A summary of government financial assistance for businesses and employees

The Federal Government has announced measures to support businesses and employees amidst the COVID-19 fallout. Here’s a summary of the measures so far for payroll teams.

The Federal Government has put together a range of measures to support both businesses and their affected employees as COVID-19 continues to impact the Australian economy. Here’s a summary of relevant measures so far announced to Monday, 23 March 2020.

With a total government economic support bill of $189 billion, including two major economic rescue packages worth $83.6 billion and $100 billion in emergency banking measures, businesses have a range of support to help them during the coming weeks and months.

What is the government doing for businesses

The Federal Government has announced two waves of stimulus to support businesses in their efforts to continue trading and hold on to employees. The second stimulus measure, announced on Sunday 22 March, added $66bn worth of total support to the economy.

  • Cash flow assistance for small-to-medium businesses

The government has beefed up its Boosting Cash Flow for Employers support scheme which is designed to assist small and medium businesses (with aggregated annual turnover under $50 million and that employ workers) to manage cash flow challenges and retain their employees. It will provide up to $100,000 to these businesses (now including not-for-profits and charities), with a minimum payment for all these businesses of $20,000.

The cash flow assistance includes a payment equal to 100 per cent of a business’ salary and wages withheld to a maximum of $50,000, with a minimum payment of $10,000. An additional payment during July-October 2020 will match the total of all payments that an employer has received, meaning eligible entities will receive at least $20,000 and up to a total of $100,000 when both payments are taken together. For more detail, click here.

  • Backing for loans taken out by SMEs

The government has moved to guarantee 50 per cent of eligible loans (from participating banks and non-bank lenders) up to a total of $40 billion to support lending to businesses with a turnover of less than $50 million. Under the ‘coronavirus SME guarantee scheme’ the unsecured loans can be used for working capital purposes and will be available for the six months beginning on 1 April 2020. Businesses will not be required to repay the loans for six months. This comes in addition to the Small Business Relief Package announced by Australia’s banks through the Australian Banking Association, which will allow small businesses hit by COVID-10 impacts to defer their loan payments for six months.

  • Relief for financially distressed businesses

To keep normally healthy businesses afloat the Government has increased 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. It will also offer temporary relief for directors from any personal liability for trading while insolvent, and will give businesses temporary breathing space from the Corporations Act 2001 if unforeseen events arise. The ATO has been given a directive to tailor solutions for owners or directors of business currently struggling with COVID-19, with the possibility of reductions of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

  • Increasing the instant asset write-off

The instant asset write-off threshold has been increased to $150,000. The government has also made moves to expand access to a wider range of businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020. The measure is expected to apply to over 99 per cent of all businesses operating in Australia.

  • Business investment incentives

A time-limited 15-month investment incentive has been announced to support business investment and economic growth by accelerating depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost. The measure is currently slated to run through until 30 June 2021.

  • Apprenticeship and trainee support

To keep apprentices and trainees in work the government is offering their employers a wage subsidy of 50 per cent of any apprentice or trainee’s wages for the 9 months up to 30 September 2020 up to a maximum of $21,000 (or $7,000 per quarter). This is available to either their current or future employers if an apprentice or trainee has to be let go.

  • Targeted support for affected industries and regions

$1 billion has been set aside for regions significantly affected by COVID-19 to assist with management and recovery from the outbreak (this could include those which rely on tourism, agriculture and education). A $715m package has also been announced to shore up the Australian aviation sector which has been hard hit in the early stages of the outbreak.


What is the government doing for my employees?

Employees are expected to be hard hit during COVID-19, with many employers already having begun to shed their non-essential workers. The government is attempting to support those employees whose employers are not able to maintain their employment.

  • Income support expanded during COVID-19

The government has announced a special time-limited COVID-19 income support supplement of $550 per fortnight to be paid in addition to regular unemployment assistance. Available to both existing and future jobseekers on the Newstart payment and others on the youth jobseeker allowance, parenting payment, farm household allowance and special benefit, it effectively doubles the assistance available to jobseekers on Newstart. The government is accelerating rollout by waiving asset tests and waiting periods. Two one-off $750 payments are also available to eligible low income earners in the next year.

  • Limited access to superannuation

Individuals who find themselves in financial stress will be given leave to access their superannuation balances up to a maximum of $10,000 in 2019-20 and $10,000 in 2020-21. This option will be open to those employees who have been made redundant or had their working hours reduced by 20 per cent or more or those who are on government income support payments. Those affected will apply for access through MyGov.

  • Additional measures for affected individuals

There are a range of additional measures for niche affected groups of the population. For example, sole traders and self-employed individuals who are impacted will be granted access to the jobseeker payment and Coronavirus supplement payments.

For more information on support for businesses visit The Treasury website’s dedicated information page. More information on support for individuals can be found here.