In addition to last weeks Stimulus package, the Australian Government has issued a second tranche of the economic support package.

Below is a summary of the main items:

Boosting cash flow for employers

Last week I wrote that the support employers were going to receive was 50% refund up to $25,000 for wages withheld to June. This measure has now been upgraded to be 100% refund of wages withheld from January to September 2020 up to $100,000. This is to be paid in two $50,000 tranches, January to June and July to September.

There is a minimum payment of $20,000.

To qualify for this you need to be a small to medium sized entity with turnover under $50 million that employ workers. You must have been an employer prior to 12 March 2020. The additional payment for the period from July, is that your business must be active

The payment will be delivered as a credit against Business Activity Statements. Lodgement of Business Activity Statements is imperative.

Supporting Apprentices and Trainees

There has been no change to the email last week in this area.

Enhancing the instant asset write-off

There has been no change to the email last week in this area.

Temporary insolvency relief

Directors will now be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business, with the measure set to run for six months.

Cases of dishonesty and fraud will still be subject to criminal penalties. Any debts incurred by the company will still be payable by the company.

Further, the government will increase the current minimum threshold for creditors issuing a statutory demand on a company under the Corporations Act 2001 from $2,000 to $20,000 for six months.

The statutory time frame for a company to respond to a statutory demand will also be extended temporarily from 21 days to six months.

Likewise, the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor will temporarily increase from its current level of $5,000 to $20,000.

The time a debtor has to respond to a bankruptcy notice will be temporarily increased from 21 days to six months.

Sole trader support

The government will establish a new $550 fortnightly coronavirus supplement payment.

Permanent employees who are stood down or lose their employment, sole traders, the self-employed, casual workers and contract workers will be able to access the new coronavirus supplement under expanded access to the JobSeeker Payment, formerly known as Newstart.

The supplement will also be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.

The payments, set to commence from 27 April.

Stimulus payments to households

Last week I wrote that there would be a one off payment of $750 for eligible social security holders. This now has increased to two payments of $750 to eligible recipients.

The first payment will be from 12 March to 13 April.

The second payment will be available to eligible people on 10 July 2020.

Temporary early access to superannuation

Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation).

Eligibility

To apply for early release you must satisfy any one or more of the following requirements:

• you are unemployed; or

• you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or

 • on or after 1 January 2020:

  • you were made redundant; or
  • your working hours were reduced by 20 per cent or more; or
  • if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.

People accessing their superannuation will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

How to apply

If you are eligible for this new ground of early release, you can apply directly to the ATO through the myGov website: www.my.gov.au. You will need to certify that you meet the above eligibility criteria.

Temporary reduction in superannuation minimum drawdown requirements

This measure will benefit retirees with account-based pensions and similar products by reducing the need to sell investment assets to fund minimum drawdown requirements.

The reduction applies for the 2019-20 and 2020-21 income years.

If you have exceeded the reduced minimum drawdown amount, you cannot recontribute the excess taken.

From the above there are many planning scenarios that can be taken place for small to medium sized businesses. We will be reviewing our business clients when we do the tax planning in the next few months.

For people that have self managed superannuation funds, should you have any questions please contact us.

Should you have any questions on the items above please contact me or the staff on 02 9923 2959 or mark@mcaccg.com.au

In the event that the office is forced to be shut down, please contact Mark on 0439 992 838.