To assist the community coping with the economic impact of the current COVID-19, the federal government has announced series of measures that bring a wide arrange of benefits to eligible businesses and individuals. The measures discussed below have passed as law on 24 March 2020.
A. For small and medium sized businesses
Increasing instant write-off threshold
The government intends to increase the small business instant asset write-off threshold from the current $30,000 to $150,000 for assets (new and second-hand) first used or installed ready for use between 12 March 2020 and 30 June 2020 for businesses with aggregated annual turnover of $500 million or less.
Accelerating depreciation
Businesses with aggregated annual turnover of $500 million can claim 50% of the cost of an eligible asset as depreciation deduction, with the balance depreciated under the existing depreciation rules.
An eligible asset is a new asset purchased between 12 March 2020 and 30 June 2021 that can be depreciated under Division 40 of the ITAA 1997 (i.e. plant and equipment, etc., but not building or capital works depreciated under Division 43).
Cash flow boosting payments to employers
Businesses with aggregated annual turnover of less than $50 million that have been actively employing workers since prior to 12 March 2020 are eligible for payments of minimum $20,000 up to a total of $100,000.
For quarterly lodgers:
Upon lodgement of the March and June 2020 quarterly BASs, eligible businesses will receive a payment equal to the amount of PAYG withholding from salary and wages for the period up to $50,000, or the $10,000 minimum payment. Even if there is no PAYG withholding for the period, the employer will still get the minimum payment of $10,000. The minimum payment will be paid upon lodgement of the March 2020 quarterly BAS.
During the period of July to October 2020, eligible businesses that are still actively hiring workers will receive an addition payment equal to the cash flow boosting payments already received in the previous period. The payment will be paid in two instalments upon lodgement of the June and September 2020 quarterly BASs.
For monthly lodgers:
Eligible businesses will receive 300% of the PAYG withholding of the month of March 2020 (to bring them in line with the quarterly lodgers) and 100% of the PAYG withholding for the months of April, May and June 2020, up to $50,000 in total. If there is no PAYG withholding or the payment is calculated to be less than the minimum payment, $10,000 will be paid.
The additional payments will be paid in four instalments for the months of June to September 2020.
All payments are automatically calculated and completely tax free for the employers.
B. For individuals
Temporary early release of superannuation
Eligible individuals are allowed to access funds in their superannuation accounts of up to $10,000 in the 2020 financial year, and an additional $10,000 in the 2021 financial year. The payments received are tax free and do not affect their Centrelink benefits.
Individuals must satisfy at least one of the following conditions to qualify:
You are unemployed
You are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance
On or after 1 January 2020, either:
- You were made redundant
- Your working hours were reduced by 20% or more
- Your business (in the form of a sole trader) was suspended or there was a reduction in revenue of 20% or more
Eligible individuals can start applying through the MyGov website from mid April 2020. Once approved, the Taxation Office will issue a determination to the super fund instructing the fund to release payments.
Temporarily reducing superannuation minimum drawdown
For super fund members in pension phase, the annual minimum withdrawal rate will be reduced by 50% for both 2020 and 2021 financial years.
STATE GOVERNMENT TAX MEASURES (VICTORIA)
The Victorian statement government has also announced several tax measures to support businesses during this difficult period, including:
Businesses with annual taxable wages up to $3 million will have their payroll tax waived for the 2020 financial year, and their payroll tax payment for the first quarter of the 2021 financial year deferred
Liquor licence renewal fee will be waived (or reimbursed if already paid) for 2020
Land owners who have at least one non-residential property and total taxable landholding value below $1 million now have the option to defer their 2020 land tax payment to after 31 December 2020
The State Revenue Office will contact the eligible businesses or individuals directly for the above concessions.
CENTRELINK SUPPORT
Centrelink will also provide financial support to COVID-19 affected job seekers including:
Temporary $550 fortnight Coronavirus Supplement Payment for people receiving eligible payments
Two $750 Economic Support Payments for people receiving eligible payments
Expanded eligibility for some Centrelink payments
Crisis Payment for income support recipients who need to self-isolate or in severe financial hardship
For more information on eligibility, please visit Department of Social Services website at:
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