On this page, FinCare answers common questions about COVID-19, including the following topics:
- Information for business owners
- Cash flow assistance payment
- Information for apprentices and trainees
- Mortgage information
- Superannuation information
- Income support
- Household support
- JobKeeper payment
- JobSeeker payment – Parental leave
- How to prepare your business if you get sick
- working from home
INFORMATION FOR BUSINESS OWNERS
What are my options if I need to let employees go when the business can’t afford to retain them?
It will depend on your industry and your individual business circumstances. The Fair Work Ombudsman’s website provides some guidance, but this is not legal advice. Existing FinCare clients may contact our HR Adviser on 0487 385 887 free of charge for an understanding of the risks and what needs to be considered.
What is the cash flow assistance for employers from the government?
The Cash flow assistance for employers measures will assist businesses to manage cash flow challenges and help them to retain their employees. The support will be available in two forms:
- Boosting Cash Flow for Employers measure which provides for a tax-free payment to be made to eligible employers; and
- A wages subsidy for apprentices and trainees.
Speak with your FinCare Client Manager for further details of eligibility and how you can receive this assistance.
CASH FLOW ASSISTANCE PAYMENT
My business is experiencing lost trade and cashflow problems – can I get help with my bills?
If you’re having concerns about cash flow, paying fixed costs such as rent, wages, utilities and loan repayments, the earlier you act the easier it can be to negotiate temporary payment terms with your lenders, creditors and suppliers. Read more about financial hardship.
Business loan repayments: Small businesses impacted by COVID-19 are now able to defer their business loan repayments for six months. Read the FAQs.
To find out more about deferring your loan repayments, contact your bank. Here are the dedicated business hardship contact lines for the key Australian banks:
- ANZ Bank – 1800 252 845
- Commonwealth Bank Hardship – 1300 720 814
- National Australia Bank Care – 1800 701 599
- St George Bank Assist – 1800 629 795
- Summerland Credit Union – 1300 802 222
- Newcastle Permanent – 13 19 87
- Regional Australia Bank Hardship – 13 20 67
- Bank of Queensland – 1800 079 866
- Westpac Assist – 1800 067 497
- Southern Cross Credit Union – 1300 360 744.
What do you need to be eligible for the cash flow assistance payment?
The payments will only be available to ‘active eligible employers established prior to 12 March 2020.
This means an entity will be eligible if it satisfies the following requirements:
- it had an ABN on 12 March 2020;
- it makes a payment from which an amount is required to be withheld (even if the amount is not actually withheld) under Subdivs 12-B, 12-C or 12-D in Schedule 1 to the TAA (these are payments for work and services, payments for retirement or because of termination of employments, and benefit and compensation payments);
- an amount was included in its assessable income for the 2018–19 income year in relation to it carrying on a business, and the Commissioner was notified on or before 12 March 2020 (or a later time allowed by the Commissioner) — in practical terms, this would most likely mean the 2019 tax returns had been lodged by 12 March 2020; or
- the entity made a taxable supply in a tax period that started on or after 1 July 2018 and ended before 12 March 2020, and the Commissioner was notified on or before 12 March 2020 (or a later time allowed by the Commissioner) — in practical terms, this would most likely mean that an activity statement for the relevant tax period had been lodged by 12 March 2020; and
- the entity (or its associate or agent) has not engaged in a scheme for the sole or dominant purpose of seeking to make the entity entitled to the payment or to increase the entitlement of the entity to the payment.
However, charities that are registered with the Australian Charities and Not-for-profits Commission (ACNC) will be eligible regardless of when they were registered, subject to meeting other eligibility criteria (this recognises that new charities may be established in response to the Coronavirus pandemic).
What should I do with the money I receive from the Cash Flow Boosting scheme?
You don’t need to pay this money back, however you still will be required to pay GST and PAYG withholding above $25,000. If you choose to defer paying the balance to safeguard cashflow you should put this money somewhere safe away from day to day expenses, so you can pay the ATO once the deferral is passed.
