covid-19: Information & Aid

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This page will be updated as new announcements are made - Illumin8 will continue to share all information that we have as and when we can. Coronavirus (COVID-19) is here, and it's not going away anytime time soon.

Here is our crack at summarising it all for you.

Last updated: 2 October 2020

Federal Government

JobKeeper Payment

Eligible employers, will receive a flat $1,500 per fortnight payment for every eligible employee they pay for a 6 month period from 30 March 2020. Full fact sheet can be found here.

Eligible employers will look like

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
  • the business is not subject to the Major Bank Levy.
  • The employer must have been paying eligible employees as at 1 March 2020

Important to note, Not For Profits & Sole Traders businesses that are employing eligible employees are also able to access the JobKeeper payments.

Eligible employees will look like

  • are currently employed by the eligible employer (including those stood down or re-hired);
  • were employed by the employer at 1 March 2020;
  • are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
  • are at least 16 years of age;
  • are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
  • are not in receipt of a JobKeeper Payment from another employer.

Important to note. The JobKeeper payments will be reportable to Services Australia and might impact access to other payments.

Business who don't have employees (i.e. sole traders)

Don't lose hope - it is suggested that you can still apply for this by nominating an individual (presumably the sole trader) and provide a declaration as to recent business activity.

A monthly update will need to be provided to the ATO to declare their continued eligibility for the payments.

What if the employee earns less than $1,500 per fortnight?

You will still get the full $1,500 amount and are required to pass it on (after withholding PAYGW) to the employee.

Superannuation will only be payable on an employees standard wage if the JobKeeper amount results in them receiving a higher amount.

JobKeeper 2.0

Announced 21 July, JobKeeper has been extended, yet V2 will look a touch different than the original version.

Employee Payment Changes

There will now be 2 tiers of payments for employees. The tiers are based on the the average hours worked over the 4 weeks preceding 1 March 2020.

The payments will also reduce over time as the government looks to wean business off the reliance on JobKeeper payments.

Tier 1

If an employee averaged greater than 20 hrs in the 4 weeks prior to 1 March or 1 July 2020, they are considered a Tier 1 Employee.

Payment rates for Tier 1

  • For payments in the December 2020 quarter - $1,200 per fortnight
  • For payments in the March 2021 quarter - $1,000 per fortnight

Tier 2

If an employee averaged less than 20 hrs in the 4 weeks prior to 1 March or 1 July 2020, they are considered a Tier 2 Employee.

Payment rates for Tier 2

  • For payments in the December 2020 quarter - $750 per fortnight
  • For payments in the March 2021 quarter - $650 per fortnight

Yes, same as before - employees must be paid the amounts in advance before they are refunded back end of month.

Why the change in payments? A few reasons in our opinions

  1. If they just cut dry the payments it would be a high cliff for business to be jumping down from. This eases them back to full independence
  2. Centrelink took a massive hit when JobSeeker happened, and would have collapsed (Sco-Mo & J-Fry tell us) but for the shift to JobKeeper. The 2nd tier recognises that some part time or casual employees were not earning anywhere near what they were receiving for JobKeeper
  3. It starts pushing employees to hunt for work (debatable whether there is work out there to hunt for).

Employer Eligibility Changes

We had been told for the original JobKeeper scheme that once you are in, you are in for good. That the decline in turnover was a combo of 50% (over $1b in t/o), 30% (less than $1b in t/o) or 15% (charity).

Well - now 2.0 is here, they are tweaking that to ensure that businesses that have recovered are not still receiving benefits.

Reduction in turnover % will remain as per JobKeeper 1.0 (50%, 30%, 15%) but we will see changes to how the testing periods will apply.

For payments in the December 2020 quarter, you will need to evidence that turnover had decreased in the September 2020 quarters. Yup - for a standard business, that means you have been 30% down for 3 months.

For payments in the March 2021 quarter, you will need to evidence that turnover had decreased in the December 2020 quarter. Again - for a standard business, that means you have been 30% down for 3 months.

Important to note that it's 30% down for the quarter, which allows for a good month or two, combined with a bad month or two.

The language the release is using is "actual GST turnover" and they are making reference to BAS lodgements.

Boosting cash flow for employers

Helping small/medium businesses with aggregated annual turnover under $50 million and Not-For-Profits to cover the costs of employee wages and salaries equal to 100 per cent (yes 100%) of PAYG withheld for businesses that withhold tax, with a minimum of $20,000 and a maximum of $100,000

This measure was initially announced as being 50% with a minimum of $2,00 up to a max of $25,000.

Businesses that pay salary and wages but are not required to withhold tax will also receive the minimum payment of $10,000.

There are 2 tranches of payments.
1 - Applied upon lodgements of BAS/IAS from March to June 2020 - up to 100% of PAYGW, capped at $50,000
2 - Applied upon lodgement of BAS/IAS from June to Sep 2020 - equal to the amount received in the March-June 2020 period
This will be a tax free payment, benefiting around 690,000 businesses employing 7.8 million people.

