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JobKeeper 2.0 – The future of JobKeeper

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Between April to May 2020, JobKeeper was taken up by 920,000 organisations and around 3.5 million individuals – 30% of pre-Coronavirus private sector employment.

There have been a number of Government announcements on JobKeeper that impact on business and employee eligibility.

Employees that previously failed the JobKeeper eligibility test as they were not employed on 1 March 2020, may now be eligible for payments from 3 August 2020 if they were employed on 1 July 2020 (see Eligible employees in the report).

From 28 September 2020, employers seeking to claim JobKeeper payments will need to reassess their eligibility and prove an actual decline in turnover. From this date, the JobKeeper payment rate will reduce and split into a higher and lower rate based on the number of hours the employee worked in the 4 weeks prior to 1 March 2020 or 1 July 2020.

To access JobKeeper payments from 28 September 2020, there are two questions that need to be assessed:

  • Is my business eligible? And
  • What JobKeeper rate applies to my eligible employees?

We’ve summarised the key details for employers on JobKeeper 2.0 in this update, but just remember that the proposed changes are not yet law and the details could still change.

If you have any questions, contact us today.

 

Click the link below to download your copy of the JobKeeper update

JobKeeper 2.0 V2 – The Future of JobKeeper 07.08.2020



New $2.5bn JobTrainer package

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The Government has announced the $2.5bn JobTrainer package to retrain, upskill and open new job opportunities.

JobTrainer for job seekers and school leavers

The government hopes to create an additional 340,700 training places to provide no or low cost courses into sectors with job opportunities. The Government is working with the States and Territories to develop a list of qualifications and skill sets to be covered by the program, so watch this space…

JobTrainer for employers

The JobTrainer package has expanded the number of businesses that can access the existing 50% apprentice wage subsidy which will now be available until 31 March 2021.

Now, businesses with under 200 employees can access the subsidy for apprentices employed from 1 July 2020. Originally, only businesses with less than 20 employees or larger employers employing apprentices/trainees let go by a small business were able to access the subsidy (for wages paid to apprentices employed by them as at 1 March 2020).

Employers will be reimbursed 50% of an eligible apprentice’s wage up to a maximum of $7,000 per quarter per apprentice, after an assessment by the Australian Apprenticeship Support Network.

Eligibility

Small businessMedium Business
• Employ fewer than 20 people, or
• A small business with fewer than 20 people, using a Group Training Organisation, and
• the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020 for claims after this date. Claims prior to 1 July 2020, will continue to be based on the 1 March 2020 eligibility date.
• Employ 199 people or fewer, or
• A medium sized business with 199 people or fewer, using a Group Training Organisation, and
• the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020.
Claims open nowClaims open on 1 October 2020.

You will need to provide evidence of wages paid to the apprentice. If the business subsequently is unable to retain the apprentice, another business can access the incentive if they then employ and pay wages to the apprentice.

Final claims for payment must be lodged by 30 June 2021.

How does the apprenticeship subsidy and JobKeeper work together?

They don’t. It is one or the other.

An employer will not be eligible to claim the apprentice wage subsidy for any period where they choose to claim the JobKeeper payment for the same apprentice.

An employer or Group Training Organisation will not be eligible for the JobKeeper payment where the employer is in receipt of an Australian Government wage subsidy for the same Australian Apprentice (for example Supporting Apprentices and Trainees and the Australian Apprentice Wage Subsidy).



Home Office Deductions – What is actually allowed?

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If you performed some of your work from your home office during the 2020 financial year, you may be able to claim a deduction for the costs you incur in running your home office, even if the room is not set aside solely for work-related purposes 

COVID-19 IMPACT – NEW ARRANGEMENTS

The Australian Taxation Office (ATO) has announced special arrangements this year due to COVID-19 to make it easier for people to claim deductions for working from home. The new arrangement will allow people to claim a rate of 80 cents per hour for all their running expenses, rather than needing to calculate costs for specific running expenses.

