Protecting Your Business During A Crisis

insolvencyCOVID-19

What Government Assistance Is Available

Claiming more than just lives, COVID-19 has seen the collapse of thousands of businesses and has left countless individuals out of work and without reliable income.

With no end in sight to the crippling economic crisis the Coronavirus has created, business owners are left wondering what they can do to keep their head above water and keep their business afloat.

Help is in reach!

The Federal Government is rolling out a series of measures to support small and medium businesses who are suffering financially due to the Coronavirus.

Keep reading to see what financial support your business may be eligible for:

Cash Flow Assistance For Small & Medium Businesses

This assistance aims to support businesses suffering the economic impacts of the Coronavirus to manage their cash flow, retain their employees and keep their business afloat.

Small and medium businesses are eligible to receive between $2,000 – $25,000 to help cover the cost of employee salaries and wages.

This measure is estimated to benefit around 690,000 businesses and approximately 7.8 million employees.

Who is eligible?

Businesses that employ workers and have an annual turnover of less than $50 million will be eligible. Eligibility will generally be based on the turnover of the previous year.

Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25,000.

Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.

When will it be recieved?

This payment will be delivered by the Australian Taxation Office as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.

This payment will be tax free.

Supporting Apprentices & Trainees

In an effort to retain apprentices and trainees, the Federal Government is offering a wage subsidy for eligible businesses to help cover the cost of employment for trainees.

This measure aims to support approximately 70,000 small businesses, employing around 117,000 apprentices.

Who is eligible?

This payment is available to small businesses with fewer than 20 full-time employees who employ a trainee or an apprentice. The apprentice or trainee must have been employed as of 1 March 2020.

Eligible employers can apply for a wage subsidy of 50% of their trainee or apprenice’s wage during the period of 1 January 2020 and 30 September 2020.

Payment will be reimbursed at a maximum of $21,000 per eligible apprentice or trainee.

When can I apply?

Employers can register for the subsidy from early April 2020. Claims must be lodged no later than 31 December 2020.

For further information on how to apply, including further information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.

Increased Asset Write-Off Threshold

The instant asset threshold has been increased to $150,000 (previously $30,000) and has expanded access to include businesses with an annual turnover of under $500 million (previously $50 million).

Who is eligible?

Businesses with an annual turnover of less than $500 million are eligible.

The Increased Asset Write-Off Threshold is due to return to $1,000 for small businesses (turnover less than $10 million) from 1 July 2020.

When will it be recieved?

This measure applies from 12 March 2020 until 30 June 2020, for new or second‑hand assets first used or installed in this timeframe. A new legislation is due to be passed which will allow these changes to take effect.

This payment is generally claimed back via your business tax return.

Backing Business Investment

The Government is introducing a 15-month investment incentive to support business investment and economic growth over the short term by accelerating depreciation deductions.

This aims to support over 3.5 million businesses, employing more than 9.7 million people.

Who is eligible?

Businesses with a turnover of less than $500 million will be able to deduct 50% of the cost of an eligible asset on installation. Existing depreciation rules will apply to the balance of the asset’s cost.

What is the eligible time period?

Assets acquired from 12 March 2020 and first used or installed by 30 June 2021 will be eligible.

Job Keeper Payment

This financial aid was designed to provide temporary financial support for businesses affected by the Coronavirus. Eligible employers can receive a payment of $1,500 per fortnight for each eligible employee for a period of 6 months.

Who is eligible?

Businesses with a turnover of less than $1 billion who have had their turnover reduced by more than 30% compared to last financial year will be eligible. Businesses with a turnover of more than $1 billion must have had their turnover reduced by at least 50% to be eligible.

For employees to be eligible they must be aged over 16 and must have been employed on 1 March 2020. They must be either full-time, part-time or long-term casuals for a period of at least 12 months. This payment is also available to eligible employees that have been let go and re-hired during the pandemic.

When will it be recieved?

The first Job Keeper payment was made in the first week of May. Payment is backdated to 30 March. Subsequent payments will be completed in the months following your claim.

COVID Safe Harbour

This relief aims to provide further relief to financially distressed businesses and directors of companies facing insolvency.

Who is eligible?

To be eligible, a company director facing insolvency must be able to prove that any debts incurred are necessary to facilitate the continuation of the business during the 6 month period commencing 25 March 2020. This includes any debts incurred as a result of continuing to pay employees during the pandemic and any cost incurred to move business operations online.

For further information regarding COVID-19 Safe Harbour, click here.

These measures aim to help businesses withstand and recover from the economic impact of the Coronavirus.

To find out more about these measures and check eligibility, visit here.

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