The 2nd Stimulus Package

The following is a broad summary of the key aspects of the Federal Government’s stimulus package in response to the Coronavirus, as recently announced and enacted.

In Summary

Business

• Tax-free payments up to $100,000 for small business and not-for-profit employers. An increase in the previously announced initial tax-free payments for employers to a maximum of $50,000. In addition to this, a second round of payments will be made up to a maximum of $50,000, accessible from July 2020. 
• Wages subsidy of up to 50% of an apprentice or trainee wage. Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage for up to 9 months from 1 January 2020 to 30 September 2020. The payments are accessible to businesses with less than 20 employees. 
• Increase and extension of the instant asset write-off. The depreciating asset instant asset writeoff threshold will be increased from $30,000 (for businesses with an aggregated turnover of less than $50 million) to $150,000.
• Accelerated depreciation deductions. A new time-limited 15-month investment incentive (available for eligible assets acquired from 12 March 2020 up until 30 June 2021) will also be introduced to accelerate certain depreciation deductions for businesses with an aggregated turnover below $500 million.

Individuals

• Early release of superannuation. Individuals in financial distress able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax-free and will not affect Centrelink or Veterans’ Affairs payments.
• Temporary reduction in minimum superannuation draw down rates. Superannuation minimum drawdown requirements for account based pensions and similar products reduced by 50% in 2019-20 and 2020-21.
• Deeming rates reduced. From 1 May, superannuation deeming rates reduced further to a lower rate of 0.25% and upper rate of 2.25%.
• Supplements increased, access extended and eased. For 6 months from 27 April 2020:
  • A temporary coronavirus supplement of $550 will be paid to existing income support recipients (people will receive their normal payment plus $550 each fortnight for 6 months).
  • A second one-off stimulus payment of $750 will be paid automatically from 13 June 2020 to certain income support recipients (in addition to the payment made from 31 March 2020).
  • Eligibility for access to income support eased to include sole traders and the self-employed, and to those caring for someone infected or in isolation.
  • Waiting periods and assets tests temporarily waived.