If i have casual employees, can I still access the business relief payments?
Yes, as long as you are still paying your casuals and have tax withholding otherwise due, the credit payment is part of your PAYG you would normally be paying on your BAS lodgements. Contact your FinCare Client Manager to discuss your situation further.
Will sole traders and partnerships be eligible for the cash flow?
These types of employers will be eligible for PAYG withholding paid in respect of their employees, just like a company or a trust.
However, a sole trader or a partner in a partnership cannot employ themselves, so if the business does not employ anyone in the eligible period, sole traders and partners will not be eligible for the payment in respect of their own drawings from the business.
INFORMATION FOR APPRENTICES AND TRAINEES
How does the wage subsidy for apprentices and trainees work?
The second part of the Government’s cash flow assistance for employers to help smaller employers to retain apprentices and trainees is in the form of a wage subsidy. At this stage it is unclear whether the subsidies will be subject to tax in the employers’ hands.
The subsidies will be offered under the Australian Apprenticeships Incentive Program.
This measure is estimated to cost $1.3 billion across 2019–20 and 2020–21 and support up to 70,000 businesses employing around 117,000 apprentices.
- The wage subsidy will be 50 per cent of the apprentices or trainee’s wages for the nine months from 1 January 2020 to 30 September 2020.
- The maximum subsidy is $21,000, or $7,000 per quarter, per apprentice or trainee.
- Employers will be eligible where it employs fewer than 20 full-time employees and retains an apprentice or trainee.
- The apprentice or trainee must have been in training as at 1 March 2020.
- There is no turnover threshold for this measure.
- Employers of any size and Group Training Organisations that re-engage an eligible apprentice or trainee who could not be retained by a small employer will also be eligible for the subsidy, i.e. where a small employer is not able to retain an apprentice, the subsidy will be available to the new employer of that apprentice.
- Employers can register for the subsidy from early April 2020 to 31 December 2020.
What is the fee for Loren (FinCare’s Senior Mortgage Broker) services?
If you are one of Loren’s clients, there is no fee for her services.
Are banks freezing mortgages?
If you are with Commonwealth:
- You will be able to defer home loan repayments for up to six months
- Interest will be capitalised
- Interest and charges will be added to your loan balance
- Your loan balance will be recalculated at the end of the support period
If you are with Westpac
- You will be able to defer repayments for three months
- A three-month extension is available after review
- This option is for people who have lost their job or income as result of coronavirus
- Deferred interest will be capitalised, so your repayments will increase for the remainder of your loan term
If you’re with NAB
- You will be able to defer your repayments for up to six months
- There will be a three-month checkpoint with the bank
- You are eligible if you are a home loan customer affected by coronavirus
- This applies for owner-occupiers, investors or those on a principal and interest or interest only repayment schedule
- You won’t be able to redraw during the repayment pause
If you are with ANZ
- You may be able to put your repayments on hold for six months
- Interest will be capitalised
- The bank will check in with you after three months
Do I need to provide proof to be eligible for freezing mortgages?
Some banks explicitly state only customers affected by coronavirus will be eligible to pause their repayments. But whether you need to provide such proof (such as a doctors note or severance form) t verify you have been affected by coronavirus depends on which bank you’re with.
CBA says no evidence is required to request a deferral, although you may be asked to declare you have been impacted by coronavirus.
Westpac is currently looking at each request on a case-by-case basis rather than imposing blanket requirements.
ANZ’s stance seems to be if you have been up to date with your repayments, you will most likely be eligible.
NAB will also be treating each request on a case-by-case basis, and said staff would ask each applicant a series of questions to determine eligibility.
My tenants are not paying their full rent or have temporarily stopped paying rent because their income has been adversely affected. Can I still claim deductions on my rental property expenses?
Yes. If tenants are not meeting their payment obligations under the lease agreement due to COVID-19 and you continue to incur normal expenses on your property, then you will still be able to claim these expenses in your tax return.
