'Details of $66 Billion Stimulus Measures' Nexia Australia
Boost to Federal Government Economic Stimulus Package
Yesterday the Federal Government announced an additional $66 billion in economic stimulus measures to support Australian's through COVID-19. The focus of these measures is to provide temporary relief to business cash flow and encourage businesses to retain employees, as well as to provide greater assistance to individuals already receiving government benefits.
Enhanced Boosting Cash Flow for Employers:
- Further to already announced measures, employers will now receive a payment equal to 100 per cent of salary and wages withheld up to the value of $50,000. The minimum payment will also be increased to $10,000. This payment is available to SMEs and NFPs, including charities, with an aggregated turnover of less than $50 million and who employ workers.
- An additional payment will also be made in the July-October 2020 period for all eligible entities for the total of the Boosting Cash Flow for Employers payment. Meaning eligible SMEs and NFPs will receive at least $20,000 and up to $100,000 under both payments.
Temporary Relief for Financially Distressed Businesses:
- To reduce the threat of actions which could push a business into insolvency the Federal Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company as well as increasing the time for a company to respond to statutory demands. This package will also provide temporary flexibility in the Corporations Act 2001 to provide targeted relief for the impact of COVID-19 including relief for directors from any personal liability for trading whilst insolvent.
- The ATO will provide tailored relief for owners and directors of businesses struggling during this period including temporary reduction of payment or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.
Support for Immediate Cash Flow Needs for SMEs:
- The Government announced a Coronavirus SME Guarantee Scheme which will provide a guarantee of 50 per cent of short-term unsecured loans to SMEs. The Scheme will guarantee up to $40 billion of new lending to assist businesses with cash flow needs.
- The Government is also temporarily removing red tape to increase the speed and access of credit for small businesses.
Additional Income Support for Individuals:
- The Government will also temporarily expand eligibility to income support payments and establish a new $550 supplement for existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Household Allowance and Special Benefit.
- Individuals adversely affected by COVID-19 will also be able to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Money withdrawn will not be taxed and will not affect any Centrelink of Veteran's Affairs payments.
- Superannuation minimum drawdown requirements for account-based pensions will also be reduced by 50 per cent for 2019-20 and 2020-21.
Reducing Social Security Deeming Rates:
- In order to provide more cash for Age Pensioners, the social security deeming rates have also been reduced by a further 0.25 percentage points. This means that 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.
If your business has been adversely affected by the coronavirus or have any questions about how to access the above stimulus measures, please contact your Nexia Advisor to discover how we can help you.
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