1 June 2020

This is a reminder for any businesses that are either currently enrolled in the JobKeeper program, or may wish to consider registering if their business is now eligible.

For those currently registered in the JobKeeper program

A declaration is required to be lodged each month so you can receive your JobKeeper payment.

The important dates to remember for the May declaration are:-

• 1 June 2020 – May declaration process is open
• 14 June 2020 – May declaration must be completed

You will need to declare the following:-

• Your actual GST turnover for the month of May
• Your projected GST turnover for the month of June
• Confirm that the employees/business participants nominated remain eligible to receive the JobKeeper payment
• That your bank details have not changed

The May declaration is now open via the Business Portal/your tax agent. If i2 Advisory are to lodge the above details on your behalf, we will be in contact shortly to assist you to collate the above information.

For those not currently registered in the JobKeeper program

Please review your figures and discuss the program with your accountant to see if you are now eligible for the program. Just because you have not registered to date, does not mean you won’t ever be able to. Currently, registrations can be entered into up until the end of the program on 27 September 2020.

South Australian Government Small Business Grant – $10,000 Emergency Cash Grant

If you are not currently registered for this grant, and you may be eligible, please get in contact with us as a matter of urgency as registrations close today, 1 June 2020. Further information about the eligibility criteria or the grant can be found here.

If we can assist with the above or any other matters, please do not consider to contact us at admin@i2advisory.com.au or 08 8132 6400.

6 May 2020

JobKeeper

• Enrolments for April and May 2020 – you have until 31 May 2020 to enrol. However, please note you only have until 8th May 2020 if you need to ‘backpay’ staff for April 2020 to the minimum $1,500 amount per fortnight required (see below table)
• The next step in the JobKeeper process for identifying eligible employees and business participants is now open. This step needs to be completed in order to receive any subsidies you may be entitled to and includes:-
  • Identifying eligible employees and business participants
  • Stating your April 2020 turnover and your May 2020 projected turnover
  • Confirming information the ATO already have on hand from the enrolment process
• If after lodging this step of the JobKeeper payment process, you do not receive the first payment from the ATO in a timely manner (a week at most), please contact us as there may have been issues with verifying your application. A monthly declaration will be required on an ongoing basis until the JobKeeper period has finished (September 2020).
• Please find below a very useful table regarding the timing of payments for those eligible for the JobKeeper Scheme:-

Please note eligible business participants are not required to have the JobKeeper payment paid to them from the business.

If you have any queries, please do not hesitate to contact us on (08) 8132 6400 or admin@i2advisory.com.au

24 April 2020

Cash Boost

• No action required – this will occur upon lodgement of your March to June 2020 BAS’. The first tranche will be between $10K and $50K.
• The 2nd tranche will also automatically occur over the lodgements of your June to September 2020 BAS’ and will match the 1st tranche in amount.

JobKeeper

Immediate

• Assess your business’s eligibility for JobKeeper payments by contacting your i2 Advisory accountant for assistance or alternatively reviewing your eligibility here

From now but by 30 April 2020* (the earlier the better)

• Enrol for JobKeeper payments via the ATO Business Portal
• Should you not have access to the ATO Business Portal or require assistance with the registration please contact your i2 Advisory advisor for assistance.
• As per the ATO as at 23 April 2020, to ensure you receive your JobKeeper payments as early possible, you should enrol by the end of April.

By 30 April 2020

• Communicate with each eligible employee and request they complete the employee nomination form and return it to you.
• Make top up payments to employees (where necessary).
• Identify your eligible employees via your STP enabled payroll software

From 4 May 2020

• Complete information for your specific eligible employees in the online application form (yet to be provided) on the ATO Business Portal or via i2 Advisory.

Ongoing (each month)

• Reconfirm your reported eligible employees have not changed through ATO online services, the Business Portal, or via your i2 Advisory advisor
• Complete your ongoing monthly reporting requirements, known as ‘Monthly JobKeeper Declaration Report’ via the ATO Business Portal or your accountant.
• Continue paying eligible employees the minimum fortnightly amount by the relevant date for that period.

State Government Grant

• If you are an employer and eligible for JobKeeper you should be entitled to a $10,000 grant from the SA Government
• Registrations are now open and if eligible, we recommend registering immediately using the following link

Please do not hesitate to contact us for further information on (08) 8132 6400 or admin@i2advisory.com.au. We are doing everything we can to assist you and your business be in a position to bounce back and take advantage of any possible business opportunities that may present themselves as we start to resume normality.

