The government has released details regarding a $17.6 billion stimulus package in an attempt to correct the impact that the Coronavirus is already having and likely to have on the Australian economy. The idea of the stimulus package is to get more money circulating throughout our communities to assist businesses in continuing trade.
Scott Morrison also unveiled a $2.6 billion package to help Australia’s health system to respond to the global crisis.
What does it all mean?
Household Stimulus Details
A one off $750 payment will be made to all social security, veteran and other income support recipients and eligible concession card holders including Newstart, Commonwealth seniors health cards and families that receive family tax benefits. If you receive multiple payments, you will only receive one stimulus payment per recipient. Pensioners are expected to receive the most benefit from this part of the stimulus.
Payments are expected to be made starting 31st March 2020.
You will get the $750 Economic Support Payment if you get 1 of the following payments:
- Age Pension
- Disability Support Pension
- Carer Payment
- Carer Allowance
- Parenting Payment
- Wife Pension
- Widow B Pension
- ABSTUDY (Living Allowance)
- Austudy
- Bereavement Allowance
- Newstart Allowance
- Youth Allowance
- Partner Allowance
- Sickness Allowance
- Special Benefit
- Widow Allowance
- Farm Household Allowance
- Family Tax Benefit A
- Family Tax Benefit B
- Double Orphan Pension.
You’ll also get the payment if you have 1 of the following concession cards:
- Pensioner Concession Card
- Commonwealth Seniors Card
- DVA Gold Card.
You’ll also get the payment if you get 1 of the following Department of Veterans’ Affairs payments:
- Veterans Service Pension
- Veteran’s Income Support Supplement
- Veterans’ Compensation payments
- War Widow(er) Pension.
Please see the following page for more details on eligibility criteria:
https://www.servicesaustralia.gov.au/individuals/news/one-750-economic-support-payment
More Details on Assistance for households can be found here.
Key Points
- One off payments will be made to eligible concession card holders as outlined above
- One payment per recipient only
- Amount will be $750
- Payments expected from 31st March 2020
Business Related Stimulus Package Details
There are a number of different incentives that the government is introducing for businesses.
Instant Asset write off increase
The increase of the Instant Asset write off has increase by 500% from $30,000 to $150,000. The threshold has also changed for which businesses are eligible to take advantage for the Instant Asset write off. Businesses with a turnover of less than $500 million (currently $50 million) will be able to deduct half of the cost of eligible assets, with standard depreciation rules being applied to the other half. This will only be available until July 1st
Key points:
- Instant asset write off increased from $30,000 to $150,000
- Eligibility of the instant asset write off increased from $50 million to $500 million
- Increased Instant asset write off only available until July 1st 2020
Cash Flow Boost for Businesses with employees
Around 690,000 businesses will qualify to receive a payment equal to 50% of the tax due on their workers wages, each time they lodge their activity statement. This will be capped at $25,000 though. In March, this would be backdated to the previous 3 months.
The government has given an example of a business that reports withholding $13,806 in tax. For the March period they would receive 3 times 50% of this $12,806 amount. 3 x $6,903 = $20,709. The next period (April) they will receive the balance up to $25,000 being $4,291.
A minimum payment of $2,000 will be given to businesses that pay salary or wages even if they are not required to withhold tax.
Businesses with a turnover of up to $50 million that employ staff during the period between 1st January 2020 to 30th June 2020.
Key Points:
- Employers will receive a credit in their activity statement as a rebate for employees tax
- First credit will be give from 28th April 2020
- Minimum payment of $2,000 will be given to any business that pays salary or wages
- Grant will be capped at $25,000 per business
- 50% of the tax withheld on employees wages would be credited to the business
- The initial payment would be for 3 months to cover from 1st January 2020
- Businesses with a turnover of up to $50 million will be eligible for the grant
- Affects businesses that employ staff between 1st January 2020 to 30th June 2020
- Further details will be announced soon
Wage assistance for apprentices and trainees
The government will pay 50% of the wages to 120,000 apprentices, backdated to the 1st January, and dating right through to 30th September 2020. This is expected to cost the government up to $1.3 billion. This is open to businesses with fewer than 20 staff, but also allows larger businesses to access the grant if they employ an apprentice that has lost their job since March 1st.
Key Points
- Payment of 50% of apprentice and trainee wages to be paid to employers
- Will be backdated to 1st January 2020 and go through to 30th September
- Open to businesses will fewer than 20 staff
- Grant is also available for businesses of any size that employ an apprentice or trainee that lost their job since 1st March 2020
Casual Employees
Sickness payment will be on offer with the waiting payment being waived. These will be available for casual employees who have to self isolate, and the waiting period for these payments will be waived. The level of the payments will be of a new start level.
Key Points
- Sickness benefit available for casual employees that have to self isolate
- Waiting period will be waived
- Level of payments will be of a Newstart level
- Assets tests etc will apply to applicants