As an employer, you do not need to apply for this relief - the ATO will apply it post lodgement of your IAS and/or BAS during the March to June 2020 period. Tax & Cashflow planning however, a big deal! Make sure you check in to see if this is relevant & helpful for you.

Supporting apprentices and trainees

Helping businesses retain apprentices and trainees by offering a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for nine months.

The subsidy of up to a maximum of $21,000 (7k p/qtr), will be available to businesses employing fewer than 20 full-time employees who retain an apprentice or trainee, or, where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.

This will support up to 70,000 small businesses employing around 117,000 apprentices and covers costs from 1 Jan 2020 to 30 Sep 2020.

This relates to apprentices/trainees that were already under employment as at 1 March 2020. It will require a signed off assessment for eligibility by the Australian Apprenticeship Support Network, and a subsequent claim for payment. First claims can be made early-April. More information to come (it's a touch limited right now).

Check out https://www.australianapprenticeships.gov.au for more info.

Enhancing the instant asset write-off

Lifting the threshold to $150,000 (from $30,000) and expanding access to businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. The threshold applies on per asset basis, so eligible businesses can immediately write-off multiple assets.

If you purchase an asset in excess of the threshold limits you will be able to deduct 50% of the initial cost upon installation, and then the remaining balance will be treated by standard depreciation rules that currently exist.

State of Victoria

Payroll Tax

In our humble opinion, the worst tax known to human kind.

Well, good news – if you are currently paying payroll tax, and you pay less than $3m to employees, every cent you have paid from July 2019 will be refunded.

Additionally, payments for the July-Sep 2020 quarter will be deferred until January 2021.

This amount will be refunded in cash, and can be applied for 27 March 2020.

Business Support Fund - Third Round

Additional business support announced Monday 3 August

The Victorian Government recently announced a third round of the Business Support Fund – ensuring businesses impacted by coronavirus (COVID-19) restrictions continue to receive the support they need to make it through restricted trading. You may be eligible for a grant if your business operates in an industry sector that is Restricted, Heavily Restricted or Closed and for which restrictions are not easing between the First and Second Steps in the ‘How we work’ roadmaps.

Eligible businesses with payrolls of up to $10 million will receive:

  • $10,000 if its annual payroll is less than $650,000
  • $15,000 if its annual 2019-20 payroll is between $650,000 and less than $3 million
  • $20,000 if its annual 2019-20 payroll is between $3 million and up to $10 million.

What is an eligible business?

  • operate a business located within Victoria; and
  • participate in the Commonwealth Government’s JobKeeper Payment scheme; and
  • employ people and be registered for Workcover Insurance with WorkSafe Victoria; and
  • have had an annual payroll of less than $10 million in 2019-20; and
  • be registered for Goods and Services Tax (GST); and
  • hold an Australian Business Number (ABN); and
  • be registered with the responsible Federal or State regulator.

Grants may be used to assist the business on:

  • meeting business costs, including utilities, salaries or rent;
  • seeking financial, legal or other advice to support business continuity planning;
  • developing the business through marketing and communications activities; or
  • any other supporting activities related to the operation of the business.

Businesses that have received a grant from the Licensed Hospitality Venue Fund grant program are not eligible to receive a grant from this program. At the same time, businesses that have received a grant from this program are not eligible to receive a grant from the Licensed Hospitality Venue Fund grant program.

More information about this fund and to apply, visit the Business Victoria website.

Outdoor Eating and Entertainment Package Business Grants

The $58 million Outdoor Eating and Entertainment Package business grants help businesses adapt their operations to outdoor dining. Grants are available to licensed and unlicensed hospitality businesses, including restaurants, cafes, pubs/taverns, bars, clubs and takeaway food venues.

Eligible businesses can apply for a grant of $5,000. Funds can be used to pay for practical things like umbrellas, outdoor furniture, screens and other equipment. This will help move the indoor dining and cafe experiences Victorians love, outdoors.

Recipients can also use grants for training, marketing and other costs of adapting new, expanded or enhanced outdoor dining.

If your business is not eligible for a grant under this program, you may be eligible for support under the Victorian Government’s Business Resilience Package.

More information about this fund and to apply, visit the Business Victoria website.

Licensed Hospitality Venue Fund

The Victorian Government is providing support for licensed pubs, clubs, hotels, bars, restaurants and reception centres to help them survive through ongoing coronavirus (COVID-19) restrictions. Eligible hospitality businesses will receive grants of up to $30,000 based on the location of their premises and maximum patron capacity.

To be eligible for a grant from this program, applicants must:

  • Operate a licensed pub, club, hotel, bar, restaurant or reception centre under a general, full club or on-premises liquor licence issued by the Victorian Commission for Gambling and Liquor Regulation, and
  • Have premises that serve patrons and holds a Class 2 or 3 Service Sector – Certificate of Registration under the Food Act 1984 (Vic) issued by a local council.

A valid ABN or equivalent will need to be provided for the premises, as well as liquor licence and food Certificate of Registration. Note: businesses that are eligible for Licensed Hospitality Business Grant will not be eligible for third round of the Business Support Fund.

