As we progress through these challenging times, it may be difficult to keep up-to-date on all the changes, rules and measures which have been introduced to assist individuals and businesses. A number of changes have occurred throughout this year so far and it is important to understand what may or may not be available to you or your business. An update of relevant support measures have been summarised below for your information.

Individuals

Increased Income Support

Government income support payments have been temporarily expanded to include a Coronavirus “Jobseeker Supplement” of $550 per fortnight. This will be reduced from 25 September 2020 to $250 per fortnight and will be available until 31 December 2020.

From 25 September 2020, means testing will be reintroduced with the Asset Test and Liquid Assets waiting period.

The Coronavirus Jobseeker Supplement is available to recipients of the JobSeeker Payment, Youth Allowance, Parenting Payment (Partnered or Single), Austudy, ABSTUDY (Living Allowance), Farm Household Allowance, Special Benefit or Department of Veteran’s Affairs Education Scheme, or if you are an Eligible New Enterprise Incentive Scheme participant.

Early Release of Superannuation

Temporary access to superannuation is still available to eligible Individuals who are now able to access a second payment of up to $10,000 from their superannuation from 1 July until 31 December 2020. The application period for this measure has been extended from 24 September to 31 December 2020.

Individuals who are eligible for early release of their superannuation will be able to apply directly to the ATO through the myGov website www.my.gov.au

To be eligible, Australia and New Zealand citizens and permanent residents must require the COVID-19 early release of super to assist them to deal with the adverse economic effects of COVID-19.

In addition, one of the following circumstances must apply:

  • you are unemployed
  • you are eligible to receive one of the following
    • JobSeeker payment
    • Youth Allowance for job seekers (unless you are undertaking full-time study or are a new apprentice)
    • Parenting payment (which includes the single and partnered payments)
    • Special Benefit
    • Farm Household Allowance
  • on or after 1 January 2020 either
    • you were made redundant
    • your working hours were reduced by 20% or more (including to zero)
    • you were a sole trader and your business was suspended or there was a reduction in turnover of 20% or more (partners in a partnership are not eligible unless the partner satisfies any other of the eligibility).

Eligible Temporary Visa Holders were only able to apply for a single COVID-19 early release of super before 1 July 2020.

Davidsons is not licensed to provide any financial product advice nor make any recommendations in respect of any financial product. If you require such advice, you will need to consult a financial adviser who is licensed to provide financial product advice before you make a decision on a financial product.

HomeBuilder

The HomeBuilder program offers grants to help the residential construction market in light of the Coronavirus Crisis. Eligible owner-occupiers (including first home buyers) may apply for a grant of $25,000 to build a new home, substantially renovate an existing home or buy an off the plan home/new home. The contract must be signed between 4 June 2020 and 31 December 2020, and construction must commence on or after 4 June 2020.

An extension of 3 months for construction commencement in Victoria has recently been announced by the Commissioner of State Revenue.

The announcement provides that:

In light of the introduction of Stage 4 restrictions in metropolitan Melbourne (effective from 2 August 2020) and Stage 3 restrictions in regional Victoria (effective from 5 August 2020), the Commissioner of State Revenue will exercise discretion under the National Partnership Agreement to provide a blanket extension of 3 months to the construction commencement requirement for the HomeBuilder Grant. This means that all applicants for the HomeBuilder Grant in Victoria have 6 months from the signing of the eligible HomeBuilder contract, to commence construction. The Commissioner does not have discretion to grant any extensions beyond this additional 3 month extension.

The HomeBuilder program is an additional measure that will complement existing State and Territory first home owner grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.

To be eligible for the HomeBuilder program, owner-occupiers must meet the following eligibility criteria:

  • you are a natural person (not a company or trust);
  • you are aged 18 years or older;
  • you are an Australian citizen;
  • you meet one of the following two income caps:
    • $125,000 per annum for an individual applicant based on your 2018-19 taxable income or later; or
    • $200,000 per annum for a couple based on both 2018-19 taxable income or later.
  • you enter into a building contract between 4 June 2020 and 31 December 2020 to either:
    • build a new home as a principal place of residence, where the property value does not exceed $750,000; or
    • substantially renovate your existing home as a principal place of residence, where the renovation contract is between $150,000 and $750,000, and where the value of your existing property (house and land) does not exceed $1.5 million (pre-renovation);
  • construction must commence on or after 4 June and within three months (now 6 months) of the contract date.

Businesses

JobKeeper

The JobKeeper Program has been extended until 28 March 2021 to support businesses which continue to be affected by the impacts of Coronavirus. Further information on JobKeeper 2.0 can be found in our previous article here.