Multiple people living in the same house can claim this new rate. For example, a couple living together could each individually claim the 80 cents per hour rate. The requirement to have a dedicated work from home area has also been removed.

This new shortcut arrangement does not prohibit people from making a working from home claim under existing arrangements, where you calculate all or part of your running expenses.

Claims for working from home expenses prior to 1 March 2020 cannot be calculated using the shortcut method, and must use the pre-existing working from home approach and requirements.

The ATO will review the special arrangement for the next financial year as the COVID-19 situation progresses.

WORKING FROM HOME CLAIMS FOR 1 MARCH TO 30 JUNE 2020

There are three ways that you can choose to calculate your additional running expenses for the 1 March – 30 June period:

  • claim a rate of 80 cents per work hour for all additional running expenses.
  • claim a rate of 52 cents per work hour for heating, cooling, lighting, cleaning and the decline in value of office furniture, plus calculate the work-related portion of your phone and internet expenses, computer consumables, stationery and the decline in value of a computer, laptop or similar device
  • claim the actual work-related portion of all your running expenses, which you need to calculate on a reasonable basis.

The ATO has stated that the three golden rules for deductions still apply. Taxpayers must have spent the money themselves and not have been reimbursed, the claim must be directly related to earning income, and there must be a record to substantiate the claim.

WORKING FROM HOME BEFORE 1 MARCH 2020

Claims for working from home expenses prior to 1 March 2020 should be calculated using the existing approaches and are subject to the existing requirements.

RUNNING EXPENSES

A deduction can be claimed for home office running expenses comprising of electricity, gas and depreciation of office furniture (e.g. desk, tables, chairs, cabinets, shelves, professional library) in the amount of:

  • The actual expenses incurred; or
  • 52 cents per hour

Like making a motor vehicle claim, diary/logbook evidence should be maintained for a 4-week period to establish a pattern of working from home and justify the number of hours you are claiming.

No deduction is allowed where no additional costs are incurred e.g. you work in a room where others are watching TV, or the income producing use of the home is incidental e.g. 52c per hour would not be allowed for a fax machine permanently left on to receive documents.

You will need receipts for:

  • home office equipment used for work purposes
  • repairs relating specifically to the home office or furniture and equipment used for work purposes
  • cleaning expenses of home office
  • any other day-to-day running expenses for the home office
  • diary entries to record your small expenses ($10 or less) totalling no more than $200

TELEPHONE (INC. MOBILES) + INTERNET COSTS

If work or business calls can be identified from an itemised telephone account, then the deduction can be claimed for the work or business-related portion of the telephone account. A representative four-week period will be accepted as establishing a pattern of internet and telephone use for the entire year.

Telephone rental expense may be partly deductible if you are “on call” or required to contact your employer or client on a regular basis.

DEPRECIATION ON EQUIPMENT

Depreciation on home office equipment including office furniture, carpets, computer, printer, photocopier, scanners, modem etc. used only partly for work or business purposes can be apportioned.

The claim is based on a diary record of the income related and non-income related use covering a representative four-week period.  The diary needs to show:

  • The nature of each use of the equipment
  • Whether that use was for an income producing or non-income producing purpose
  • The period for which is was used

OCCUPANCY EXPENSES

Claims for occupancy expenses are allowed only if the home is used as a place of business. Occupancy expenses include rent, mortgage interest, water rates, repairs, house insurance premiums.

The claim can be made as an apportionment of total expenses incurred on a floor area basis.

Warning: Being able to claim theses expenses may affect your ‘main residence exemption’ for capital gains tax purposes if you sell your house in the future.

WHEN IS A HOME A PLACE OF BUSINESS?