I’m considering reducing the rent for tenants to enable them to stay in the property. The tenants are not in default of their rent. Will my deduction for rental property expenses be reduced because of this?
No. If you decide to reduce the rent to enable your tenants to remain in the property (thereby maximising your rental return in a changed rental market), your deduction for rental property expenses will not be reduced.
Am I eligible to access my superannuation early?
Eligible individuals will be able to apply to access up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for approximately three months (exact timing will depend on the passage of the relevant legislation).
An individual will be eligible for early release if they satisfy any one or more of the following requirements:
- they are unemployed;
- they are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
- on or after 1 January 2020:
- the individual was made redundant;
- the individual’s working hours were reduced by 20 per cent or more; or
- if the individual is a sole trader — their business was suspended or there was a reduction in their turnover of 20 per cent or more.
How do I apply to access my superannuation early?
Individuals will be able to apply online directly to the ATO through their myGov account (www.my.gov.au) for early release of their superannuation from mid-April 2020. Individuals will need to certify that they meet specific eligibility criteria. We can discuss this with you.
An application for release must be made within six months of the amendments commencing.
It is expected that individuals will self-assess their eligibility and that they will be able to apply through the ATO online services on myGov. An applicant may specify the amount they wish to have released and the superannuation entity from which the amount is to be released.
Once the ATO has processed the application, they will issue the individual with a determination, and provide a copy of this determination to the individual’s superannuation fund, which will advise them to release the superannuation payment. The fund will then make the payment to the individual without them needing to apply to the fund directly. However, to expedite payments, it would be prudent for individuals to immediately ensure that the fund has the correct details, including current bank account details and proof of identity documents.
Separate arrangements will apply for members of self-managed superannuation funds. Further guidance will be available on the ATO website: www.ato.gov.au.
What are the income support payments?
Extra income support payments will be available for people affected by COVID-19:
- A temporary fortnightly $550 coronavirus supplement from 27 April 2020 if you’re getting an eligible payment.
- Expanded eligibility for some payments to make them easier to claim.
- A crisis payment if you need to self-isolate, are in severe financial hardship and you can get an in support payment.
What are the household support payments?
- A temporary fortnightly $550 corona-virus supplement from 17 April 2020 if you’re getting an eligible payment.
- Expanded eligibility for some payments to make them easier to claim.
- A crisis payment if you need to self-isolate, are in severe financial hardship and you can get an income support payment.
What is the JobKeeper Payment?
The JobKeeper Payment will help businesses to keep people in their jobs so they can earn an income, even if their hours have been cut.
Eligible businesses can have access $1,500 a fortnight for 6 months to keep paying eligible employees. The JobKeeper Payment is also available to people who are self-employed.
Who is eligible for the JobKeeper payment?
Employers (including non-for-profits) will be eligible for the subsidy if:
- Their business has a turnover of less then $1 billion and their turnover has fallen by more then 30% (of at least a month); or
- Their business has a turnover of $1 billion or more and their turnover has fallen by more than 50% (of at least a month); and
- The business is not subject to the Major Bank Levy
To establish that a business has faced a 30% (or 50%) fall in their turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or three months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier.
What is the eligibility around start dates for employees?
Full time – anytime before 1/3/2020.
Part time – anytime before 1/3/2020.
Casual – 12 months
Are sole traders with no employees still eligible for the JobKeeper payment?
Yes, both those who employ people, and those who do not, can access these payments.
Sole traders will be eligible for the JobKeeper payments if their turnover is expected to be reduced by more than 30% as a result of COVID-19, compared to “a comparable period a year ago, of at least a month”.
Who do I nominate to receive the JobKeeper Payments if I have no employees?
You will need to nominate yourself by providing your ABN and tax file number assuming the 30% reductions are met.
What about if I operate my business through a partnership or a trust?
According to a statement from Treasurer Josh Frydenberg on Monday, Australian businesses that are structured as companies, partnerships, trusts and sole traders are all eligible for the scheme, as are not-for-profit entities and charities.
I’m not sure my turnover will be down by 30%, so should I register my company for JobKeeper?
