This is a difficult time for many SMEs (small and medium sized businesses), with recent events leading to economic and personal challenges for many small businesses.
We have developed this page to keep small businesses informed about the impacts of COVID-19 on businesses in Australia, and the assistance options in place to support you.
We will be regularly updating this content to keep you informed of the latest information.
Cash Flow Support
Boosting Cash Flow for Employers
What is it?
Eligible businesses that withhold their employees’ tax to the ATO will receive a payment equal to 100% of the amount withheld between March and June 2020, up to a maximum payment of $50,000, with a minimum payment 10,000.
There is also an additional payment of up to $50,000, with a minimum of $10,000. To qualify for the additional payment, the entity must continue to be active for the periods June to September 2020.
Eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.
How does it work?
The ATO will deliver the payment as a credit to your business upon lodgment of your activity statements.
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Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.
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Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and June 2020 lodgments. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300 per cent) in the March 2020 activity statement.
Where the credit places the business in a refund position, the ATO will deliver the refund within 14 days. The minimum payment will be applied to the entities’ first lodgment.
Eligible entities who received initial cash flow boosts will receive additional payments, for the periods June to September 2020, equal to the total amount of initial cash flow boosts received. This will be delivered in either two or four instalments depending on your reporting period.
Amount:
Between $20,000 and $100,000 under both payments.
When will it be received?
Initial payments between 28 April and 28 July 2020. Additional payments between July and October 2020.
Who is eligible?
- SMEs and not-for-profits (including charities) that employ workers.
- With an aggregated annual turnover under $50 million (based on prior year).
- Active employers established prior to 12 March 2020. However, charities which are registered with the Australian Charities and Not for profits Commission will be eligible regardless of when they were registered, subject to meeting other eligibility requirements.
- Made eligible payments you are required to withhold from (even if the amount you need to withhold is zero).
Government fact sheet:
JobKeeper Payment
What is it?
A subsidy payment of $1,500 per fortnight per employee or sole trader for up to six months. The payment will help businesses affected by the Coronavirus retain their employees and continue to earn an income.
How does it work?
Employers and sole traders must apply to the ATO and provide supporting information demonstrating a downturn in revenue. In addition, the number of eligible employees employed by the business on a monthly basis must be reported.
Amount:
$1,500 before tax, per fortnight per employee for up to six months.
Who is eligible?
Businesses:
- with revenue of less than $1 billion and experiencing a 30% decrease in revenue relative to a comparable period a year ago (e.g. March 2020 compared to March 2019); or
- with revenue of $1 billion or more and experiencing a 50% decrease in revenue relative to a comparable period a year ago (e.g. March 2020 compared to March 2019); and
- not subject to the Major Bank Levy.
- Self-employed individuals will also be eligible to receive the JobKeeper Payment where they have suffered or expect to suffer a 30%decline in turnover relative to a comparable prior period a year ago (of at least a month).
Employees:
- must be Australian Citizens or hold an eligible work visa; and
- on the employers books on 1 March 2020 and continues to be engaged by the employer - including full-time, part-time, long term casuals (at least 12 months) and stood down employees.
Eligible employers who stood down employees before the commencement of this scheme will also be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.
When will it be received?
The subsidy started 30 March 2020 and will end 27 September 2020. However, on 21 July 2020, the Government announced it is extending the JobKeeper Payment until 28 March 2021 for businesses and not-for-profits who continue to be significantly impacted by the Coronavirus. See JobKeeper Extension below for more information.
Payment Process:
Payments will be made to the employer monthly in arrears by the ATO.
- If an employee normally receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
- If an employee normally receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.
Government page:
JobKeeper Extension
On 21 July, the Government announced it is extending the JobKeeper Payment until 28 March 2021 and is targeting support to those businesses and not-for-profits which continue to be significantly impacted by the Coronavirus. From 28 September 2020, eligibility for the JobKeeper Payment will be based on actual turnover in the relevant periods, the payment will be stepped down and paid at two rates.