The following factors, none of which is necessarily conclusive on its own, may indicate whether, or not, an area set aside has the characteristics of a place of business:

  • the area is clearly identifiable as a place of business
  • the area is not readily suitable or adaptable for use for private or domestic purposes in association with the home generally
  • the area is used exclusively, or almost exclusively, for carrying on a business, or
  • the area is used regularly for client or customer visits.

If you use your home to carry out income producing activities as a matter of convenience, you are not entitled to a deduction for occupancy expenses. It would be rare for an employee to be able to claim occupancy expenses.

WHAT NEXT

For further information, please contact our office.



JobKeeper Application Process

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We know that you are all experiencing information overload at the moment, but we do feel it’s important to let you know that the time frame for the JobKeeper application is short, and if you are intending to apply for it you need to start taking action now. To get started, we have prepared a Questionnaire that will help to determine your eligibility, please click the link to complete this form, or for further information please continue reading.

Click Here to Start your JobKeeper Questionnaire

VALUE TO YOU OF JOBKEEPER

If you are eligible to receive the JobKeeper payment for all your eligible employees for the entire 6 month period, this scheme could be of huge assistance to you and your business during these difficult times.

As an example, an eligible sole director business with three eligible employees, could stand to get up to $78,000 from the government during the next six months to see them through this challenging time. 

JOBKEEPER PAYMENT OVERVIEW

JobKeeper is a Federal Government subsidy paid to eligible businesses effected by COVID-19 to cover the costs of their employee’s wages.

Affected employers will be able to claim a fortnightly subsidy payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.

This full amount of $1,500 must then be paid to all eligible employees, whether they are full time, part time or long-term casuals. Here is a brief summary of how the JobKeeper payments are made:
• They are paid by the ATO within 14 days of month end.
• The first payment will be starting in the first week of May 2020.
• The eligible payroll periods are every 14 days, commencing 30 March 2020.
• Monthly employer payroll reporting is required to trigger the payment by the ATO – using Single Touch Payroll (STP)

The employer will continue to receive the subsidy payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the business.

Business Participation Entitlement

Sole traders and some other entities (such as partnerships, trusts or companies) may be entitled to the JobKeeper Payment scheme under the business participation entitlement. A limit applies of one $1,500 JobKeeper payment per fortnight for one eligible business participant. Sole traders, one partner in a partnership, one beneficiary of a trust, and one director or shareholder of a company may be regarded as an eligible business participant.

Important Dates

There are a number of moving parts with JobKeeper, below is a summary of the Key dates for lodgements with the ATO

  • 20 April – enrolments open for JobKeeper with ATO
  • 26 April – enrolment deadline for employers for April
  • 30 April – check minimum $3,000 paid to all eligible employees
  • 30 April – eligible employee forms are all on file
  • 4 May – confirm eligible employees and complete application with ATO
  • 7 May – report monthly GST turnover & confirm eligible employees
  • 7 June – report monthly GST turnover & confirm eligible employees >
  • 7 July – report monthly GST turnover & confirm eligible employees
  • 7 August – report monthly GST turnover & confirm eligible employees
  • 7 September – report monthly GST turnover & confirm eligible employees
  • 7 October – report monthly GST turnover & confirm eligible employees

OBLIGATIONS + RISKS FOR YOU

If a wrong claim is made or if the ATO in the future decides that you were ineligible to receive the JobKeeper payment, the ATO will require you to repay them any JobKeeper payments that you have received plus penalties and interest. The key risks to you as the employer include:

  1. The employer certifies the facts provided to the ATO and the JobKeeper claim made.
  2. The employer receives significant JobKeeper payments over a 6 month period. For example, an employer with 10 employees would receive $195,000, and an employer with 20 employees would receive $390,000.
  3. If the employer makes a mistake and is found to be ineligible by the ATO (for example, its turnover is not down by 30%), then they may have to repay all amounts received back to the ATO.
  4. An employee ceases to be eligible if they cease employment during the life of this JobKeeper scheme. Also, the ATO requires you to keep all records in relation to your JobKeeper claim for a 5 year period.

