Information up-to-date as of 26/03/2020
The last few weeks have certainly been both tough and confusing. So much information is being released on a daily basis it is hard to distinguish between what’s relevant and what’s not.
Our team of experts has pulled together the information below from various trusted sources in an attempt to summarise the Stimulus Package measures for Australian doctors; highlighting what they think is – or will be – relevant and cut through the noise.
The Federal Government Stimulus Package and Other Measures:
1. Supporting Individuals and Households
- Income support for individuals with the introduction of new Coronavirus supplement payments to some classes of welfare recipients.
- Payments to support households with two tax free payments of $750 each to social security, veteran and other income support recipients and concession card holders.
- The Government is temporarily expanding eligibility to income support payments and establishing a new, time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients of the eligible payment categories. These changes will apply for the next six months.
- Temporary early release of superannuation – This provision allows eligible individuals to withdraw $10,000 in the 2020 financial year and another $10,000 between 1 July 2020 and 30 September 2020. Eligibility is dependent on individuals satisfying specific criteria. This should be discussed with your Wealth Consultant prior, as it may have long term implications.
- Temporarily reducing super minimum drawdown rates – This provision applies to account based pensions and other similar products. It will benefit retirees by reducing the need to sell investment assets to fund minimum drawdown requirements. The reduction will apply for this financial year and next financial year.
- Reducing social security deeming rates – This will result in higher benefits being paid to recipients.
2. Support for businesses
JobKeeper Payment Package
To register your interest or to access the summarised information on the package click here.
Boosting cash flow for employers
To help businesses keep operating, paying rent, and bills and retain staff. This is a payment to eligible small and medium sized businesses of between $20,000 and $100,000.
This payment is broken into two parts:
For quarterly lodgers
- The Initial Payment which is 100% of the PAYG-Withholding for wages paid. This will be a minimum payment of $10,000 even if no withholding is withheld from wages and a maximum payment of $50,000 for the March 2020 quarter.
- The additional payments will be half of the initial Boosting Cash Flow of Employers payment following the lodgement of the June and September BAS’s.
For monthly lodgers
- The payments will be delivered as an automatic credit on the lodgement of your activity statements (BAS /IAS). The first payment will be based on the March 2020 lodgement, with a payment in April of 3 times the amount withheld or $50,000 whichever is lower. If you receive less than $50,000 in this first payment further payments will be made following the lodgement of the April, May and June activity statements to a maximum of $50,000 in total.
Additional payments will be made following the lodgement of the June, July, August and September activity statements. The June, July, August and September activity statements will be a quarter of the total amounts received as per the activity statements from March to June and paid in equal instalments.
Increasing the instant asset write-off
The threshold to purchase assets and receive an immediate tax benefit has been increased from $30,000 up to $150,000, until 30 June 2020.
Backing business investment
By accelerating the depreciation on asset purchases which exceed the $150,000 immediate write off provisions.
Temporary relief for financially distressed businesses
This measure increases the threshold before a creditor can issue a statutory demand on companies, lengthens the time to respond to such a claim and some temporary relief for directors from personal liability.
Supporting apprentices and trainees via wage subsidies
Support for Coronavirus-affected regions and communities
For areas significantly affected to assist during the outbreak and with recovery.
3. Supporting the flow of credit – Banking Measures
Lenders are offering the option to defer loan repayments for consumer and business lending and credit card repayments
Lenders are starting to release details of how they are implementing government backed support that may include, small business customers being eligible with a fast tracked application on an unsecured loan of up to $250,000* (lending criteria applies) no establishment or account fees, and no repayments required for 6 months for business with less than $50 million annual turnover. For the first 6 months, interest will be deferred and capitalised at reduced variable rates. From 6 months, principal and interest repayments will be required.
4. ATO Measures
Payment deferrals
- ATO will work with tax payers to defer payments, including income tax, activity statements, PAYG instalments and Fringe Benefits Tax for up to 6 months. This is not an automatic deferral and need to applied for with the ATO.
Monthly GST Credits
- If you report quarterly and are due GST refunds, moving to month reporting means quicker access to the refund amounts. This can only be done at the start of a BAS quarter. If you change to monthly reporting, you must report monthly for 12 months before you can revert to quarterly reporting. This may assist with receiving refunds sooner, however you will now be reporting to the ATO 12 time a year instead of 4.
PAYG Instalments
- Quarterly PAYG instalment payers can vary the March 2020 quarter amount and claim a refund of instalments made in the September 2019 and December 2019 quarters. Variation can also be made to the June 2020 quarter PAYG Instalment amount.
- The ATO will not apply any penalties or charge interest to varied instalments for the 2019-20 financial year.
- It is important to note that this is not an exemption to pay tax, but rather a deferral measure, instead of paying instalments during the year a lump sum will need to be paid when preparing and lodging the 2020 income tax return.
Remitting Interest and Penalties
- If your business is affected by COVID-19, the ATO will consider remission of interest and penalties incurred after 23 January 2020. This will be on a case by case basis.
Low Interest Payment Plans
- If you are experiencing difficulties paying your existing and ongoing tax liabilities, the ATO is offering low interest payment plans to assist.
Super Guarantee Payments
- If you are an employer you MUST meet you super guarantee obligations for your employees, this submission of the relevant documentation and the payment.
5. STATE GOVERNMENT | COVID-19 Response Packages
Victoria – Economic Survival and Jobs Package
Payroll tax refund and deferral
Small and medium business will be refunded all payroll tax paid for the 2019-20 financial year and the payroll tax payable for July, August and September 2020 will be deferred until 1 January 2021.
Eligibility
- Businesses with annual taxable wages up to $3 million.
Requirements
- Businesses must continue to lodge returns but do not need to make further payments this financial year
- The SRO will directly contact eligible businesses to reimburse amounts already paid this financial year.
- SRO will send more information to eligible businesses about the administration of these measures.
Land tax deferrals
A 12 month deferral of land tax is available to certain owners.
Eligibility
- Total taxable land holdings of less than $1 million
- Must own a least one taxable non-residential property, e.g. Commercial property, industrial property or vacant land (which is not residential vacant land)
SRO will contact eligible taxpayers. Please note instalments already paid will not be refunded, however amounts owing will be eligible for a deferral.
Business Support Fund
A $500 million Business Support Fund will assist small to medium businesses most impacted. In the following industries, hospitality, tourism, accommodation services, arts and entertainment and retail.
Working for Victoria Fund
Displayed workers will be eligible to apply for different opportunities for paid work and to contribute to Victoria’s ability to mange this event and support the community. Follow this link to register your interest and receive more details directly from the Victorian Government as they become available.
New South Wales – COVID-19 Package
Payroll Tax waiver
$450 million for Businesses with payrolls of up to $10 million will have their payroll waved for April, May and June 2020.
Payroll tax threshold increase
The payroll tax threshold will by raised to $1 million in 2020-21
$80 million to waive a wide range of fees and charges for small business
Tasmania – Support & Stimulus Package
Payroll Tax waiver
Businesses with payrolls of up to $5 million will be able to apply, based on impact to have their payroll tax waived from April to June 2020.
Other measures
The other measures focus on the hospitality, tourism and seafood industry as well as the building and construction and manufacturing sectors.
Please reach out to the DPM Tax team if you have questions:
– for existing DPM clients, click here.
– for non DPM clients, click here.
Disclaimer: * The information contained in this site is general and is not intended to serve as advice. DPM Financial Services Group recommends you obtain advice concerning specific matters before making a decision.
Useful links & sources:
Australian Federal Government – COVID-19 Stimulus
Australian Treasury
ATO COVID-19 Response Measures
ATO COVID-19 Response
