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Over the weekend the Federal Government announced another round of stimulus package measures in response to the COVID-19 crisis. The second package of $66 billion is aimed at helping SMEs keep staff employed and assist workers that have lost jobs due to the crisis.

Cash Flow Boost for Employers

The Government has increased the previously announced measures to provide cash flow support to business. More information on the original announcement from 12 March can be found here.

Now, eligible businesses with a turnover of less than $50 million will initially be able to access tax-free cash flow support, via a reduction of PAYG withholding liabilities, with the minimum amount being increased to $10,000 and the maximum amount increased to $50,000 (previously $2,000 to $25,000). However, additional support will be provided in the July – October 2020 period so that eligible entities will receive total minimum support of $20,000 and up to $100,000.

This should assist more businesses to keep staff on during the crisis.

Not-for-profit employers, including charities, with an aggregated turnover under $50 million will also be able to access the cash flow support.

We will have to wait for the legislation for the finer details.

Access to Superannuation

Individuals in financial stress as a result of the COVID-19 crisis will be able to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. The withdrawals will be tax free and will not affect Centrelink or Veterans’ Affairs payments. 
To be eligible to access your superannuation you need to meet 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 from 1 January 2020
  • you were made redundant; or
  • your working hours were reduced by 20% or more; or
  • if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20% or more.

Please check your myGov account to apply online before 1 July 2020.

Superannuation Minimum Drawdowns Temporarily Reduced

For retirees this will offer them more flexibility on how they manage their superannuation assets. The temporary reduction will see the minimum drawdown required for account based pensions reduced by 50% for 2019-20 and 2020-21.

COVID-19 SME Loan Guarantee Scheme

To help SMEs grow at this time, the Government has established the Coronavirus SME Guarantee Scheme. This will support SMEs to access funds to get them through the impact of COVID-19.

This will see the Government guarantee 50% of new loans issued by eligible lenders to SMEs.

With the recent announcement by the Government to cut red-tape to allow SMEs to access credit faster and by the Australian banks to support small business existing loans this should ease the pain for many. 

Sole traders and self-employed eligible for Jobseeker payment

The eligibility criteria to access income support payments will be relaxed to enable the self-employed and sole traders whose income has been reduced, to access support.

Time limited fortnightly $550 ‘coronavirus supplement’

For the next 6 months, the Government is introducing a new Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients in the eligible payment categories.

The payment will be made to those receiving various welfare payments as previously announced.

In addition, eligibility to income support payments will be expanded to:

  • Permanent employees who are stood down or lose their job
  • Casual workers
  • Sole traders
  • The self-employed
  • Contract workers who meet the income test

The Government notes that these criteria could include those required to care for someone affected by the Coronavirus.

The payment is not available if you have access to any employer entitlements such as annual or sick leave or income protection insurance.

Second $750 payment to households

The Government is now providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders residing in Australia (see the full list here). The payment will be exempt from taxation and will not count as income for the purposes of Social Security, Farm Household Allowance and Veteran payments.

Read our full COVID 19 Stimulus and support Measures report.