10 April 2020

To assist South Australian (SA) small businesses through the current economic crisis, the SA Government’s $650 million ‘Jobs Rescue Package’ is set to fund eligible businesses with a one off $10,000 cash grant. The grant will work in conjunction with the federal governments stimulus measures.

The eligibility criteria the business needs to meet includes:-

• Employing people in South Australia
• Turnover of more than $75,000
• Payroll less than $1.5 million, and not entitled to a payroll tax waiver under COVID-19 support measures introduced by the SA government
• Having an ABN and carrying on an active business in SA on 1 March 2020
• Having been subject to closure or ‘highly impacted by COVID-19 related restrictions’
• Use the funds to support activities related to business operations
• Apply by 1 June 2020

What does ‘highly impacted by COVID-19 related restrictions’ mean I hear you say? This is defined as those businesses which meet the definition of the Commonwealth JobKeeper payment (i.e. at least a 30% or 50% drop in estimated turnover (depending on scale of business)). Those that do will be deemed to have been ‘highly impacted by COVID-19 related restrictions’.

There are some additional conditions in relation to the grant that may reduce the amount received that you may need to consider which we can help advise on.

Currently, similarly to the JobKeeper payment, there is only an ‘ability to register’ your interest, with applications to open soon. We would recommend at least registering your interest to learn about the next steps if you believe you are, or will be, eligible. This can be done at https://www.treasury.sa.gov.au/Growing-South-Australia/COVID-19/registration

There are some additional SA Government measures in addition to the above to consider, including:-

• Payroll Tax relief – a possible 6 month waiver (April to September 2020) for those businesses with applicable wages of up to $4 million – no application required. Revenue SA will notify these businesses through RevenueSA Online. Businesses with more than $4 million in applicable wages can apply for relief.
• Job Accelerator Grants – some relaxing of the criteria for the existing grants in process, in regards to maintaining overall employment levels https://www.revenuesa.sa.gov.au/grants-and-concessions/covid19-relief
• Cost of Living (COL) concession – a once-off boost of $500 and bring forward of the 2020/21 COL concession for households receiving the federal JobSeeker payments.
• Land Tax – an increase in the existing ‘land tax transition fund relief’ as well as the ability for quarterly land tax payers being able to defer payment of their remaining 2019/20 land tax payments for 6 months.

For those in business in other states, we will also advise on any state related measures that may apply to you and your business.

If you would have any queries, or would like to get in contact with us to discuss the above measures, please don’t hesitate to contact our office on (08) 8132 6400 or admin@i2advisory.com.au  and we would be happy to help.

9 April 2020

We have all been affected financially in some way by the impact of COVID-19 from business downturn, our superannuation balances falling, or a decrease in wages.
The goal is to be able to hibernate ourselves financially so we can come out of this crisis in the best financial position possible.
The following tips will assist you in managing through these tough times:

1. Cut costs – we are all saving due to the stay at home guidelines imposed on us – but you should also take the time to review all your items of expenditure to reduce cash burn.
2. Prepare a household budget – this is the best way to understand costs and identify savings.
3. Review your current home loan interest rate – ask the bank for a lower rate or look into fixed rates.
4. Look at refinancing credit cards and combining with home loans to reduce interest costs and monthly repayments.
5. Seek government assistance packages available.
6. Maximise your tax refund – with many of us working from home you are able to claim a deduction for expenses relating to that work. However to be able to claim these expenses you must be able to substantiate such expenditure so start keeping records to maximise your claim:

• A record of the number of hours you are working from home during this period;
• Details of your light and power costs during the period, in order to determine the best method to claim;
• If home internet and home phone are being used, details of the costs incurred based on usage;
• Receipts for stationery costs and computer consumables;
• Receipts for office equipment, computer equipment (laptop, modem, computer screens) and software (anti-virus) costs;
• Records of mobile phone business usage, for emails, telephone calls, mobile hotspot, etc.

