Coronavirus Stimulus Package – what are you entitled to?

In response to the coronavirus pandemic, the Federal and State governments have announced a range of stimulus packages.  The initial Federal package is costed at $17.6 billion and NSW State package at $2.3 billion, but more may be announced if needed.  The packages comprise four elements targeted at different areas of the economy.

Assistance for those receiving Government Income support.

Around 6.5 million lower income people will get a one-off $750 payment, intended to stimulate domestic demand in the economy.  The payments will be made to social security benefit recipients, as well as families receiving family tax benefits.  The payment is tax free and doesn’t count as income for income testing purposes.

The payments will start to be paid automatically from 31 March 2020, and the government has indicated that over 90% of payments will be made by mid-April 2020.

More information, including complete eligibility criteria, can be found here

Assistance for Employers

Businesses with turnover of up to $50 million per year will receive up to $25,000 to assist with the cost of salaries and wages.  The payment will be delivered as a credit through the activity statement system commencing on lodgement of the March 2020 activity statement.  The credit will be 50% of the amount of PAYG withheld, capped at a total of $25,000.  There’s a minimum payment of $2,000 for employers even if they aren’t required to withhold tax.

NSW businesses with payrolls of up to $10 million will have their payroll tax waived for the remainder of the financial year.  The payroll tax threshold will also be raised to $1 million for the next financial year 20-21.

A wage subsidy of 50% of apprentice and trainee wages, up to a maximum of $21,000 per eligible apprentice or trainee.  The subsidy will be paid to eligible employers for up to nine months from 1 January to 30 September 2020.

Detailed information on the Federal Government proposals can be found on the Treasury Website

Support for Business Investment

The instant asset write-off threshold will be lifted to $150,000 (from the current amount of $30,000), and access extended to businesses with turnover of up to $500 million (from the current $50 million).  Like the existing rules, the threshold applies on a per asset basis, meaning that businesses can immediately write off multiple assets provided each cost $150,000 or less.  It is proposed that these thresholds will apply until 30 June 2020, and from 1 July 2020 will revert to an instant write off of up to only $1,000 for businesses with turnover less than $10 million.

A further investment incentive is also proposed to apply to eligible assets that are first used or installed by 30 June 2021.  This proposal will accelerate depreciation deductions for assets acquired by businesses with aggregated turnover below $500 million.  Acquisitions that meet the criteria will qualify for a deduction of 50% of cost in the year of installation, with existing depreciation rules applying to the balance of the asset’s cost.

Detailed information and examples can be found here

Assistance for Severely Affected Regions

$1 billion will be used to support regions that are disproportionately affected by the coronavirus outbreak, such as those that rely on tourism, agriculture and education.  Measures introduced will include waiving certain fees and charges, assisting with identification of alternative export markets and supply chains, and promotion of domestic tourism.

The ATO will also provide administrative relief for certain tax obligations for taxpayers affected by the coronavirus outbreak on a case-by-case basis.

Further details on this area, though quite limited, can be found  here

Legislation to enact the stimulus package is being drafted, and is expected to be introduced to parliament when it reconvenes on 23 March.

Should you have any questions in relation to how these stimulus packages may affect your situation, please do not hesitate to contact us.