SME Commercial Lease Waivers and Deferrals
What is it?
A combination of rent waivers and rent deferrals. Landlords will be required to reduce rent proportionate to the trading reduction in the tenant’s business caused by the coronavirus pandemic through a combination of waivers of rent and deferrals of rents. Landlords must offer waivers of rent no less than 50%, while the balance must be in the form of a rental deferral.
How does it work?
Landlords must provide qualifying tenants with cash flow relief in proportion to the loss of turnover they have experienced from the COVID-19 crisis.
At a minimum, 50% of the turnover loss must be provided as rent free/rent waiver, with the remainder being provided as a rent deferral, to be paid over at least 24 months. The payment of the rental deferrals must be amortised over the balance of the lease term and for a period of no less than 24 months, whichever is the greater.
Examples:
- A 100% loss in turnover would result in a guaranteed 100% cash flow relief. At least 50% would be rent free and the remainder is rent deferral.
- A 30% fall in turnover would result in a guaranteed 30% cash flow relief. At least 15% would be rent free and the remainder is rent deferral.
Amount:
At a minimum, 50% of turnover loss will be rent free/rent waiver, with the remainder being provided as a rent deferral.
Who is eligible?
- SME commercial tenants with a turnover of up to $50 million; and
- suffering financial stress or hardship as a result of the COVID-19 pandemic as defined by the JobKeeper programme.
When?
From 3 April 2020.
Government fact sheet:
Asset Write-off Threshold Increase
What is it?
The instant asset write-off threshold will be increased from $30,000 to $150,000. The higher threshold is in place from 12 March until 31 December 2020 and applies to new or second-hand assets installed in businesses during these dates.
It will provide cash flow benefits for businesses that will be able to immediately deduct purchases of eligible assets. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets.
When will it be received?
From 12 March until 31 December 2020, for new or second-hand assets first used or installed ready for use in this timeframe. The instant asset write-off is generally claimed back via your business tax return.
Who is eligible?
Businesses with aggregated annual turnover of less than $500 million (up from $50 million).
ATO fact sheet:
Accelerated Depreciation for Investments
What is it?
Businesses will be able to deduct an additional 50% of an asset cost in the year of purchase from 12 March 2020 until 30 June 2021. This is designed to support business investment and economic growth over the short term.
When will it be received?
From 12 March 2020 until 30 June 2021.
Who is eligible?
The depreciating asset must:
- Be new and not previously held by another entity (other than as trading stock)
- Not be an asset to which an entity has applied depreciation deductions or the instant asset write-off rules
- Be first held on or after 12 March 2020
- First used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021
ATO fact sheet:
Extended Eligibility for JobSeeker Payments (for sole traders)
What is it?
Eligible sole traders will be granted access to the JobSeeker allowance, which now includes an additional coronavirus supplement of $550 per fortnight until 27 September 2020.
The standard waiting periods and asset tests will be waived to allow quicker access to these payments. Individuals will still be able to keep operating their businesses and earn up to $1,075 per fortnight before their payments are affected.
Amount:
$550 per fortnight.
Who is eligible?
Sole traders that meet the JobSeeker allowance income test.
When will it be received?
After your application has been approved via the Services Australia website.
Government page:
Early access to superannuation (for sole traders)
What is it?
The Government is allowing sole traders who have seen their hours of work or income fall by 20% or more as a result of the pandemic to access their superannuation. This is capped at $10,000 this financial year and a further $10,000 next financial year. The withdrawals will be tax free.
Amount:
$10,000 this financial year and $10,000 next financial year.
Who is eligible?
Sole traders whose income has dropped by 20% or more.
When will it be received?
On successful application via the myGov website when applications open in April 2020.
Government page:
Wage Subsidy for Apprentices and Trainees
What is it?
Eligible employers can apply for a wage subsidy of 50% of an apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020.
Amount:
Businesses can be reimbursed up to a maximum of $21,000 per eligible apprentice, (which is $7,000 per quarter for the first three quarters of 2020).
