With events unfolding so quickly, and new announcements being made on the fly, it is easy to miss key developments that may affect your business or family situation.
I have tried to summarise the key developments relating to stimulus and protection measures that may apply.
As always please get in touch if you have further questions about how these measures may apply to your situation, or if you want specific advice relating to your business.
$130 Billion Third Stimulus Package
This afternoon the Prime Minister and Treasurer unveiled the third, and largest stimulus measures, targeted at keeping employees in jobs.
The central measure is the JobKeeper payments: a payment of $1,500 per employee per fortnight.
Details are still to come but what we know so far:
- Those eligible include:
- Full-time workers
- Part-time workers
- Casual employees who have been with their employer for at least 12 months
- Sole traders
- New Zealanders on 444 visas
- Eligible employers will be those with annual turnover of less than $1 billion, who self-assess that they have a reduction in revenue of 30 per cent or more, since 1 March 2020 over a minimum one-month period (50% or more for businesses with a turnover over $1 billion).
- Payments will flow from the first week in May and will be back-dated to today.
- Employers will have a legal requirement to pass on the payment IN FULL to the employee.
- Employers will need to register with the ATO and can do so here: https://www.ato.gov.au/general/gen/JobKeeper-payment/
- Individual can either receive JobSeeker OR JobKeeper payments, but not both. If an employee has already registered for Job Seeker, and wishes to change to JobKeeper, they should speak with their employer.
JobSeeker Eligibility – Partners Income Test
Under existing rules, eligibilty for JobSeeker payments reduce by 60c for every dollar that an applicant’s partner earns over $994 per fortnight. Effectively an applicant will no longer be eligible where their partner earns around $48,000 per annum.
With today’s announcement, the partner’s income threshold will effectively increase to $80,000 per annum meaning far more applicants will be eligible for JobSeeker payments.
Importantly if an applicant is eligible for just $1 of Jobseeker payment, they will be entitled to the full $550 Coronavirus supplement.
If you are uncertain whether you are eligible, or if you should apply for JobSeeker or JobKeeper, please get in touch to discuss your situation.
Further Banking Relief
The Australian Banking Association member banks have announced that repayment relief will now apply to businesses, including commercial landlords, whose loans do not exceed $10M.
Again interest is not foregone, but will be capitalised to the loan balance. Many clients seem sceptical of this, however given we are at record low interest rates, if deferring P & I repayments now is what gets a business or household through the next 6 or 12 months, at a cost of a few extra months or repayments at the end of the loan, then this is a good trade off.
For commercial landlords an undertaking must be made that no evictions or terminations can take place during this repayment holiday.
Protection for Tenants
A 6 month moratorium on evictions has or will be put in place in all States and Territories. This will protect tenants who are unable to make rental payments and is for both commercial and residential tenancies.
Details are still to be released, but as yet there is no indication that this will waive the obligation to pay rent, as payments may be deferred to be caught up at a later date.
The advice, both from MMA and the Prime Minister, is for tenants and landlords to discuss their own situation and come up with a suitable strategy. For landlords, a reduced or rent free period is far better than losing a valuable tenant. For tenants it is important to understand that the economic fallout affects landlords as well. My advice to tenants is to go to your landlord with a clear proposal rather than simply a cry for help. We can assist with working out what is appropriate in your situation.
The new guidelines on limiting public social gatherings to 2 people does not apply to workplaces, however social distancing measures including keeping 1.5 metres apart should still be observed. Employers should be ensuring that appropriate measures are in place to protect the health of their employees and customers.
A caveat to this is that both the NSW Premier, and the Prime Minister have stated that people should only go to work if they cannot work from home. Every effort should be made to allow workers to operate from home.
Working From Home
Lastly a tax tip for those businesses or employees working from home. In all cases, ensure adequate records are kept to substantiate expenses directly attributable to setting up a home office and working from home as these can be claimed on your tax return.
This May Include:
- Cost of purchasing equipment;
- Stationary & office supplies;
- Percentage of home internet. Consider how much time is spent each day using the net for work as opposed to private us; and
- Percentage of mobile phone. Similarly for internet, thought should be given to the percentage of private and work related use.
Employee’s working from home:
Where home is not considered a place of business, employees or businesses can deduct a set rate per hour (currently $0.52 per hour) so adequate records of hours worked should be kept.
Place of Business:
Where a business is now operating solely from home as their place of business, there may be an opportunity to claim a percentage of home occupancy costs, including mortgage interest (or rent), insurance, rates, electricity. This needs to be done based on a reasonable percentage, for example floor area of the home office compared to entire home.
To be deductible, a home office should be separately identifiable space solely used for that purpose (i.e. working from the kitchen table is not enough).
What are my next steps?
If you think you might be eligible or just want to know more, please reach out to our team and we will be able to assist you.