If you have been stood down or have a reduction in income from your employment you should consider taking the following actions:

1. Contact the bank and request that they defer home loan repayments – remember this could add a material amount of interest onto your home loan and many months of extra repayments. Some banks are offering to repay some of the interest so ensure you talk to your bank to get the best possible outcome.
2. Apply for:
   1. JobKeeper Payment  – some employers may be eligible and be prepared to continue to employ you under the JobKeeper scheme – if eligible you will be entitled to a fortnightly payment of $1,500 through your employer.
   2. JobSeeker Payment – the income tests and personal assets tests have been changed to make it easier to qualify for the JobSeeker Payment. You should apply through your MyGov Account. Instructions to assist you in this process can be found here:
      https://www.servicesaustralia.gov.au/individuals/services/centrelink/jobseeker-payment/how-claim. You should first check with your employer if they intend to pay you under the JobKeeper scheme. If they advise you are not eligible then you should apply for the JobSeeker Payment as soon as possible.
3. Consider accessing superannuation – Eligible taxpayers are able to withdraw $10,000 before the 30^th June 2020 and another $10,000 in 2020-21.

For more on the concessions that relate to superannuation we refer you to a more detailed paper that can accessed using the following link https://i2advisory.com.au/resources/covid-19/covid-19-superannuation-changes/

Our advice is if you can cut costs during this period, maximise government benefits and achieve a balanced household budget, this will reduce your need to defer home loan repayments and keep superannuation withdrawals to a minimum.  The more successful you are in achieving this, the better financial position you will be in when our lives return to normal.

Please refer to the fact sheets below for additional detail as to what you are entitled to.
Income support for individuals –
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Income_Support_for_Individuals.pdf

Payments to support households –
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Payments_to_support_households.pdf

Temporary early release of superannuation –
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Early_Access_to_Super_1.pdf

i2 Wealth Advisors

Should you not have a financial advisor that can guide you through these tough times regarding your superannuation or investments we can assist through i2 Wealth. Our fully licenced financial advisors Craig Muchamore and Don Sampson are available for a no obligation discussion regarding your financial options, to provide you with some insight and peace of mind. Should you require formal advice this will be provided under the Financial Services Guidelines which Craig and Don can explain in more detail.

Craig Muchamore – 0400 280 365 or cmuchamore@i2wealth.com.au
Don Sampson – 0408 081 758 or dsampson@i2wealth.com.au

As we head towards an Easter Break like no other in our lives the most important thing is to enjoy the break as we all spend time in isolation. These times make us reflect on what is important to us, namely our friends and family. Look after yourself and those around you, stay strong and let’s come out the other side of this even stronger.

From all at i2 Advisory Happy Easter and take care

7 April 2020

The Government has announced several changes to Superannuation in responses the economic impacts of Coronavirus.

Early access to superannuation

While superannuation helps people save for retirement, due to the unprecedented economic impact of Coronavirus, accessing superannuation today may outweigh the benefits of maintaining those savings until retirement.

As such the Government is allowing individuals affected by the Coronavirus to access up to $10,000 of  their superannuation in 2019-20 and a further $10,000 in 2020-21.

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.

Eligibility

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

• You are unemployed.

• 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.

• On or after 1 January 2020, either  

• • you were made redundant

  • your working hours were reduced by 20% or more

  • if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.

How to apply

The ATO will have sole responsibility for administering payments from super under the new coronavirus condition of release. You do not need to contact your superannuation fund directly.

MyGov will be the primary and recommended platform to register your intent to access. Simply log in and click the register your intention to access via the Coronavirus support banner on the MyGov homepage. If
you do not have MyGov you will need to contact the ATO directly or register with MyGov.

Once your interest has been registered, the ATO will contact you directly when the application form is available, which is expected to be mid-April.

You will need to provide bank details and amount requested for withdrawal, which will be provided to your superannuation fund along with the release determination. There is no need to contact your
superannuation fund directly.

The maximum allowed to be released prior to 30/06/2020 is $10,000. You can elect which superannuation fund the funds will be released from. The payment can come from multiple funds, as long as the total amount does not exceed $10,000 each financial year.

Applications can be made up to 30 June 2020 for this financial year and from 1 July 2020 until 24 September 2020 for the next financial year.

If you have a SMSF and wish to access the early release of superannuation you will still need to apply to the ATO. You can’t release any funds until you have received a determination from the ATO.

Any unused early access funds can be recontributed back in the superannuation in the future, subject to normal contribution caps.

