Coronavirus Stimulus Package
Government announces coronavirus stimulus package
The Morrison Government has announced a $17.6 Billion stimulus package to help businesses, keep Australians employed and support households and the economy.
Key focus areas include:
- One-off $750 cash payments to welfare recipients;
- Expansion of the instant asset write-off for small & medium businesses;
- Cash-flow assistance to employers to help with paying staff and wages subsidy for apprentices & trainees;
- Additional assistance for severely affected regions, including deferral of certain tax obligations
Household stimulus payments
One-off $750 payments to pensioners, social security, veteran and other income support recipients and eligible concession card holders. The payment will be tax-free, and does not count as income towards social security entitlements. The payments will commence from 31 March.
Support of business investment and cash flow assistance
Small and medium businesses will benefit through the increase in the instant asset write-off from $30,000 per eligible item to $150,000. This will apply for businesses with an annual turnover of less than $500 million (up from the existing $50 million), and will apply until 30 June 2020.
In addition, there will be accelerated depreciation deductions from now until 30 June 2021. Businesses with a turnover of less than $500 million will be able to deduct an additional 50% of the asset’s cost in the year of purchase.
Cash flow assistance for employers of between $2,000 and $25,000 with tax-free payments to help with the cost of wages. Employers will receive a payment equal to 50% of the amount of tax withheld, up to a maximum of $25,000. There will be a minimum payment of $2,000 to employers that pay salary & wages but are not required to withhold tax. These payments will be available over 4 months from March, April, May and June, and will be claimed through the monthly instalment activity statement or business activity statement from the 28 April. Refunds are expected to be paid within 14 days.
Support for small businesses with fewer than 20 employees who employee apprentices and trainees. Eligible employers can apply for a wage subsidy of up to $21,000 per apprentice or trainee ($7,000 per quarter) for up to 9 months from 1 January 2020 to 30 September 2020. The subsidy will also be available to a new employer who takes on an apprentice from a previous employer.
Deferral of tax obligations
As part of the Government’s assistance for regions severely impacted by the economic impacts of the virus, like the relief provided for taxpayer’s in bushfire affected regions, similar ATO relief will apply to certain tax obligations for up to 4 months.
Please do not hesitate to contact our office if you have any questions regarding the Government’s stimulus package, and how it may apply to you and your business.