Eligible businesses will receive grant amounts as per below

Metropolitan Melbourne

  • 1-20: $15,000
  • 21-100: $20,000
  • 101 or more: $30,000

Regional Victoria

  • 1-20: $10,000
  • 21-100: $15,000
  • 101 or more: $25,000

A full list of the eligibility criteria for a grant will be published when applications open.

Working for Victoria Fund

$500 million has been allocated to establish the Working for Victoria Fund in consultation with the Victorian Council of Social Services and Victorian Trades Hall Council. The fund will help workers who have lost their jobs find new opportunities, including work cleaning public infrastructure or delivering food – providing vital contributions to our state’s response to the pandemic and affording those Victorians security when its needed most.

The Government will also facilitate job matching to help Victorians find short-term or casual roles.

Temporary access to superannuation

If impacted, you will be able to access your superannuation, when ordinarily it would be locked away for your 65 yr old self.

The amount accessible totals $20,000, in two 10,000 payments either side of 30 June 2020.

IMPORTANT – accessing your super at a time like this might be a necessity but be aware that your ability to retire in the future will be impacted, not to mention that the markets have crashed, potentially leaving your super balance very low. Best to seek out some advice on what to do here from a licensed financial advisor.

Sole Traders

Income Support

A few changes here including

  • Making it easier to qualify, apply for & receive the Newstart allowance
  • Adding a Coronavirus Supplement equal to $550 per fortnight
  • Those on social security, veteran and other income support recipients and eligible concession card holders will receive 2 additional $750 payments. One in April and one in July.

Announced 30 March 2020 was that the partner income limit for the Jobseeker payments noted above would be increased from $48,000 to $79,762 giving further access to many others.

Payments wont start hitting your bank account until April, and will be backdated to when your employment situation changed.

Jobkeeper

As discussed in the federal funding section - it appears that this will be accessible for sole traders as an alternative to applying for NewStart.

Managing Tax Obligations

As with times of ordinary business conditions, it is highly advisable to ensure you maintain open communication with the ATO (as well as with your bookkeeper/accountant). The ATO will be operating with an understanding that businesses ability to pay their current tax obligations will be impacted, and will work with you to ensure you can manage them appropriately.

The options available to the ATO to assist businesses impacted by COVID-19 include:

  • Deferring by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise.
  • Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.
  • Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters.
  • Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities.
  • Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.

Best thing to do - lodge on time, and then communicate immediately if you need payment relief.

Banks

Most banks have hardship assistance programs in place to help those in need. They can be found on their websites. Specifically relating to COVID-19 the following has been announced.

The Australia Banking Association is a great resource to understand what you bank is offering - check their info our here.

CBA - check more info our here

  • Reducing commercial interest rates by 0.25
  • Extended hours for lending teams for faster decisions
  • Deferring repayments on a variety of business loan and overdraft products, for 90 days.
  • Waiving merchant terminal fees for impacted customers with CBA payment terminals, for 90 days.
  • Waiving early redraw fees on business term deposit accounts (including Farm Management Deposit accounts).
  • Waiving establishment fees and excess interest on Temporary Excess products.
  • Deferring repayments on vehicle and equipment finance loans, and providing tailored restructuring options that meet individual customer needs.

ANZ - check more info our here

  • Suspending interest repayments
  • Providing early access to term deposits without incurring break fees
  • Providing access to additional credit subject to approval

NAB - check more info out here

  • Deferral of business loan repayments for up to three months, assessed on a case-by-case basis
  • Extension of a business loan term by a period of up to three months, where individual circumstances warrant
  • Support to restructure existing business loans, including equipment finance
  • Business credit card deferred repayments.

Westpac - check more info our here

  • Continuing it's hardship assistance program
  • Deferring repayments for 3 months

Bendigo - check more info out here

  • Home Loan and Business Loan customers can apply for relief on loans for up to three months
  • Waiver of fees for the restructuring or consolidation of loans
  • Credit card customers can apply for an emergency credit card limit increase
  • Discounted interest rates on new personal loans taken out by existing Bendigo Bank customers
  • Waiver of interest rate reduction for early withdrawals on term deposits prior to maturity
  • Deferral of payments and extensions for Equipment Finance on a case by case basis

Fair Work - Employment Info

Fair work has a page dedicated to helping you understand your obligations as an employer. You can check that out here

We recommend getting in touch with a HR specialist as well -lets ensure we are treating our people well!

Business Support

Businesses impacted by COVID-19 can phone the Emergency Support Infoline on 1800 806 218 for help tailored to your circumstances.

You can also talk to us here at Illumin8 so we can work with you to manage your business through the current uncertainty.

At Illumin8 we have been hard at work on finding a way to best work with our clients & the small business community weather the storm that COVID-19 has produced.

Thanks to some incredible people in the Australian community, we have been able to fast track a Business Continuity Plan that we hope will bring some calm, as well as help design business for the future.

In an idea world, we give it away for free - however given we have staff, and other costs to keep our business afloat, we have decided to take 2 options

1 - Deliver these one on one for a one off fee of $500+GST
2 - Run a webinar where we can deliver for a handful at a time for $75+GST

Need accounting? Illumin8 accountants are Xero, Tax & Financial Services Experts