If you have insurance in your superannuation, care should taken to ensure your balance is sufficient to pay premiums.

Temporary reduction in minimum pension

For many retirees, the significant losses in financial markets as a result of the COVID-19 crisis are having a negative effect on the account balance of their superannuation pension or annuity.

To assist retirees, the Government has reduced the minimum annual payment required for account-based pensions (including TRIS) and market-linked pensions by 50% in the 2019–20 and the 2020–21
financial years. This will apply to account-based pensions (including TRIS) and market-linked pensions within a SMSF.

The temporary reduction is intended to reduce assets required to be sold at lower prices to fund pension payments.

This relief does not apply to defined benefit pensions or lifetime pensions.

Superannuation providers calculate the minimum annual payment required at 1 July each year, based on the account balance. The 50% reduction will apply to the calculated minimum annual payment.

Pensions commenced after the announcement will still eligible for the reduction.

The revised rates for the 2019/20 and 2020/21 years will be as follows:

If you have a SMSF administered by us, we will be making contact shortly advising your new minimum pension.

If you wish to only pay the minimum pension you may need contact your superannuation provider to reduce or stop pension payments.

You may also elect that payments above the minimum pension amounts be treated as a lump sum payment.

Lump sum withdrawals may provide future benefit by crediting your transfer balance pension cap ($1.6m), which will allow future superannuation benefits to be moved into retirement pension (tax free) phase.

If you wish to obtain specific advice on the pension changes please contact your usual contact at i2.

Alternatively, if you wish to obtain specific advice on the pension changes and your investments in light of the market downturn, you should contact your financial adviser.

If you do not have an adviser, please note that i2 Wealth has two in-house fully licenced financial advisers who would be happy to assist if you wish. These advisors (Craig Muchamore and Don Sampson) are experienced and empathetic advisers who can discuss, review and guide you through your investment and portfolio management strategy. Please contact your usual contact at i2, who can put you in touch with the advisors.

Other things to note regarding superannuation

• SMSF with rental properties may consider providing rent relief to their tenants, including related party tenants if it’s commercial viable to do so. Please note any arrangements still have to be on an
  arms-length basis.

• SMSF trustees should be reviewing their investment strategies to ensure, their current investment mix and objectives reflect their current position given the current market volatility.

• Quarterly and annual transfer balance account reporting (TBAR) has not been delayed. Reportable events still need to be reported to the ATO prior to the deadline.

1 April 2020

The government announced at the end of March a further massive subsidy for businesses to help them retain employees so they are ready to get back to business when the current coronavirus issues subside.  The new subsidy is called a JobKeeper payment.

The key things to note about this are:

1. The payment will be made to eligible employers for eligible employees. The payment will be  $1,500 per fortnight per employee for a period of six months.  It will be paid in respect of full time and part time employees who were employed as at 1 March 2020. Also, casual employees will be eligible if they have been with their employer on a regular basis for at least the pervious 12 months as at 1 March 2020.
2. The employees must continue to be engaged by the business. If an employee has been stood down or has had their employment terminated, they can still be eligible.  If an employee’s employment has been terminated, the employee must be re-engaged by the business.
3. Not all employers are eligible for the payment. A business will be eligible:
   1. If the business has a turnover of less than $1 billion and its turnover will be reduced by more than 30% relative to a comparable period a year ago, of at least one month; or
   2. If the business has a turnover of $1 billion or more and its turnover will be reduced by more than 50% relative to a comparable period a year ago, of at least one month; and
   3. If the business is not subject to the Major Bank Levy.
4. Employers must elect to receive the JobKeeper payment and provide supporting information. This can be done through the ATO website.
5. Employers must report the number of eligible employees employed by the business on a monthly basis.
6. Where an employee is accessing support through Services Australia because they have been stood down or had their hours reduced and the employer is eligible for the JobKeeper payment, the employee will need to advise Services Australia of their new income. An individual cannot receive both the JobKeeper and JobSeeker payments.
7. If an employee has more than one employer, only one JobKeeper payment will be made to one employer. The employer claiming the JobKeeper payment will usually be the one from whom the employee claims the tax-free threshold.