As outlined earlier, if you would like assistance with this process we have prepared a Questionnaire that will help to determine your eligibility. It will also help us to determine those clients that require assistance with the application process in a timely and efficient manner.

Click Here to Start your JobKeeper Questionnaire

If you want to discuss this please call our office on 08 6118 6111.

 



$1,500 JobKeeper subsidy to keep staff employed

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A subsidy of $1,500 per fortnight per employee, administered by the ATO, will be paid to businesses that have experienced a downturn of more than 30% (50% for businesses over $1bn).

To be a part of the subsidy, employers will need to ensure that their employees receive at least $1,500 per fortnight (before tax).

JobKeeper subsidy basic criteria
DateFrom 30 March 2020 for six months
For employees employed at and from 1 March 2020
First payments in first week of May 2020
Eligibility to be reassessed each month
Applies toBased on comparable periods:
- Employers <$1 bn that have experienced a downturn of more than 30%
- Employers >$1bn that have experienced a downturn of more than 50%

♦♦♦Note:  This is our current understanding of JobKeeper subsidy as at 31 March 2020.  The relevant legislation has not been passed yet and may be subject to change.♦♦♦

Eligibility

There are two levels of eligibility; for employers and employees.

Eligible employers are those with:

  • Turnover below $1bn that have experienced a reduction in turnover of more than 30% relative to a comparable period 12 months ago (of at least a month); or
  • Turnover of $1bn or more that have experienced a reduction in turnover of more than 50% relative to a comparable period 12 months ago (of at least a month); and
  • Are not subject to the Major Bank Levy.

Sole traders and the self-employed with an ABN, and not-for-profits (including charities) that meet the turnover tests are eligible for the JobKeeper payment.

Eligible employees are those who:

  • Were employed by the relevant employer at 1 March 2020; and
  • Are currently employed by the employer (including those who have been stood down or re-hired); and
  • Are full time, part-time, or long term casuals (a casual employee employed on a regular basis for 12 months as at 1 March); and
  • Are at least 16 years of age; and
  • Are an Australian citizen, hold a permanent visa, are a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
  • Are not in receipt of a JobKeeper Payment from another employer.

While it appears that businesses without employees can potentially qualify for JobKeeper Payments, it is not clear at this stage what conditions will need to be satisfied.

How the support is calculated

The ATO will administer this program and will make the $1,500 payments based on payroll information. The payments will be made monthly in arrears, so it is essential that you ensure your business and your employees continually meet the eligibility criteria.

The business will continue to receive the payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the relevant employer.

How the support is provided

To access the JobKeeper subsidy, you should call us to assist you with the registration process and calculations.

If you want to manage the process yourself, you must:

  • Register
    • Applications are not yet open. However, you should register your intent to apply for the JobKeeper subsidy with the ATO (here). The ATO will provide you with regular updates and advise you when you can lodge your application
  • Assess turnover
    • Ensure you have an accurate record of your revenue for the 2018-19 income year and for the 2019-20 year to date
    • Ensure you keep an accurate record of revenue from March 2020 onwards
    • Compare your revenue for the whole of March 2019 with the whole of March 2020
    • Measure the % decline in your revenue and ensure it has declined by more than 30%
    • If you are not eligible in March, you may become eligible in another month
  • Identify eligible employees
    • Nominate the employees eligible for the JobKeeper payments – you will need to provide this information to the ATO and keep that information up to date each month. The ATO will use Single Touch Payroll to prepopulate the information in most cases.
    • Notify all eligible employees that they are receiving a JobKeeper payment. Employees can only be registered with one employer.
    • Pay eligible employees at least $1,500 per fortnight (before tax). If an employee normally receives $1,500 or more per fortnight before tax the employee should continue to receive their regular income. Note: It is unclear at this stage if the employer must continue to pay their employee the same salary if it was more than the subsidy amount.
    • Pay superannuation guarantee on normal salary and wages amounts paid to employees. If the employee normally receives less than $1,500 per fortnight before tax, the employer can decide whether to pay superannuation on the additional amount that is paid as a result of the JobKeeper program.

