What a difference a week makes!
Since the initial economic stimulus response announced last Thursday, 12 March, the government has announced extra support to combat the economic consequences of the increased social distancing rules.
It is going to be a rough ride for all of us SMEs, so Clear Path Accounting will be working overtime to ensure that we are supporting all of our clients. Whether it be re-assessing your costs, discussing strategies to smooth cashflow, revising your forecasts, developing a business continuity plan, or just assisting you with some decision-making, we will be here.
For every business client, we will be working through the various state and federal government stimulus offerings to ensure that you are getting the maximum available support you are entitled to. We will be in contact very soon to discuss how much of the $66 billion package you are actually entitled to.
So, the first step is to provide an overview of what has been announced for your business.
Up to $100,000 for eligible small businesses
This is an upgrade of the previously announced $25k PAYGW payment. The government will now match the PAYGW amounts lodged in the March 2020 & June 2020 BAS, to a maximum of $50k. In addition, the minimum payment is being increased from $2k to $10k. Then for the July to October 2020 period, eligible entities will reiceve another boost equal to the amount they received in the March & June quarters. This means that eligible employers will recieve at least $20k to a total of $100k, under both payments.
They have also said that these payments will only be available to active eligible employers established prior to 12 March 2020. Your turnover must be less than $50m to be eligible and you simply need to have employees for whom you withhold tax on wage payments.
Apprentices and Trainees
The government is going to subsidise 50% of the apprentice or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020, up to $21,000 per eligible apprentice or trainee. It will be capped at $7,000 per quarter.
The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as of 1 March 2020.
You will be required to have an eligibility assessment undertaken by an
Employers can register for the subsidy from early April 2020. Final claims for payment must be lodged by 31 December 2020.
Further information is available at:
- The Department of Education, Skills and Employment website at: www.dese.gov.au
- Australian Apprenticeships website at: www.australianapprenticeships.gov.au
SME Lending Guarantee
The federal government will provide a guarantee of 50% to SME lenders for new unsecured 3 year loans of up to $250k per borrower to be used for working capital. These loans will also have an initial 6 month repayment holiday.
Loans will be subject to lenders’ credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions
The Scheme will commence by early April 2020 and be available for new loans made by participating lenders until 30 September 2020.
Other measures announced
- Increase in the threshold for creditors to issue statutory demands from $2k to $20k for the next 6 months.
- Increase in the threshold for initiating bankruptcy proceedings from $5k to $20k for the next 6 months.
- Plus an increase in timeframe whereby you are required to respond to a bankruptcy notice or a statutory demand from 21 days to 6 months.
- Directors will be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business. Egregious cases of dishonesty and fraud will still be subject to criminal penalties
- 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.
- To apply you must satisfy on or more of the following:
- You are unemployed; or
- your working hours were reduced by 20 per cent or more; or
- if you are a sole trader — your business was suspended or there was a reduction in your turnover of 20 per cent or more.
- No tax will be payable on these amounts
- You can apply directly to the ATO through the myGov website: www.my.gov.au
We will continue to monitor the announcements from state and federal governments and communicate with you to keep the information as relevant as possible.
Should you have any questions or you would like to discuss your situation further, please contact us at any time. We are here to support you in every way that we can, not only for your buisness, but for you personally. We understand the emotional strain that this can have.
In saying that, we will be offering free online group sessions for those who are interested. This will help us provide you with critical updates, ongoing support, as well as providing you with a platform to communicate with other business owners going through similar challenges. By coming together, we can all provide mutual support and take steps necessary to make positive changes during these unprecidented times.