8. Superannuation Guarantee contributions (9.5%) need not be made on the JobKeeper payments. However, to the extent an employee is paid their normal salary or wages, the 9.5% contributions still need to be paid as normal.
9. If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
10. If an employee has been stood down, their employer must pay the employee, at a minimum, $1,500 per fortnight, before tax.
11. If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight.
12. With regard to the timing of payments, the payments will be made to an employer monthly in arrears by the ATO. The Prime Minister has pointed out that this should not delay employers from making payments to employees.  This is because the employer can make payments to their employees in the knowledge that the employer will receive the JobKeeper payment.  Of course, this assumes that the employer has the cashflow to make the payment in the first place!
13. The JobKeeper entitlement will start on 30 March 2020, with the first payments to be received by employers in the first week of May.
14. For most businesses, the ATO will use the Single Touch Payroll system data to pre-populate the employee details for the business.
15. Employers must notify all eligible employees that they are receiving the JobKeeper payment.
16. The JobKeeper payment will be available for not-for-profit organisations.
17. The JobKeeper payment will also be available for the self-employed where they expect to suffer a 30% decline in turnover relative to a comparable prior period

1 April 2020

A legislative package has been pushed through Parliament which contains a number of bills that implement the government’s economic response to the spread of the coronavirus.

The relief package of legislation consisted of eight separate bills, which were all introduced to Parliament at the same time. The legislation has now passed both houses, with most applying from mid-March.

Instant asset write-off

The income tax law was amended to increase the cost threshold below which certain business entities can access an immediate deduction for the full cost of depreciating assets from $30,000 to $150,000. This change to the rules is only available from 12 March 2020 to 30 June 2020.  For an asset to be eligible for the instant asset write-off it must be first used for a taxable purpose in the period 12 March 2020 to 30 June 2020.  Alternatively, the asset must be installed and ready for use in that period.

In the Federal Budget announced on 2 April 2019, the Federal Government extended the instant asset write-off to businesses that have a turnover of between $10 million and $50 million.  This was in addition to small businesses that have a turnover of less than $10 million.

The instant asset write-off will now also apply to businesses that have an aggregated turnover of less than $500 million.  However, it will only apply to these businesses for the period 12 March 2020 to 30 June 2020.

This means that there will be two periods that you will need to consider in relation to purchases of assets in the year ending 30 June 2020.  The first period is from 1 July 2019 to 11 March 2020.  Eligible assets costing less than $30,000 can be written off completely in this period by businesses that have an aggregated turnover of less than $50 million.  From 12 March 2020 to 30 June 2020, eligible assets costing less than $150,000 (GST exclusive), can be written off by businesses that have an aggregated turnover of less than $500 million.

It should be noted that from 1 July 2020, the instant asset write-off threshold will revert to its original level of $1,000 and will only be applicable for businesses with an aggregated turnover of less than $10 million.  Accordingly, the coronavirus measures offer a strong incentive for most businesses to obtain a significant tax deduction that will no longer exist in the new financial year.

Accelerated depreciation

 This provides an incentive for businesses with aggregated turnovers of less than $500 million a year to invest in plant and equipment and other depreciating assets.

Specifically, the bill amends the income tax law to temporarily allow businesses with aggregated turnovers of less than $500 million in an income year to deduct capital allowances for depreciating assets at an accelerated rate of 50% of the cost of an asset.  This will be in addition to the normal depreciation that is claimed on the cost of the asset after deducting the 50% amount.

Generally, to be eligible to apply the accelerated rate of deduction, the depreciating asset must satisfy a number of conditions, including that the asset:

• is new and has not previously been held by another entity (other than as trading stock or for testing and trialling purposes);
• is an asset for which an entity has not claimed depreciation deductions, including under the instant asset write-off rules; and
• is first held, and first used or installed ready for use, for a taxable purpose between 12 March 2020 and 30 June 2021 (inclusive).

Boosting cash flow for employers

The cash flow boost provides for payments to support employers by boosting their cash flow. Another intention with this measure is to encourage the retention of employees through any follow-on downturn.

Undoubtedly, this part of the stimulus package is the most confusing.  Unfortunately, it also has the potential to be rorted by unscrupulous people.  That is why the measures contain an anti-avoidance provision.

Before explaining the detail, here are a number of statements about this part of the package that will assist with explaining certain aspects of what is known as the “cash flow boost”.

