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.
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 if 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).
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.
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.
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.
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.
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.
Have more questions? Contact us today!
Call 02 9542 4655 or email firstname.lastname@example.org.
The information provided in this article does not constitute specific advice. For further information , you should contact your professional adviser.