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Updated for 2021: Australian Government small business stimulus and relief packages

The Australian Government has announced several stimulus and relief packages, designed to sustain small businesses through the coronavirus (COVID-19) pandemic and keep employees in work. The government has stated that the measures are temporary, targeted and scalable. The main areas of support relevant to small businesses to date are:

JobKeeper Payment

Businesses impacted by the coronavirus (their turnover has been reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month) could be able to access a subsidy from the Government to continue paying their employees. For each eligible employee, affected employers will be able to claim a fortnightly payments of:

  • $1,200 per fortnight for full-time employees and $750 for employees who work less than 20 hours (from 28 September to 3 January 2021)
  • $1,000 per fortnight for full-time employees and $650 for employees that work less than 20 hours (from 4 January to 28 March 2021)

Businesses without employees that meet turnover tests, such as the self-employed, can also apply for the JobKeeper Payment.

Read JobKeeper: new phase details to find out more.

Expanded eligibility for JobSeeker Payment for sole traders

Eligible sole traders will be granted access to the JobSeeker Payment, which now includes an additional coronavirus supplement payments at the following rates:

  • $250 per fortnight (between October and December 2020).
  • $150 per fortnight (between January and March 2021)

On 30 March, it was announced that the income test for partners of job seekers will be increased from $48,000 to $79,762 to provide greater access.

Sole traders are also eligible for the JobKeeper Payment if they meet certain eligibility criteria. Other eligible businesses can nominate only one working director, partner, beneficiary or shareholder, as well as, any eligible employees.

People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account. Visit the ATO website or read JobSeeker: new phase details to find out more.

Who is eligible?

Sole traders that meet the JobSeeker Payment income test.

When will it be received?

After your application has been approved via the Services Australia website.

JobMaker Hiring Credit

The Australian Government has announced the JobMaker Hiring Credit to encourage businesses to hire young people for new positions. Eligible employers can receive the payment for up to 12 months (between 7 October 2020 to 6 October 2021) for new jobs that employ an eligible young person. Under the program, employers will be credited $200 a week for additional employees aged 16 to 29 years and $100 a week for new employees aged 30 to 35 years who meet the eligibility criteria.

Who is eligible?

Read JobMaker Hiring Credit – what it is and who can apply for a summary of the eligibility criteria for employers and employees.

When will it be received?

From 1 February 2020, you will be able to claim the JobMaker Hiring Credit via the ATO.

Tax and FBT concessions

A number of tax and fringe benefits tax (FBT) concessions were announced as part of the 2020-21 Federal Budget. This includes:

  • a reduction in the tax rate for individuals
  • immediate deductions of some start-up expenses
  • changes to FBT on car parking and work-related electronic devices provided to employees
  • research and development (R&D) incentives
  • loss carry back provision.

Read our summary of the FBT and tax concessions announced in the Federal Budget to find out more.

Please note: The budget will need to be passed by Parliament and receive royal assent before these concessions become available to business owners.

Early access to superannuation

The Government is also giving sole traders, people whose business was suspended due to restrictions, or those have experienced a 20 per cent or greater reduction in turnover as a result of the pandemic, special access to withdraw funds from superannuation. The tax free withdrawals for the 2019-20 financial year are now closed. Withdrawals for eligible applicants during the current financial year are capped at $10,000. Applications can be made via the my.gov.au portal, and are managed by the ATO who will communicate with the super funds of eligible applicants.

Who is eligible?

Sole traders, people whose business was suspended or those who have experienced a reduction in turnover of 20% or more, plus other individuals who meet eligibility criteria as defined by the ATO.

Greater leniency for insolvency and bankruptcy

The threshold at which a creditor can take action against a small business has increased from $2,000 to $20,000. The mandatory response time has also increased from 21 days to 6 months. Temporary relief for directors from any personal liability for trading while insolvent has also been announced. Visit the Australian Financial Security Authority website to find out more.

On 1 January 2021new insolvency laws to help small business owners in financial distress were introduced.

Cash flow boost for employers

Eligible employers will receive between $20,000 and $100,000 in cash flow boost amounts. Under the measure, eligible entities receive cash flow boost credits when lodging activity statements for tax periods from March through to September 2020. Any eligible businesses that have not lodged an activity statement for any one or more of these tax periods will receive cash flow boosts when the lodge outstanding activity statements, provided they do so within two years after their due date. Visit the ATO website for more details.

SME Guarantee Scheme – phase 2

As part of the second phase of the SME Guarantee Scheme, the focus of the program will move beyond providing funding for working capital to providing businesses with access to longer and more affordable credit that can be used to help businesses fund a wider range of investments. Businesses will be eligible to borrow up to $1 million for a term of up to five years.

Who is eligible?

Businesses with a turnover of up to $50 million that pass the lenders’ credit assessment processes.

When will it be received?

The second phase of the scheme will start on 1 October 2020 and run until 20 June 2021.

Boosting Apprenticeship Commencements wage subsidy

Eligible employers can apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage between 5 October 2020 and 30 September 2021. Businesses can be reimbursed up to a maximum of $7,000 per quarter. Visit the Department of Education, Skills and Employment website to find out more.

Increase in the instant asset write-off threshold and accelerated depreciation

The instant asset write-off threshold has been temporarily amended in response to COVID-19 to allow all businesses with an aggregated turnover of less than $5 billion to deduct the full costs of eligible depreciable assets of any costs, installed and ready for use between 6 October 2020 to 30 June 2022. The measure is referred to as temporary full expensing, and is an additional expansion of the threshold, which was earlier increased from $30,000 to $150,000.

Small businesses with an aggregated annual turnover of less than $50 million can also claim the full expense of second-hand purchases. Small businesses with aggregated turnover of less than $10 million can also deduct the balance of their simplified depreciation pool at the end of the income year, while full expensing applies.

More information from the ATO

When will it be received?

The instant asset write-off is generally claimed back via your business tax return.

Tax relief

The Australian Tax Office (ATO) will also consider relief for certain tax obligations to eligible businesses, including deferring tax payments up to four months.

If disruption to your business operations causes you to fall behind with your tax and super obligations, read the ATO’s information on COVID-19, call them on 1800 806 218 or speak to your tax professional so that they can work with you to find a solution.


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