1. There are two rounds of cash flow boost.
2. The second cash flow boost is determined from the amount of the first cash flow boost.
3. The amount of the first cash flow boost is determined by the amount of withholdings from (broadly) wages or the minimum cash flow boost payment ($10,000), whichever is larger.
4. The maximum first cash flow boost amount is $50,000.
5. If eligible, the minimum “payment” to an entity will be $20,000 and the maximum will be $100,000 from the two cash flow boost payments.
6. The “payments” are actually credits given to the entity through the lodgement of activity statements. If the credits exceed the amount owing, a refund will be paid by the ATO to the entity within 14 days of the due date for lodgement of the activity statement.
7. The payments will operate in a different manner for monthly and quarterly lodgers of activity statements. The examples below will explain this.

Entities with an aggregated turnover under $50 million are generally eligible to receive the first cash flow boost for a period if:

• the entity makes a payment that is subject to withholding obligations (broadly, a payment of wages or salary or similar remuneration), whether or not any amount is actually withheld, in the period; and
• the period is one of the following:
  • the quarters ending in March 2020 or June 2020 for quarterly payers; and
  • the months of March 2020, April 2020, May 2020 or June 2020 for monthly payers; and
• if the entity:
• held an ABN on 12 March 2020; and
• either derived assessable income from carrying on a business in the 2018-19 income year or made one or more supplies for consideration in the course of an enterprise it carried on within Australia in tax periods commencing after 1 July 2018 and ending before 12 March 2020 and notice of the income or supplies was held by the Commissioner on or before 12 March 2020 or within such further time as the Commissioner allows (this notice appears to be either activity statements or an income tax return); and
• the entity (or an associate or agent of an entity) has not engaged in a scheme for the sole or dominant purpose of seeking to make the entity entitled to the first cash flow boost or increase the entitlement of the entity to the first cash flow boost.

There are some other conditions that we can help work through if you are an eligible business.

The timing of the cash flow boost needs to be noted as well. Quarterly lodgers will be eligible to receive the payment for the quarter ending March 2020 and June 2020. Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgements.  To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300%) in the March 2020 activity statement.

The minimum payment [$10,000] will be applied to the entities’ first lodgement.

The additional payment [the second cash flow boost] will be applied to a limited number of activity statements.  Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.

Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020.  Each additional payment will be equal to half of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 lodgements.  Each additional payment will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

The anti-avoidance provision

Be aware that the cash boost legislation contains an anti-avoidance provision.  This states: “Neither the entity nor any associate or agent of the entity has entered into or carried out a scheme or part of a scheme for the sole or dominant purpose of achieving any of the following:

1. making the entity entitled to the cash flow boost for the period;
2. increasing the amount of the cash flow boost to which the entity is entitled (disregarding this paragraph) for the period.

Many taxpayers however may wonder about those owners of businesses (through trusts or otherwise) that don’t pay themselves a wage.  Instead they take trust distributions, receive dividends or simply draw on the profits of the business. As legislated, the cash flow boost is only available in respect of (broadly) employment related withholdings.  There may be a strong risk of falling foul of the anti-avoidance provision if someone who has not been paid salary or wages for a long period is now put on wages.

The ATO is very aware that there are schemes being entered into to take advantage of this handout, and we will let clients know if an announcement is subsequently made in this regard.

Superannuation contributions

Employers should note that there are no changes to the requirement to make superannuation contributions in accordance with the Superannuation Guarantee law.

Superannuation Guarantee Charge Amnesty

The SGC amnesty period started on 6 March 2020 and will conclude at midnight on 7 September.  No change has been made to this period.  It should be remembered that payments after 7 September 2020 in relation to the SGC amnesty will not be tax deductible.

Stimulus payments to households

Also provided for is the payment of the first economic support payment of $750 to Social Security and Veterans’ income support recipients, Farm Household Allowance recipients, Family Tax Benefit recipients and holders of a Pensioner Concession Card, Commonwealth Seniors Health Card or Commonwealth Gold Card.

There will also be a second economic support payment of $750 to the above people who receive a qualifying payment or hold a qualifying concession card on 10 July 2020. This second payment will not be paid to a person who receives, on 10 July 2020, the new Coronavirus supplement detailed below.

