Coronavirus Stimulus Package 2.0
Government announces additional $66 billion stimulus package
The Morrison Government on Sunday announced a further $66 billion stimulus support package only 10 days after announcing the first $17.6 billion package.
The second stimulus measures include:
- Measures to help workers, retirees and income support recipients;
- Expanded cash flow injection to small business;
- Government to guarantee loans to small business and flexibility in insolvency & bankruptcy law;
- Further stimulus measures are likely.
Support for workers, retirees and households
- Doubling of income support to $1,100 per fortnight for those on JobSeeker payment (formerly known as Newstart) for existing and new recipients. The existing $550 per fortnight payment will be supplemented with an additional time-limited ‘coronavirus supplement’ of $550 per fortnight. This will also apply to sole traders who no longer have work. The income test still applies, however the assets test and the waiting period have been abolished
- A further $750 payment on top of the first $750 payment, to social security and veteran income support recipients and eligible concession card holders not eligible for the above payment, e.g. if you are on the aged pension or receiving a carer’s allowance
- Ability to drawdown from super for those facing hardship. Those eligible will be able to drawdown tax-free a maximum of $10,000 this financial year, and a $10,000 in 2020/21 financial year. You will be eligible for these drawdowns if you are eligible for the ‘coronavirus supplement’, as well as sole traders who have had a reduction of 20% or more in hours work or income due to the crisis. You should discuss with your financial advisor if this is the right option for you
- Temporary reduction in retirees minimum superannuation drawdown requirements by 50% for 2019/20 and 2020/21 financial years
- Further 0.25% reduction in the deeming rates to reflect the latest Reserve Bank interest rate reduction. The lower deeming rate is now 0.25% and the upper deeming rate 2.25%.
Cash payments for small to medium businesses
- Increased payments for business with a turnover of up to $50 million a year
- Minimum payment will be $20,000 up to a maximum of $100,000. The amount will be 100% of tax withheld to the ATO on employees’ wages
- Not-for-profit organisations will also be eligible
Loan guarantees and increased flexibility in insolvency & bankruptcy law
- Government will guarantee 50% of unsecured loans taken out by small-to-medium businesses commencing from 1 April 2020 with banks who join the scheme
- Loans can be up to $250,000 over a three-year term
- No repayments required for the first 6 months
- Banks to give business affected by the coronavirus crisis a 6-month holiday from loan repayments. Please contact your bank now to discuss your circumstances
- Increasing the current $2,000 threshold to $20,000 at which a creditor can pursue insolvency proceedings. Also allowing people 6 months to respond, instead of the current 21 days
- Businesses will still be able to trade while insolvent
Please do not hesitate to contact us if you have any questions regarding the Government’s second stimulus announcement. Our office will be closing from Monday 23 March with the team working from home. However rest assured, we are here to help you during this difficult time and your work will still be attended to. You can contact us by phone or email and our team will respond to you.