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KDA NEWS UPDATE - Part 2 - Government Stimulus Package

KDA NEWS UPDATE - Part 2 - Government Stimulus Package

Over the weekend, the Australian Government announced additions to the Economic Stimulus Package in response to the Coronavirus (COVID-19) pandemic.

In addition to the measures mentioned in our previous news update.  We have summarised the key measures and the anticipated impact on small businesses below. For more information, visit the government website.

For any questions relating to how this affects your business, we encourage you to contact KDA via phone (08 9248 9991) or email admin@kdaaccountants.com.au.

1. Income Support for Individuals

Who is eligible?
Existing and new recipients of JobSeeker Payment, Youth Allowance Jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit.

What is the benefit?
The Government have introduced an additional "Coronavirus supplement" of $550.00 a fortnight. This is on top of any other benefits you may be received such as, Jobseeker (formerly known as Newstart). Casual Workers and Sole Traders who currently make less than $1,075.00 a fortnight will be eligible to receive the full supplement. Essentially doubling the Jobseeker payment.

When does this apply?
This will apply from April and remain for the next 6 months. Individuals will have to apply through Centrelink.

2. Temporary Early Release of Superannuation

Who is eligible?
Individuals who have had their income or hours reduced by 20% or more.

What is the benefit?
Individuals can access their Superannuation Fund early and take out up to $10,000 of Superannuation, tax-free.

When does this apply?
Individuals can access $10,000 in FY2019-20 and a further $10,000 in FY2020-21.
Individuals will have to apply through their MyGov Portal.

3. Guaranteeing Unsecured Small Business Loans up to $250,000

Who is eligible?
Small to Medium Businesses with less than $50 million revenue. 

What is the benefit?
Small to Medium Businesses can access special government guaranteed loans of up to $250,000. The term of the loans will be a 3 years with an initial 6-month delay on having to make repayments. Loans are considered unsecured meaning businesses will not have to provide an asset as security for the loan. Normal lenders' credit assessment processes will apply. 

When does this apply?
The special loan scheme will commence in early April 2020 and be available through participating banks up until 30 September 2020.

4. Boosting Cash Flow For Employers

Who is eligible?
Businesses and Non-for-profit organisations with less than $50 million revenue and employ staff are eligible.

What is the benefit?
The government will give employers the equivalent of 100% of PAYG withholding tax for employees (up to a maximum of $100,000). Even if your business pays salaries or wages and are not required to withhold tax from their employees, you will still receive a minimum payment of $20,000. The payment/credit received is tax-free and will not be included assessable income to your business. 

When does this apply?
Applies to any BAS or IAS period between 1 January 2020 to 30 June 2020. The benefit will apply directly to your ATO Activity Statement Account after a BAS or IAS is lodged. Essentially, your businesses PAYG withholding bill will be refunded for each IAS and BAS until the benefit reaches $100,000. This is an increase from their previous stimulus offering 50% of PAYG withholding tax with a maximum threshold of $25,000.

Please note: This is not a direct cash incentive, but will apply as a credit in your BAS or IAS.

For any questions or for more information about the economy and government stimulus packages, email us at admin@kdaaccountants.com.au.