Who is eligible?
Small businesses with less than 20 full time employees who retain an apprentice or trainee. The apprentice must have been in training with the small business on or before 1 March 2020.
When will it be received?
From early April 2020. For information on how to apply, contact an Australian Apprenticeship Support Network (AASN) provider. Claims for this subsidy must be lodged by 31 December 2020.
Government fact sheet:
Tax Payments Relief
What is it?
The Australian Tax Office (ATO) will consider relief for certain tax obligations to eligible businesses, including deferring tax payments up to four months.
How does it work?
If disruption to your business operations causes you to fall behind with your tax and/or super obligations, read the ATO's information on COVID-19 and call them on 1800 806 218 to discuss a support plan for your business.
Who is eligible?
Anyone impacted by COVID-19.
Government fact sheet:
Loan Payments Relief
What is it?
The Australian Banking Association has announced that Australian banks will defer loan repayments for small businesses affected by coronavirus for six months.
How does it work?
Any small business that has a bank loan should contact their bank directly to apply. A list of hardship contact details for Australian banks can be found on the ABA website.
Who is eligible?
Small businesses affected by coronavirus.
ABA fact sheet:
Assistance for Severely Affected Regions and Sectors
What is it?
Financial assistance to support regions, communities and industries that have been disproportionately affected by the economic impacts of the Coronavirus outbreak, including those heavily reliant on industries such as tourism, agriculture and education.
How does it work?
$1 billion will be spent through existing or newly established Government programs or initiatives. In addition, the Government is assisting the airline industry through a package of up to $715 million.
Amount:
$1.7 billion.
Who is eligible?
The Deputy Prime Minister will work with affected industries and communities to develop recovery plans and measures.
When?
As soon as possible.
ABA fact sheet:
Supporting the flow of credit
Queensland COVID-19 Jobs Support Loans
What is it?
Low interest, 10 year loan of up to $250,000 to assist with working capital expenses such as wages, rent, rates and other related expenses. Interest will be fixed at a rate of 2.5%.
How does it work?
The scheme is for Queensland businesses (including non-for-profits) financially impacted by COVID-19, to retain employees and maintain operations. Loans will be provided for a term of 10 years, with no repayments or interest charged in the first year, followed by two years of interest only payments. Principal and interest repayments will commence from the third year for the remainder of the term.
Amount:
Up to $250,000.
Who is eligible?
Queensland businesses financially impacted by COVID-19 can apply if they have the following information:
- Business Financial Statements for 2017-18 and 2018-19
- Personal Taxation Returns for 2017-18 and 2018-19
- Bank Account Information
- Australian Tax Office (ATO) Integrated Client Account Statement
- Aged list of debtors and creditors at time of application
- Applicant Identification
- Organisation Constitution or Rules of Association and Certificate of Incorporation (if applying as a non-profit organisation)
- Trust Deed (if applying as a trust)
When?
Open until 25 September 2020 or until funding is fully committed.
Government fact sheet:
Exemption from Responsible Lending Obligations
What is it?
To allow lenders the ability to move quickly to support small businesses, the Government is providing an exemption from responsible lending obligations for a period of six months in relation to the credit they extend to their existing small business customers, provided there is an existing borrowing relationship and some proportion of that credit is used for business purposes.
Government fact sheet:
Reducing the Cost of Credit for ADI Lenders
What is it?
A term funding facility from the Reserve Bank of Australia (RBA) to Authorised Deposit-Taking Institutions (ADI).
Banks will have access to $90 billion in funding at a fixed interest rate of 0.25%. This will reinforce the benefits of a low cash rate by reducing funding costs for banks, which in turn will help reduce interest rates for borrowers.
To encourage lending to businesses, the facility offers additional low-cost funding to banks if they expand their business lending, with particular incentives applying to new loans to SMEs.
Amount:
$90 billion.
Government fact sheet:
Supporting the flow of credit and reducing the cost of credit
Support for NON-ADI and Smaller ADI Lenders in the Securitisation Market
What is it?
