On Sunday 22nd March the Federal Government announced a second round of support to individuals and businesses as a result of the Covid-19 Pandemic. The following is a summary of the measures as they relate to individuals, sole traders and partnerships:
Individuals who receive support payments (Jobseeker Allowance, Youth Allowance, Parenting Payment, Farm Household Allowance) will be eligible for an additional $550 per fortnight supplement commencing 27th April for the following six months. This supplement will also be available to employees stood down from employment, sole traders, self employed, casual and contract workers. Asset testing and waiting periods have been waived but income tests still apply.
The previously announced $750 payment to social security, veteran and other income support recipients has now been doubled. A second payment of $750 will now be made to eligible people from 10 July 2020. Only those who do not receive the $550/fortnight Coronavirus supplement will receive this second $750.
Eligible people will be able to make an early withdrawal from their superannuation over the next two years. Up to $10,000 before 1 July 2020 and up to another $10,000 for the year before 1 July 2021. These withdrawals will be tax free. To be eligible you must be; unemployed, or eligible to receive certain government support payments, or your working hours have been reduced by 20%, or a sole trader who has suspended their business or had a reduction in turnover of 20% or more.
As happened during the GFC, the government has halved the minimum percentages that pensioners must draw from their superannuation for the 2019-2020 and 2020-2021 financial years. Deeming rates have also been further reduced as a result of the RBA cutting official interest rates.
The boosting cash flow measure has been increased. Employers will now receive 100% of their PAYG withholding back to a maximum of $50,000 (up from 50% previously announced) with the minimum payment increased from $2,000 to $20,000. This will be based on your March BAS. Now a second payment will also be made calculated from June 2020 and September 2020 BAS’s. This measure is now also available to not-for-profit organisations that have employees.
GQ Tax 