COVID-19 Government Stimulus Package Summary

The Australian Government has announced a range of measure designed to protect our economy from slipping into a COVID-19 induced recession.

The legislation for the introduction of these measures will put before parliament in the coming weeks and is expected to be passed promptly.

The key areas addressed are summarised below:

Business

Effective 12 March (if legislation passes) the thresholds for the instant asset write-off have increased and will now apply for:

  • businesses with an aggregated turnover of less than $500 million
  • assets less than $150,000

Effective 12 March (if legislation passes) an investment incentive for the period up to 30 June 2021 to accelerate certain depreciation deductions for:

  • Eligible new assets
  • Businesses with a turnover of less than $500 million
  • An immediate deduction for 50% of the cost of an eligible asset
  • Deduction available on installation of the asset
  • Normal depreciation rules apply to the balance of the asset’s cost

Cashflow incentives of between $2,000 to $25,000 for businesses employing staff.  This will be provided for businesses:

  • with an aggregate turnover of less than $50 million
  • that employed staff between 1 January 2020 to 30 June 2020
  • as a tax-free amount
  • will be delivered as a credit via the ATO integrated client account:
    • based on 50% of the PAYG withheld amount up to a maximum of $25,000
    • upon lodgement of the relevant activity statements by the business
      • quarterly statements for March and June 2020
      • monthly statements from March to June 2020 – with the March monthly statements to be calculated at 150% of withholding to offer a catch up for the missed January and February months
    • if no PAYG withholding obligations a minimum amount of $2,000 will be available
    • if the business has existing tax debts it will provide a reduction of those debts first
    • otherwise any balance is expected to be refunded promptly

Apprentice and Trainee support for:

  • Businesses with less than 20 full time employees
  • Subsidies that will cover 50% of apprentice / trainee wages for up to nine months from 1 January 2020 to 30 September 2020
  • The apprentice / trainee must have been employed by the business at 1 March 2020
  • If the business is unable to retain the apprentice / trainee the subsidy will be available to the new employer
  • Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will also be eligible for the subsidy.
  • A maximum subsidy of $21,000 per apprentice / trainee
  • A registration process is expected to be available from early April 2020

Households

Payments of $750 to selected income support recipients:

  • One off payment per person
  • Applies for pensioners, veterans, eligible concession card holders and other income support recipients accessing benefits (or have an active claim for benefits which is subsequently successful) as at 12 March 2020
  • Click here for a full list of eligible recipients
  • Tax free payment
  • Won’t count as income for social security, veterans or Farm Household Allowance
  • Payments to be made progressively from end of March and throughout April

ATO Lodgements and Debts

The ATO will consider relief on a case by case base for lodgement and payment obligations for those affected by the COVID-19

Severely Affected

Regions and industries severely and disproportionately affected can expect addition support in a more targeted format.

Further Information

We expect more detail to come to light once the legislation is drafted.  For further information and updates click here

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