The Government is providing $15 billion to the Australian Office of Financial Management (AOFM) to invest in structured finance markets used by smaller lenders, including non-ADI and smaller ADIs.
This program will assist smaller lenders, who will not benefit from the RBA’s term funding facility, to maintain access to funding and support competition in the lending market. This in turn will help keep down borrowing costs for businesses.
Amount:
$15 billion.
Government fact sheet:
Support for NON-ADI and Smaller ADI Lenders in the Securitisation Market
Ensuring Banks Are Well Placed to Lend
What is it?
The Australian Prudential Regulation Authority (APRA) has announced temporary changes to its expectation regarding bank capital ratios. The changes will support banks’ lending to customers, particularly if they wish to take advantage of the new facility being offered by the RBA below (Reducing the Cost of Credit for ADI Lenders).
Government fact sheet:
Support for Individuals
Payments to Support Households
What is it?
Financial support for lower income Austalians. Two separate $750 tax-free payments to social security, veteran and other income support recipients and eligible concession card holders.
Amount:
$1500, in two seperate $750 payments.
Who is eligible?
Australian residents receiving social security, veteran and other income support payments.
When?
From 12 March 2020 to 31 December 2020
Government page:
Income Support for Individuals
What is it?
The Government is providing support for individuals to assist them. Eligibility for income support will be temporarily expanded and a new, time-limited Coronavirus income support supplement of $550 per fortnight will be paid to eligible recipients.
Amount:
$550 per fortnight.
Who is eligible?
People that receive income support payments in the following categories:
- Jobseeker Payment (and all payments progressively transitioning to JobSeeker Payment; those currently receiving Partner Allowance, Widow Allowance, Sickness Allowance and Wife Pension)
- Youth Allowance Jobseeker
- Parenting Payment (Partnered and Single)
- Farm Household Allowance
- Special Benefit recipients
Expanded access (during the period of the Coronavirus supplement):
- Jobseeker Payment and Youth Allowance Jobseeker criteria will now provide payment access for permanent employees who are stood down or lose their employment; sole traders; the self-employed; casual workers; and contract workers who meet the income tests as a result of the economic downturn due to the Coronavirus. This can also include a person required to care for someone who is affected by the Coronavirus.
- Asset testing for JobSeeker Payment, Youth Allowance Jobseeker and Parenting Payment will be waived for the period of the Coronavirus supplement. However, income testing will still apply to the person’s other payments.
When will it be received?
From 27 April 2020 to 24 September 2020. Beyond this date, the Coronavirus Supplement will be available at $250 per fortnight until 31 December 2020 (see below).
You will be paid the Coronavirus Supplement if you receive income support under JobSeeker Payment, Youth Allowance , Parenting Payment (Partnered or Single), Austudy, ABSTUDY (Living Allowance), Farm Household Allowance, Special Benefit or Department of Veteran's Affairs Education Scheme, or if you are an Eligible New Enterprise Incentive Scheme participant.
Government page:
Temporary Reduction in Super Minimum Drawdown (for retirees)
What is it?
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50% for the 2019-20 and 2020-21 financial years. This will benefit retirees by reducing the need to sell investment assets to meet minimum drawdown requirements.
How does it work?
Under current minimum drawdown requirements, retirees must drawdown a percentage (varies based on age, see table below) of their account-based super balance, per year. With the temporary reduction, minimum requirements are halved. For example people between the age of 65 and 74 are required to drawdown 5%, this has now been reduced to 2.5%.
| Age Range | Standard minimum drawdown rate | Reduced rate |
|---|---|---|
| Under 65 | 4 | 2 |
| 65-74 | 5 | 2.5 |
| 75-79 | 6 | 3 |
| 80-84 | 7 | 3.5 |
| 85-89 | 9 | 4.5 |
| 90-94 | 11 | 5.5 |
| 95+ | 14 | 7 |
Who is eligible?
Retirees with account-based pensions.
Government fact sheet:
Grow the business you want.
See if you qualify