Sole traders and the self-employed can register their interest in applying for the JobKeeper payment with the ATO. These businesses will need to provide an ABN for the business, nominate an individual to receive the payment, provide the individual’s TFN and declare their continued eligibility for the payments. Payments will be monthly to the individual’s bank account.

Example

Adam owns a real estate business with two employees. The business is still operating at this stage but Adam expects that turnover will decline by more than 30% in in the coming months. The employees are:

EmployeeEmployment TypeSalary per fortnight (before tax)
AnneFull-time$3,000
NickPart-time$1,000

Both Anne and Nick are still working in the business.

Adam registers his interest in the JobKeeper scheme (from 30 March 2020), then applies to the ATO providing details of his eligible employees. Adam also advises Anne and Nick that he has nominated them as eligible employees to receive the payment. Adam will provide information to the ATO on a monthly basis and receive the payment monthly in arrears.

Adam’s business is eligible to receive the JobKeeper Payment for each employee.

For Anne, the business will:

  • Continue to pay Anne her full-time salary of $3,000 per fortnight before tax,
  • Receive $1,500 per fortnight from the JobKeeper Payment
  • Pay superannuation guarantee on Anne’s salary

For Nick, the business will:

  • Continue to pay Nick $1,000 per fortnight before tax salary
  • Pay Nick an additional $500 per fortnight before tax (totalling $1,500)
  • Receive $1,500 per fortnight from the JobKeeper Payment
  • Pay superannuation guarantee on Nick’s wage of $1,000 per fortnight (but can choose to pay SG on the full $1,500)

Adapted from Treasury fact sheet: JobKeeper payment — information for employers

Next Steps

Like everything surrounding Covid19, the changes are fast-paced.  With a number of measures already introduced, it is becoming increasingly complex.

If you have any questions about how the various Government Packages may assist you or your business, please contact us at Prescott Business Solutions on 08 6118 6111 or hello@prescottsolutions.com.au

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Business Continuity and Tax Planning

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In the coming weeks and months many businesses will be entering survival mode. In addition to this, many individuals may be out of employment, either through redundancy or being temporarily stood down. The recent government announcements will provide some relief to those whose cashflow has been significantly impacted by the changing economic environment.

 

We have been in contact with many businesses in the past fortnight concerned about how their business will endure during the coming months. The key questions unsurprisingly are regarding accessing government assistance and cashflow. So, in case you missed it, for details on the government stimulus package and a number of useful links we have updated our website, facebook page and LinkedIn.

Business Continuity Plan

For those that want to know how they will be impacted, we feel that it would be of benefit to many businesses to have a plan which addresses the following key areas:

  1. Cash Flow
  2. Protection of your Assets – including personal assets like your family home.
  3. Banks and Funding
  4. Management Team planning
  5. Your Employees
  6. Customers & Suppliers

The business continuity plan would involve:

  • Initial discussion and fact-find, during which we would discuss all the elements above.
  • Preparation of a tailored business continuity plan.
  • A subsequent meeting to review the plan and action items.

If you feel that this may be of value to your business, please contact us as soon as possible.

