Government Support for your Business
Below is an update of the latest measures announced in the last few days that you need to consider for your business. These are in addition to the measures we outlined for you last week on the PAYG(W) payments for employees and other measures.
As always, we are here to help with all your accounting and advice needs to ensure your business is best placed to access support.
‘JobKeeper’ payment to subsidise wages
A direct payment from the ATO to businesses to refund them $1,500 per fortnight per employee for a six month period. Employees counted will be those on payroll from March 1. The payments will be available to sole traders also.
Payments will begin to flow to business from May and are designed to be payments in arrears to businesses to allow them to keep employees on the payroll.
How do I get it?
Details are still coming to hand, however, the ATO will use the single touch payroll system to pay businesses. To be eligible business needs to have suffered a decline in turnover of at least 30%.
SME Banking Relief Package
Banks are offering deferrals on repayments on existing loans for periods of three months plus. Banks are also being supported by government guarantee to provide loans to small business with concessional interest rates, for three year terms with the first six months being repayment free, the second six months being interest free and the last 24 months being the period for loan paydown.
The relief package is available now.
How do I get it?
Contact your bank or any Australian financial institution for an application. There are long waiting periods at present due to demand. You may only apply to one bank at a time for the package so get your homework done with all banks you wish to speak to before lodging a formal application.
Property that is rented or owned and leased
State governments will be placing a moratorium on evictions of tenants for the next six months where tenants are unable to meet their rental payments under their lease. This means if your business pays rent on its premises you can remain in place. Conversely, if you are the owner of a property that is leased you cannot evict your tenant for failure to pay you rent. The government has urged landlords, tenants and banks to come to arrangements themselves and is yet to announce a direct relief package for the rental sector (both housing and business property).
This week the eviction moratorium will come into effect once state parliaments can pass the legislation required.
What do I need to do?
If you are a landlord you should:
1. urgently contact your estate agent to assess your tenant’s ability to make any rental payment at this time, be it half or part rent for the month; and
2. contact the bank/s that hold the loans attached to your investment property and seek a freeze on repayments. Where your investment has been purchased using two loans, being one against your principle place of residence and one against the investment property, you should seek a freeze on both loans – these may well be with different banks; and
3. contact your body corporate (if you have one attached to your investment property) and make arrangements for a freezing of body corporate fees; and
4. contact the local council where your investment property resides, seeking a freeze in payments of council rates attached to your investment property.
If you are a tenant you should contact your agent or landlord immediately and begin discussing what arrangement can be reached to lessen the rental burden placed on your business at this time. The government has made it clear that any future support it offers in this area will flow to those who have demonstrated a willingness to cooperate with their counter-parties and arrive at an agreed arrangement rather than sought conflict.
Early access to superannuation
Business owners, sole traders and employee may access their superannuation in two payments of $10,000 per person over the next four months.
The first payment of $10,000 is available by June 30 and second payment of $10,000 is available from July 1.
How do I get it?
You make an application via the mygov.gov.au website. If you have an APRA regulated super account, the government will direct the fund to make payment to you directly. Where you are a member of a Self-Managed Super Fund you must receive the determination from the myGov application before paying yourself from the fund.
Employees being stood down or terminated
Employers and employees are encouraged to work together to find appropriate solutions that suit the needs of individual workplaces and staff. Employees who are stood down without pay remain employed for the period of the stand down. They are also eligible for the $1,500 Job Keeper payment from the government.
Under the Fair Work Act, an employee can only be stood down without pay if they cannot be usefully employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible.
Whether the option of standing down employees is available in circumstances relating to coronavirus is very fact dependent and an employer should exercise the option cautiously. The employer must be able to demonstrate that:
there is a stoppage of work
the employees to be stood down cannot be usefully employed (which is not limited to the work an employee usually performs)
the cause of the stoppage must also be one that the employer cannot reasonably be held responsible for.
Where employees are terminated the Job Seeker payment does not apply. You must meet all the current legal requirements for termination or redundancy as would apply at any other time. You should have your terminated employees and any employee whose hours and income have been reduced by 20% or more to go to Centrelink themselves and register for the Job Seeker payment which totals $1,100 per fortnight.
All rules are in place and in effect right now
What do I need to do?
Talk to your staff and try to come to an arrangement that works for you and your business. Any staff that is not currently needed in their full capacity but that you wish to have on staff for when the crisis has passed can be carried using the $1,500 per fortnight Job Keeper payment. Staff not required at all right now but earmarked for return after the crisis can also receive this payment. Staff to be terminated will need to be so following the requirements in effect under normal circumstance.
Operation of my business during the social distancing measures
Your business can continue to operate:
· Unless specifically shut down
· Must adhere to the 4 sq metres per person
· Must maintain the 1.5 metre separation
· Office staff where possible should work from home
· No more than two people to congregate inside or outside the premises
· Normal OH&S rules apply regarding your Duty of Care obligations and provision of Protective equipment
These rules are in place and in effect right now
How do I know if I can operate?