Changes to adjust the reference date to determine Employee Eligibility for the existing JobKeeper payment were announced on 7 August 2020 following the registration of the Coronavirus Economic Response Package (Payments and Benefits) Amendment Rules (No.7) 2020. The reference date has changed from 1 March 2020 to 1 July 2020. This is intended to include a greater number of eligible employees in the JobKeeper Scheme who were previously ineligible.  For the fortnights commencing on 3 August 2020 and 17 August 2020, employers were allowed until 31 August 2020 to meet the wage condition for all new eligible employees included in the JobKeeper scheme under the 1 July eligibility test.

Boosting Cash Flow for Employers

The cash flow boost for employers began 24 April 2020 and continues to be delivered through credits in the activity statement system when eligible businesses lodged their activity statements. Eligible businesses will have already received credits in the activity statement system which will continue until the month or quarter of September 2020. From each month or quarter, depending on an entity’s lodgement cycle, an additional cash flow boost will be applied when activity statements are lodged. These credits are equal to the total boosts credited for March to June 2020.

Small or medium business entities or Not for Profit entities that employ workers and have an aggregated annual turnover less than $50 million are eligible. Lodgement and registration requirements must also be met to be eligible.

Victorian Payroll Tax

Since 21 March 2020, the Victorian Government has announced a range of new tax measures. Three are specific to payroll tax. They include the following:

  1. Businesses with annual Victorian taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived.
  2. Additional payments (payments to ‘bridge the gap’) under the JobKeeper scheme are exempt from payroll tax.
  3. Eligible businesses with payrolls up to $10 million can defer their liabilities for the first half of the 2020/21 financial year.

To be eligible for this extended and expanded deferral measure, an employer must lodge:

  • their 2019-20 annual reconciliation return; and
  • their monthly payroll tax returns for the months of July 2020 through to December 2020.

Business Victoria – Support Fund Expansion includes Regional Victoria

The Victorian Government recently announced an expansion to the Business Support fund as a result of the updated restrictions for Melbourne and regional Victoria to help slow the spread of coronavirus (COVID-19) in Victoria.

One-off grants will be made available to eligible businesses for the following:

  • $10,000 for employing businesses in metropolitan Melbourne and Mitchell Shire in recognition of spending longer under restrictions; or
  • $5,000 for employing businesses in regional local government areas (except Mitchell Shire)

Further information on eligibility criteria can be found here.

Instant asset write-off

The Instant Asset write off threshold has temporarily been increased from $30,000 to $150,000 for all businesses with an aggregated turnover of less than $500 million. On 9 June 2020, the measure was extended from its initial end date of 30 June 2020 to 31 December 2020, an additional 6 months. Further information regarding the instant asset write off can be found here.

Accelerated Depreciation

Under the Backing Business Investment incentive, eligible businesses are able to access accelerated depreciation deductions for the cost of new depreciating assets.

Businesses are eligible for the accelerated depreciation deduction if they have an aggregated turnover of less than $500 million in the year they are claiming the deduction. The accelerated depreciation deduction is available in the 2019–20 and 2020–21 income years.

Businesses can claim the deduction when lodging their tax return for the income year the asset is first used or installed ready for use for a taxable purpose.

To be eligible to apply the accelerated rate of deduction, the depreciating asset must:

  • be new and not previously held by another entity (other than as trading stock)
  • be first held on or after 12 March 2020
  • first used or first installed ready for use for a taxable purpose on or after 12 March 2020 until 30 June 2021
  • not be an asset to which an entity has applied the instant asset write-off rules or depreciation deductions.

There is no limit on the number of eligible assets that you can apply accelerated depreciation to in an income year.

The amount your entity can deduct in the income year the asset is first used or installed ready for use is:

  • 50% of the cost (or adjustable value where applicable) of the depreciating asset
  • plus the amount of the usual depreciation deduction that would otherwise apply but calculated as if the cost or adjustable value of the asset were reduced by 50%.

Effectively, together with the instant asset write-off rules, the accelerated depreciation deduction applies to assets with a cost (or adjustable value if applicable) of:

  • $150,000 or more in the 2019–20 income year
  • $150,000 or more if first used or installed ready for use for a taxable purpose prior to 1 January 2021 in the 2020–21 income year
  • $1,000 or more if first used or installed ready for use for a taxable purpose from 1 January 2021 in the 2020–21 income year.

For more information or assistance contact your Davidsons team member. Alternatively call us on 03 5221 6399 or email us at info@davidsons.com.au.

Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.