Government support available for businesses employing apprentices to combat impact of Coronavirus

The Federal Government has released information regarding the economic support package made available in response to the coronavirus outbreak.

This package includes numerous benefits that small and medium-sized businesses may be eligible to take advantage of.

Read below for an overview of what the Federal stimulus package means for your business below.

Federal Economic Stimulus Package

The Morrison Government has announced a $17.6 billion economic plan to support 6.5 million individuals and 3.5 million businesses, employees and households through this difficult period. The stimulus package intends to help businesses manage any short-term cash flow challenges they may encounter, support businesses employing apprentices and keep employees in their jobs.

Supporting apprentices and trainees

Small businesses who employ apprentices and/or trainees will be supported through employee wage subsidies. Eligible businesses can apply for a wage subsidy of 50 per cent of the apprentice’s wage for up to nine months from 1 January 2020 to 30 September 2020.

If an employer is not able to retain the apprentice during this time, the subsidy will be available to any new business that takes on the apprentice.

This measure will support up to 70,000 small businesses, employing 117,000 apprentices.

Boosting cash flow for employers

Eligible small and medium-sized businesses may receive a tax-free payment of up to $25,000 to cover the costs of employee wages and salaries. The minimum payment available will be $2,000, with the funds set to support cash-flow challenges faced by businesses with a turnover of less than $50 million who employ staff.

Increasing instant asset write-off

The instant asset write-off threshold has been increased from $30,000 to $150,000, while businesses with an aggregated turnover of less than $500 million now be eligible for the instant asset write-off threshold, up from $50 million.

The expanded instant asset write-off will be made available for assets purchased after 12 March and will be in place until 30 June 2020.

Backing business investment

A limited time 15-month investment incentive will be launched to support business investment and economic growth over the short term. Businesses with a turnover of $50 million or less can deduct 50 per cent of the cost of eligible assets on installation, with existing depreciation rules applying to the balance of the asset cost.

The backing business investment measure will be in place until 30 June 2021.

Stimulus payments for low-income Australians

A one-off payment of $750 will be made available to social security, veteran and other income support recipients and eligible concession card holders. This payment will be available once per individual (e.g. a person who qualifies for the payment in multiple ways will only receive one payment of $750).

This payment will be tax-free and will not count as income for recipients.

Support for coronavirus-affected regions

In addition to the previous measures, $1 billion has been set aside to support regions that are disproportionately affected by the economic impact of the Coronavirus, such as regions heavily reliant on tourism, agriculture or education.

As part of the support for coronavirus-affected regions, the Federal Government will assist businesses identify alternative export markets or supply chains and waive all fees and charges for tourism businesses that operate in the Great Barrier Reef Marine Park or Commonwealth National Parks.

Australian Taxation Office relief

The Australian Taxation Office (ATO) has also released measures to support businesses through this period.

Payment deferrals

Businesses who have been impacted by the coronavirus may be eligible for up to four-month deferrals for payments including tax, activity statements, FBT and excise payments.

Monthly GST credits

Businesses who operate on a quarterly reporting cycle may elect to move to a monthly cycle, allowing them to gain quicker access to GST refunds.

Businesses may change to monthly report at the start of a quarter only, which means any immediate changes will take effect from 1 April 2020.

Pay as you go instalments

Businesses may vary their pay as you go (PAYG) instalments to zero for the April 2020 quarter. Businesses may also be allowed to claim a refund for any instalments made for the September 2019 and December 2019 quarters.

Remitting interest and penalties

Where a business has been affected by the coronavirus, the ATO will consider remitting interest and penalties applied to tax liabilities incurred after 23 January 2020.

If you would like to find out more about support packages released by the Federal Government, please refer to the links below.

https://treasury.gov.au/coronavirus

https://www.ato.gov.au/Individuals/Dealing-with-disasters/In-detail/Specific-disasters/COVID-19/?page=1#Payment_deferrals

Additionally, if you wish to stay up to date on the latest developments relating to the coronavirus in Australia, click here.

16 March 2020