Additional supplement for income support recipients

The stimulus package also amends the Social Security legislation to provide financial assistance to people who are affected by the COVID-19 crisis. Australians can claim Jobseeker payment or Youth Allowance (other) if they are an Australian resident (or exempt from the residence requirements). If qualified, a person receives the current rate of Jobseeker payment or Youth Allowance (other) along with a fortnightly supplement of $550 or such other amount determined by legislation.

The supplement is also available to existing recipients of Jobseeker payment, Youth Allowance (other), Parenting Payment, Special Benefit, and the Farm Household Allowance. The Minister for Families and Social Services may extend the supplement to other social security payments by legislative instrument should a need arise.

The supplement is available for an initial six month period, although this may be extended depending on how the current crisis unfolds.

Recipients of Jobseeker payment or Youth Allowance (other) (which includes new and existing recipients) and Parenting Payment are also exempt from the assets test, liquid assets waiting period, ordinary waiting period, newly arrived resident’s waiting period and seasonal worker preclusion periods. The exemption from the newly arrived resident’s waiting period also applies to special benefit. The supplement and exemptions also apply to recipients of the Farm Household Allowance.

Note that the date of affect for these measures is 27 April.

Early release of superannuation

The stimulus legislation allows individuals affected by coronavirus to have up to $10,000 released from their superannuation or retirement savings account on compassionate grounds. Each person is permitted to have up to two releases – one for an application made during the 2019-20 financial year and another for an application made during the 2020-21 financial year. The amounts that are released are not subject to tax.

From mid-April 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 until 24 September 2020.

The legislation states that to apply for the determination for such early releases, the person must satisfy any one of the following requirements about their employment or business status.

At the time the person applies for the determination, they are:

• unemployed;
• eligible to receive a Jobseeker payment, Youth Allowance, Parenting Payment (which includes the single and partnered payments) or special benefit under the Social Security Act; or
• eligible to receive the Farm Household Allowance; or

On or after 1 January 2020 the person:

• was made redundant;
• their working hours were reduced by 20% or more; or
• if the person is a sole trader – their business was suspended or there was a reduction in their turnover of 20% or more.

Superannuation drawdowns

The bill amends the regulations to give effect to the Government’s announced measure to reduce the minimum payment amounts for account-based pensions (and for the equivalent annuity products) by half for the 2019-20 and 2020-21 financial years.

31 March 2020

The Federal Government has announced a further $130 billion to support the economy with the announcement of the JobKeeper Payment.

The JobKeeper Payment is to be paid to employers so they can pay their employees whether they have been stood down or continue to be engaged in the business.

Support Provided

• Employers can claim a fortnightly payment of $1,500 per employee which must be paid to the employee:

  • If the employee is paid less than $1,500 per fortnight the employer must top up the employee payment to $1,500 per fortnight

  • If the employee is paid greater than $1,500 per fortnight the employer will only be reimbursed $1,500 per fortnight

• The first payment is to be made through the ATO on 1 May 2020

• The payment will be back paid to cover employees’ wages from 30 March 2020

Eligibility

Employers

You will be able to show that your turnover will be reduced by more than 30 percent relative to a comparable period a year ago (of at least a month)

• The employee must have been employed as at 1 March 2020

Eligible Employees

• Must be a current employee – including those stood down or re-hired

• Were employed at 1 March 2020

• Are full-time, part-time, or a casual employee employed on a regular basis for longer than 12 months as at 1 March 2020

• Employees will not be required to go through Centrelink to continue to get support

Actions Required

• Register
  your interest in applying for the JobKeeper payment via https://www.ato.gov.au/Job-keeper-payment/

• Review
  and monitor turnover to ascertain if your turnover has decreased by 30% for a period

• Decide
  which of your employees including those already stood down are eligible for the JobKeeper Payment as they must receive a minimum $1,500 per fortnight before tax and payment must restart if they have been stood down.

• Assess
  the impact on cash flow as the wages will need to be paid in April before the first reimbursements will be paid from 1 May 2020

Businesses without employees

Businesses without employees (Self Employed) will also be able to claim the JobKeeper payment and they should also register their interest via ato.gov.au.

The information is provided on the basis of the information available at the time of writing and we will continue to review and advise on eligibility when the legislation is passed. Should you wish to discuss your eligibility for the support and the impact on your business please do not hesitate to contact us.

A link to the Government Fact Sheet providing more detail and examples is:
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_supporting_businesses_1.pdf