Over the weekend the Federal Government announced a second stimulus package in response to increased economic effects since initial response announced on 12 March 2020.
The Government’s economic response targets three areas:
Useful fact-sheets can be found on Treasury’s website linked in the above target areas.
Below is a summary of relevant new announcements. Below is a summary of relevant new announcements. A scaled-back Federal Parliament passed legislation to implement the Federal packages on 23 March 2020.
Individuals and Households
- Individuals affected financially by the virus can withdraw tax-free up to $10,000 of superannuation before 1 July 2020 and another $10,000 withdrawal from 1 July 2020 to 30 September 2020.
- How to apply: Online through MyGov.
- Reduction of the minimum drawdown for account-based pensions by 50% for the 2019-20 and 2020-21 financial years.
- How to apply: Automatic.
- ‘Coronavirus supplement’ to welfare recipients of additional $550 per fortnight for the next six months and increased eligibility for benefits.
- How to apply: Automatic if already receiving benefits, otherwise, online through MyGov or with Services Australia.
- Additional $750 to social security and veteran income support recipients and eligible concession card holders.
- How to apply: Automatic, payment will be automatic from 13 July 2020.
- Reduction of the social security deeming rates by a further 0.25 percentage points
- How to apply: Automatic.
Support for business
- An increase of the rebate of PAYG withholding to $50,000 to employing businesses and not-for-profits with aggregated annual turnover of less than $50 million to be paid from 28 April 2020, with the minimum payment increased from $2,000 to $10,000. Payment is by way of a credit in the activity statement account from 28 April. Monthly lodgers will be calculated at three times the rate (300 per cent) in the March 2020 activity statement.
- How to apply: Automatic, to be applied upon lodgement of activity statements starting with the March 2020 period.
- An additional payment equal to the total received above will be made from 28 July 2020, ie up to an additional $50,000.
- How to apply: Automatic, based on eligibility of initial payment.
- Temporary amendments to the Corporations Act 2001 to increase the threshold at which creditors can issue a statutory demand and the time companies have to respond as well as relief for directors from any personal liability for trading while insolvent.
Supporting the flow of credit
- The Government will guarantee 50% of new bank loans issued by eligible lenders by 30 September 2020 to small and medium businesses. Unsecured loans of up to $250,000 with a three-year term and no repayments for the first six months.
- How to apply: No specific detail yet, expected to commence by early April 2020.
Contact your HLB Mann Judd adviser to learn more about how your business could benefit from these new measures. Click here to read the first Federal Government stimulus announcement.