additional funds in a tax free environment; and
– Income support recipients will receive additional one-off and ongoing supplementary payments.
The above measures are the most important measures made available to our communities, however the Government has released many additional pleasing responses to the COVID-19 crisis.
Presently, we note that none of the above benefits have been legislated in full, however there is strong consensus that each measure will pass without delay. We do expect the above responses to become 100% official shortly.
WHAT DO YOU NEED TO DO?
Access to the above measures will be largely “automatic” for many affected tax payers, as the Government intends to utilise technology such as myGov and current taxation data to assess recipients, and then pass on the stimulus package in full. Most people do not need to do a thing to become eligible for the stimulus.
The Government is looking to roll out BAS subsidies automatically, and loan guarantees will apply automatically in the coming few weeks as banks roll out additional funding.
If you are a sole trader/self-employed and looking to access the Jobseeker payments, you are encouraged to setup or log into myGov and follow the relevant steps to link both the ATO and Centrelink services to your account. The remainder of the application process can be lodged electronically in due course. (Be patient as the system will be under heavy load.)
Considering drawing down on super early? Hold tight and wait until your super fund tells you it is time to contact them regarding this. Whilst we haven’t got complete clarity over when this will occur, we expect it to be very soon!
– In addition to these tips above, we would personally like to encourage a couple of very important behaviours right now:Check-in with your loved ones and friends, particularly those who may be feeling the pinch or who live in isolated areas. At this point in the crisis, communication is key and anything you can do to make someone feel valued is incredibly important; and
– Continue your support of small business in whatever way you can. If you have some level of discretionary income over this period, please frequent your takeaway store/coffee shop or order delivery. Support the businesses around you because they truly do keep cash flowing within our economy.