Over the weekend, the Government announced further measures to assist individuals and small businesses with the significant financial repercussions being caused by the Coronavirus. Read on has to what these mean for you.
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 will be paid to both existing and new recipients of the JobSeeker payment, Youth Allowance jobseeker, Parenting Payment, Farm Household allowance and Special Benefit.
This supplement will be paid for the next six months with eligible income support recipients receiving the full amount on top of their payment each fortnight.
Payment to support households
In addition to the $750 stimulus payment announced on 12 March 2020, the Government will provide a further $750 payment to social security and veteran income support recipients and eligible concession card holders, except those receiving an income support payment that is eligible to receive the Coronavirus supplement (see above).
The first payment will be made from 31 March 2020 to people entitled to eligible payments between 12 March 2020 and 13 April 2020. The second payment will be made automatically from 13 July 2020.
Early release of superannuation
The Government will allow individuals in financial stress resulting from the Coronavirus to access up to $10,000 from their superannuation in 2019/20 and a further $10,000 in 2020/21.
Eligible individuals will be able to apply through myGov to access their superannuation. This is not an automatic release as conditions around the early release of superannuation benefits continue to apply.
Temporary reduction in superannuation minimum drawdown rates
The Government is temporarily reducing superannuation minimum drawdown requirements for account based pension and similar products by 50% for the 2019/20 and 2020/21 financial years. That is, for someone with a current minimum drawdown of 4%, this will be reduced to 2% for these periods.
Reducing social security deeming rates
As of 1 May 2020, the lower deeming rate will be 0.25% and the upper deeming rate will be 2.25%. This is likely to translate in a modest increase in Age Pension payments and possibly grant access to the Age Pension to those currently not eligible.
Assistance to business to keep their employees
The Government is providing up to $100,000 to eligible small and medium sized business along with not-for-profits (including charities) that employ people, with a minimum payment of $20,000.
The payments are tax free with payment flowing automatically via the ATO. Payments will be available from 28 April 2020 so presumably will follow lodgement of the periodic Activity Statement.
Coronavirus SME Guarantee Scheme
With businesses reluctant to borrow, the Government will guarantee 50% of new loans issued by eligible lenders to SMEs.
Temporary relief for financially distressed businesses
The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive. The package also includes temporary relief from directors from any personal liability for trading while insolvent.
This relief measures seems to be aimed at companies with amendments to be made to the Corporations Act 2001 to reflect these. There is no indication from the Government announcement as to how sole traders/partnerships or individual trustees of trusts will be affected.
How can we help?
To understand how these measures apply to you, please feel free to get in touch and we will do our best to help you. As you can understand, the first round of Government announcements generated lots of enquiries and I expect this to do the same. Both me and my team will do our best to respond to you as quickly as we can.
Stay well and keep smiling!!