Tax Planning

During this part of the financial year we are preparing forecasts and tax plans for a number of clients. Now, more than ever, tax planning is critical to know your PAYG obligations and credits, to determine access to grants and to be able to ‘stress-test’ your forecast profitability in the downturn. Some factors to consider and action between 31 March to 30 June 2020 as part of your planning for the 2020 financial year could include:

  • Pay employee superannuation obligations
      • earlier rather than later to ensure sufficient cash is available
  • March BAS lodgement
      • critical if anticipating receipt of the tax free payments for eligible employers, refer to our blog for further information on this.
  • Instant asset write-off purchases
      • the latest stimulus package is generous in terms of immediate deductions
  • Trust Distribution Resolutions
      • these need to be prepared prior to 30 June to be able to distribute tax-effectively
  • Superannuation deductions
      • Pay prior to 30 June
  • Review inventory
      • do you have enough to get you through the coming months, or will you need to invest? 
  • Fringe Benefit Tax return
      • Many businesses provide vehicles, meals and entertainment to their clients as incentives and remuneration. This will often be appreciated by employees and clients more than the equivalent cash, but as it is a ‘benefit’, it can result in fringe benefits tax.

If you would like to discuss tax planning for your business, or for yourself, please contact us as soon as possible – the end of financial year is fast approaching!

We are here to discuss your tax and cashflow planning strategies, so please contact Shannon or Jessica on 08 6118 6111, or email hello@prescottsolutions.com.au

 



2020 Economic Response to the Coronavirus Update

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In an announcement on 22 March 2020, the Federal Government has released a second set of measures described as an economic response to the deteriorating outlook due to the Covid-19 virus. This announcement is in addition to the announcement made on the 12th March and is an extension of those initial announcements – combined with our previous actions, bringing to the total to $189 billion, representing 9.7 per cent of annual GDP.

A summary of the key measures are below.

 

Boosting Cash Flow For Employers

The Government is providing up to $100,000 for eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000.

The Tax Free Payments will be made between April and October 2020, with the first payment after the lodgement of the March BAS. Here’s how will it work;

Quarterly lodgers

For the March and June BAS, you will receive 100% of the PAYG Withheld, up to a maximum of $50,000.  Each employer will receive a minimum of $10,000 irrespective of their PAYG withholding amount.

An additional payment equal to the total amount withheld as calculated above, will be paid in two equal instalments in July and October.

Monthly Lodgers

For the March monthly BAS, you will receive 300% of the PAYG withholding up to a maximum of $50,000. Each employer will receive a minimum of $10,000 irrespective of their PAYG withholding amount.

For the April, May & June BAS, you will continue to receive 100% of the Tax Withheld, up to a total of $50,000.

An additional payment equal to the total amount withheld as calculated above, will be paid in four equal instalments in July, August, September and October.

Eligibility Criteria

  • Turnover under $50 million and that employ workers are eligible.
  • The payments will be based on the tax that employers withhold on behalf of their employees and remit to the ATO as PAYG (W).
  • The ATO will deliver the payment as a credit to the entity upon lodgment of their activity statements.
  • If this places the entity in a refund position, the ATO will deliver the refund within 14 days.
  • The payments will only be available to active eligible employers established prior to 12 March 2020

Important: The assistance will only apply to the Tax Withholding. Superannuation still needs to be paid within 28 days after the end of each quarter

 

Our good friends at Digit Business have built a great tool to estimate the credit available.  Check it out here – PAYG Cashflow Boost Calculator

Supporting apprentices and trainees

The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for 9 months from 1 January 2020 to 30 September 2020.

Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer that employs that apprentice. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).

Eligibility Criteria

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 at 1 March 2020.

Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy.

Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.

Accelerated Depreciation

  • The Instant asset threshold will increase from $30,000 to $150,000 for equipment purchases such as Truck, Machinery purchased up until 30 June 2020 and can be new or used equipment
  • Businesses will be able to deduct 50% of the asset cost in the year of purchase, with the balance being depreciated as normal. This will apply for equipment purchases up until 30 June 2021 and is only for NEW equipment

Both these measures start 12 March 2020 for Businesses with a turnover of less than $500 million.

Temporary Relief for financially distressed businesses

The Government is temporarily increasing the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.

Not responding to a demand within the specified time creates a presumption that the company is insolvent. The statutory timeframe for a company to respond to a statutory demand will be extended temporarily from 21 days to six months. This will apply for six months.