You should still register your company for JobKeeper, as your business circumstances may change in future months. Registrations will ensure that you receive relevant updates and guidelines from the ATO. Click here to register.
How do I apply for the JobKeeper Payment?
Businesses with employees:
- Initially, employers register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020. Subsequently, eligible employers will be able to apply for the scheme by means od an online application.
- Eligible employers will need to identify eligible employees for the JobKeeper Payments and must provide monthly updates to the ATO.
- Participating employees will be required to ensure eligible employees will receive, a minimum, $1,500 per fortnight, before tax.
- It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
Businesses without employees:
- Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via ato.gov.au from 30 March 2020.
- Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individuals Tax File Number and provide a declaration as to recent business activity.
- 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 made monthly to the individuals bank account.
How do I receive the JobKeeper Payments?
- Register an intention to apply on the ATO website and assess that they or will experience the required turnover decline.
- Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
- Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer they will continue to receive their regular income according to their prevailing workplace arrangements. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500 per fortnight, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.
- Notify all eligible employees that they are receiving the JobKeeper Payment.
- Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
How often will I need to report for the JobKeeper Payment?
You are required to report monthly.
Do JobKeeper payments include superannuation?
No. According to Treasury, it will be up to individual employers whether they chose to pay superannuation on additional wages available through the JobKeeper payments.
I have 2 part-time jobs, which jobs should I accept the JobKeeper payment from?
Guidance around this is whoever you have nominated as your first employer in terms of tax withheld, this will be the employer you will get the JobKeeper Payment from.
However, if one of your part-time jobs is shutting down, you should receive the payment from this employer so you are still getting paid from your other part-time job.
What happens if one of my employees earns more then another employee, will the money be distributed based on their wages?
No, regardless of the employees wage the $1500 will be distributed equally.
If you’ve been furloughed or a drastic reduction of pay (of which your company is using JobKeepers to pay you for this reduced time) can you still individually claim Job Seekers as while you are still employed, and your pay has dropped by a lot?
No. If you have claimed Job Seekers, you need to notify Centrelink when you get JobKeepers. You cannot get both
JOBSEEKER PAYMENT – PARENTAL LEAVE
I’m receiving the standard parental leave 18-week payment. Can I apply for the corona supplement?
If that is above the $1500 per fortnight, unfortunately you can’t get anything further.
Can you receive Parental leave (not parental payment) as well as Job Seekers?
Information on the Treasury website suggests if you are on parental leave from your employer you are entitled to JobKeeper, if you aren’t claiming Parental Leave Pay from Services Australia. If your employer has a paid parental leave scheme separate from the government Parental Leave Pay, then you are still entitled to JK. If you are on unpaid parental leave it appears you are also entitled to JK.
I’m self-employed but on maternity leave and currently receiving the standard parental leave 18-week payment. These payments end on August 2nd. Due to corona I know I won’t be going back to the same client base/pay I would’ve had. Can I apply for Job Seekers now? Or must I wait until August 2nd?
Given the length of time between now and August 2nd, I would wait, as you never know what happens between now and then and Centrelink won’t process something so far out. I would approach them maybe 4-6 weeks before you are due to need the payment.
I’m on parental leave but partner just been furloughed. What help is there or is it only job seekers for him and the corona supplement?
Most people who have leave without pay (I’m assuming that is the same as furloughed) have been re-instated under Job Keeper which pays slightly higher than job seeker, however without the supplement. But unfortunately, if they are not applying for Job Keeper, then that is what he must rely on.
HOW TO PREPARE YOUR BUSINESS IF YOU GET SICK
How can I prepare my business if I get sick?
It’s important to be prepared in case you cannot be there to run your business. Having a Business Continuity Plan (BCP) ahead of time is a good way to ensure that your business can remain operating or viable should a disaster strike. Start your Business Continuity Plan with this BCP template.
Access a suite of free services, advice and tools designed to support Australian business continuity through the use of technology.
CPA Australia also have a COVID-19 Contingency Plan checklist that’s quick and easy to use.
Here are some other practical ways to prepare for a shut down or isolation period:
- Use cloud-based storage for all your business records to enable you to access your key data and documents from any location with an internet connection.
- Have a list of your key contacts and a handover notes prepared and easily accessible in case someone needs to run your business on your behalf
- Have a staffing plan to ensure your employees are trained so they have the skills and knowledge to undertake necessary activities.
- Make sure that you have arrangements for relief or casual/temporary staff you can call on at short notice if your regular staff are unable to work.
WORKING FROM HOME
My employer is encouraging or requiring me to work from home. Will I be able to claim a deduction for home office expenses?
Yes, if you work from home because of COVID-19 you may be able to claim a deduction for the additional running expenses you incur. These include expenses associated with heating, cooling and lighting in the area you are working from, phone and internet and other running expenses.
We have introduced a temporary simplified method (shortcut method) for you to calculate the additional running expenses you incur as a result of working from home due to COVID-19. The shortcut method allows you to claim 80 cents for each hour you work from home and covers all deductible running expenses. Multiple people living in the same house can claim this new rate. For example, a couple living together could each individually claim the 80 cents per hour rate.
You may still use one of the existing methods to calculate your running expenses if you would prefer to. This includes calculating your actual running expenses.
If I use the shortcut method to claim my expenses while I work from home, what records do I need to keep?
If you are using the shortcut method, you need to keep records showing the amount of time you have spent working from home. This could be in the form of timesheets, rosters, a diary or similar document that sets out the hours worked.
If I claim my actual running expenses, what records do I need to keep?
If you are claiming your actual running expenses, you need to retain receipts for expenses along with records showing your work-related use. Using myDeductions in the ATO app is an easy and convenient way to keep your records in one place.
Can I claim for my rent or mortgage and will this affect capital gains tax if I sell my house?
Occupancy expenses relating to your home – such as rent, mortgage interest, property insurance and land taxes – will not become deductible merely because you are required to temporarily work from home due to COVID-19.
People have asked whether working from home will disqualify them from claiming the main residence capital gains tax exemption when they sell their home. Because working from home in the current circumstances does not, in and of itself, create an entitlement to claim deductions for mortgage interest, you will not lose any part of the main residence exemption.
Will I need to pay FBT if I provide an employee with items to allow them to work from home due to COVID-19?
If you provide your employees with a laptop and a portable printer or other portable electronic devices to enable them to work from home or from another location due to COVID-19, these will usually be exempt from FBT if they are primarily used for your employee’s employment.
If you allow your employee to use a monitor, mouse or keyboard they otherwise use in the workplace, or if you provide them with stationery or computer consumables or pay for their phone and internet access, the minor benefits exemption or the otherwise deductible rule may apply.
The minor benefits exemption may apply for minor, infrequent and irregular benefits of less than $300.
The otherwise deductible rule allows you to reduce the taxable value of benefits by the amount for which your employee would be able to claim a once-only deduction.
Will I need to pay FBT if I provide an employee affected by COVID-19 with emergency accommodation, food, transport or other assistance?
No, so long as both of the following apply:
- The benefit given to your employee is emergency assistance to provide immediate relief.
- That employee is at risk of being adversely affected by COVID-19.
In the context of COVID-19, we will accept that the FBT emergency assistance exemption applies if you, as an employer, have provided emergency accommodation, food, transport or other assistance to an affected employee.
Exempt assistance would cover, for example:
- expenses incurred relocating an affected employee due to COVID-19, including paying for flights for overseas to return to Australia
- expenses incurred providing food and temporary accommodation if an affected employee is unable to travel due to travel restrictions (including domestic, interstate or intrastate travel)
- benefits provided that allow the affected employee to self-isolate or be quarantined
- transporting or paying for an affected employee’s transport expenses including car hire and transport to temporary accommodation.
Have more questions? Contact us today!
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The information provided in this article does not constitute specific advice. For further information , you should contact your professional adviser.