For owners or directors of a business that are currently struggling due to the Coronavirus, the ATO will tailor solutions for their circumstances, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

If you are concerned about your cashflow, please contact our office immediately to discuss further options

Supporting the Flow of Credit

The Government will provide a guarantee of 50% to small business lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in small businesses being able to access additional funding to help support them through the upcoming months.

The Government will provide eligible lenders with a guarantee for loans with the following terms:

  • Maximum total size of loans of $250,000 per borrower.
  • The loans will be up to three years, with an initial six month repayment holiday.
  • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Most banks are also providing options to ‘pause’ mortgage repayments on Home Loans to assist with cashflow.

Update: The Banks have started rolling out their packages for Small Business Loans.  Here are some links for more information;

 

Supporting Individuals and Households

Income support for individuals

Existing and new recipients of the following Centrelink payments will receive an additional $550 per fortnight to supplement their payments:

  • Job Seeker Payment
  • Youth Allowance Jobseeker
  • Parenting Payment
  • Farm Household Allowance;
  • Special Benefit

Income support recipients could benefit from:

  • A reduction in social support deeming rates, and/or;
  • Two separate $750 payments made in March and July this year

 

Temporary early release of superannuation

Individuals such as casual workers and sole traders whose income is adversely affected by 20% or more due to the coronavirus pandemic will be able to access up to $10,000 by 30 June 2020 from their superannuation fund. This due to a temporary change to the release conditions allowing these ‘early release’ payments, and an additional $10,000 in the next financial year.

Eligibility

To apply for early release you must satisfy any one or more of 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
  • on or after 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.

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.

Next steps

With the economic uncertainty and a range of new benefits available, being proactive and planning now could make a big difference to your business.  Be open, and speak to your team regularly about what would happen if your business needs to close due to Coronavirus/ Covid-19.  Above all, support each other as much as possible – we are all in this together.

For further information about how the new measures may assist you or your business, please contact us at Prescott Business Solutions on 08 6118 6111 or hello@prescottsolutions.com.au.

 

More Information



2020 Economic Stimulus Package

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A second stimulus package was announced on 22 March 2020, for the latest details please click here 

 

With Corona Virus having an unprecedent impact on the global economy, today the Australian Government announced a $17.6 billion economic plan to support business and the Australian economy.

Here’s a snapshot of how it will help you and your business

Accelerated Depreciation

  • The Instant asset threshold will increase from $30,000 to $150,000 for equipment purchases such as Truck, Machinery purchased up until 30 June 2020
  • Businesses will be able to deduct an additional 50 per cent of the asset cost in the year of purchase.  This will apply for equipment purchases up until 30 June 2021

Both these measures start 12 March 2020 for Businesses with a turnover of less than $500 million.

Cash flow assistance for businesses

  • There will be a Cash Flow Boost for Employers with up to $25,000 (minimum payment of $2,000) for eligible small and medium-sized businesses.
    • The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free.
    • Businesses will receive payments of 50 per cent of their PAYG Withholding (tax on wages) on the Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.
  • For small businesses with apprentices and trainees, eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.

Stimulus payments to households to support growth

  • A one-off $750 stimulus payment for pensioners, social security, veteran and other income support recipients and eligible concession card holders.  The payment will be tax free and will not count as income for Social Security, Farm Household Allowance and Veteran payments. There will be one payment per eligible recipient. If a person qualifies for the one off payment in multiple ways, they will only receive one payment.

Payments will be from 31 March 2020 on a progressive basis, with over 90 per cent of payments expected to be made by mid-April.

Assistance for severely-affected regions

  • $1 billion to support those sectors, regions and communities that have been disproportionately affected by the economic impacts of the Coronavirus, including those heavily reliant on industries such as tourism, agriculture and education.

 

These changes have not been legislated yet, and we expect to have more information about the finer details in the coming weeks.

To discuss how these announcements will affect your business, please contact our office.

 

More information



Managing your business cash flow over the holiday period

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December is usually the busiest time of the year for retail and hospitality businesses. But businesses in other sectors often find that their sales slowdown and their customers stop paying them for a few months. So cash flow dries up.

Whether your business is large or small, well-established or in start-up mode, you need to take a planned approach to managing cashflow during the holiday season. Here are few tips for keeping on top of cashflow management during the Christmas/New Year holiday period.

Keep Invoicing In The Lead Up To Christmas

Don’t let your business admin slip in the rushed lead-up to Christmas. This is the most important time of the year to stay on top of your invoicing. You may find that many customers will be slow to pay because their businesses are closed over the Christmas period.

Set Clear Expectations With Your Customers

Be clear with your customers that you expect them to pay within the pre-arranged credit terms over the Christmas period. Phone regular slow payers a few days before payment is due to confirm that they’ll be paying on time. The phone is always a more effective method than email. If you’re not comfortable having this conversation with your customers, your accountant or bookkeeper may be able to assist.

Service Business – Offer A Discount For The “Quiet Time”

If your business is usually quiet in January, why not offer your clients a 10% discount if they book you in for January? Why not offer them a 15% discount if they also refer a neighbour or a friend? Set whatever discount amounts work for you. This is the thing: A strategy like this will keep your business busy and some cash coming through during the usually quiet period.

Use The Quiet Time To Work On YOUR Business

If sales are a little slow in the lead-up to Christmas, use the time wisely to hit the ground running in the new year.

The pre-Christmas slowdown is a great time to work through the to-do list you’ve been compiling all year. This might include taking a thorough inventory, searching for more suitable lending alternatives, completing a comprehensive competitor analysis or researching the market for new products and suppliers.

Want To Talk?

Feel free to contact our office anytime by phone or email – We can’t wait to provide you with better advice now for a beautiful future!



Why the Government does not want your business accepting cash payments of $10,000 or more

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From 1 January 2020, the Government intends to restrict the value of cash payments a business makes or accepts to amounts under $10,000. Ignoring the limit will become a criminal offence with penalties of up to 2 years in prison and/ or $25,200*.

Payments of $10,000 or more will need to be made electronically or by cheque.

We’ll, easy enough you say, just break it up into smaller amounts! But, the law has already thought of that. The cash payment limit will apply to the total price of a single supply of goods or services, regardless of whether the price is split into a series of payments over time. If a customer is making cash payments over time, for example instalment payments on a car, the total cash component cannot equal or exceed $10,000 – payments above this amount will need to be made using alternative payment methods.

If a genuine mistake has been made, you will need to be able to prove that you, “reasonably believed that a payment did not include an amount of cash that was equal to or exceeded the cash payment limit.” Making a mistake does not stop the breach being an offence, it merely limits the fault element. Recklessness is not a genuine mistake.

Why the change?

The cash limit initiative came out of the Black Economy Taskforce and targets untraceable payments. The concern with large cash payments is that cash can be anonymous and untraceable. Making payments in cash makes it easier for businesses to underreport income, and to offer consumers discounts for transactions that reflect avoided obligations, gaining a competitive advantage over businesses that either cannot or will not offer such discounts. In other words, under the counter deals.

Interaction with AUSTRAC reporting entities

Dovetailing into the new cash payments limits are changes to AUSTRAC reporting. At present, financial services, trading in bullion, and gambling services generally need to report to AUSTRAC for transfers of physical or digital currency of $10,000 or more.

From 1 January 2021, certain AUSTRAC reporting entities will not be required to report physical cash transactions of $10,000 or more as they will be unable to make or accept them.

The cash payments reform was originally announced in the 2018-19 Federal Budget and were due to commence from 1 July 2019 but pushed back to 1 January 2020. The reforms are not yet law and are currently before Parliament.

*120 penalty units for individuals. Entities face 300 penalty units per offence (currently $63,000).