Yearly Archives 2020

ATO Release Details of JobKeeper & Cash Flow Boost

ATO release details of JobKeeper & Cash Flow Boost

The ATO have updated their website to include the rules, regulations and processes for businesses to access the JobKeeper & the Cash Flow Boost stimulus package. Contact Us if you’d like to apply

JobKeeper Payment

The government has introduced a $130 billion JobKeeper Payment scheme to support businesses significantly affected by the coronavirus to help keep more Australians in jobs.

The JobKeeper Payment is a subsidy for businesses to pay either:

  1. employees,
  2. sole traders
  3. 1 associate of closely held entities such as trusts and companies, $1,500 per fortnight, in order to stimulate the economy and keep people employeed.

Although the ATO has outlined what is required, actual enrollment for JobKeeper isn’t available until 20th of April, but getting your ducks in a row before then, will be of obvious benefit so that come 20th April your business is ready.

Cash Flow Boost Payment

The Cash Flow Boost payment (no less than $10,000 and no more that $50,000) is paid around 14 days after the due date of the March Quarterly BAS or March Monthly IAS depending on your reporting period.

 

Additional Cash Flow Boosts

Additionally eligible entities who received initial cash flow boosts will receive additional cash flow boosts between July to October 2020. These will be delivered in either two or four instalments, depending on your reporting period.

JobKeeper and Cash Flow Boost

All the ATO information on JobKeeper & Cashflow Boost are available here.

ATO Cash Flow Boost Link

ATO JobKeeper Link

The requirements for JobKeeper are the most complicated and will require proof of a 30% decline in revenue for business with turnover less than 1 Billion. Substantiating this 30% decline and registering eligible employees may seem overwhelming. You need to do your normal job of running a business, so let vTax Australia help you by contacting us today.

We will let you know, via our  news link above or via email if you contact us of any more information as it becomes available, including letting you know when you’re able to enroll for JobKeeper payments.

 

 

JobKeeper scheme legislation achieves royal assent

The JobKeeper scheme legislation achieves royal assent Legislation.  The new legislation establishes the JobKeeper scheme of wage subsidies in the form of payments made via employers has passed both houses of Parliament and has achieved royal assent.

JobKeeper

The bills concerned (the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 and the Coronavirus Economic Response Package Omnibus (Measures No. 2) Bill 2020) also amend the Fair Work Act 2009 to support the practical operation of the JobKeeper scheme, as well as other measures including the guarantee of lending to small and medium enterprises, and consequential amendments.

We now await the legislative instrument to be issued by the Treasurer that set’s out the details of how the JobKeeper package works in detail.  vTax Australia will keep you abreast as information becomes available. We are also waiting for a major change to the ATO website that will give in-depth details of how the ATO will administer all of the government’s stimulus packages, including its attitude towards the application of the anti-avoidance provisions.

The details of eligibility for particular payments as well as the amount of payments and the time when they are to be paid will be set out in the rules made by the Treasurer, so that arrangements can be modified appropriately in response to the impacts of COVID-19.

In the meantime, Treasury has issued Jobkeeper Payment — Information for Employers, fact sheet (pdf) as well as JobKeeper Payment — Information for employees fact sheet (pdf).

 

Pleasw contact us if you have any questions

Stimulus Payments to Households and Income Support Recipients

Stimulus Payments to Households and Income Support Recipients

 

 

Stimulus payments to households and Income Support Recipients

Stimulus payments to households and Income Support Recipients

Stimulus payments to households

Also provided a part of Stimulus payments to households and Income Support Recipients Package is the payment of the first economic support payment of $750 to approximately 6.6 million Social Security and Veterans’ income support recipients, Farm Household Allowance recipients, Family Tax Benefit recipients and holders of a Pensioner Concession Card, Commonwealth Seniors Health Card or Commonwealth Gold Card.
There will also be a second economic support payment of $750 to the above people who receive a qualifying payment or hold a qualifying concession card on 10 July 2020. This  second payment will not be paid to a person who receives, on 10 July 2020, the new Coronavirus supplement detailed below.

Additional supplement for income support recipients

Stimulus payments to households and Income Support Recipients Package also amends the Social Security legislation to provide financial assistance to people who are
affected by the COVID-19 crisis. Australians can claim Jobseeker payment or Youth Allowance (other) if they are an Australian resident (or exempt from the residence  requirements) and satisfy the requirements outlined in a legislative instrument. If qualified, a person receives the current rate of Jobseeker payment or Youth Allowance (other) along with a fortnightly supplement of $550 or such other amount determined by legislative instrument. The supplement is also available to existing recipients of Jobseeker payment, Youth Allowance (other), Parenting Payment, Special Benefit, and the Farm Household Allowance. The Minister for Families and Social Services may extend the supplement to other social security payments by legislative instrument should a need arise. The supplement is available for an initial six month period, commencing on 27 April 2020. The Minister for Families and Social Services may also extend the six-month period and extend the supplement to other social security payments, depending on how the current crisis unfolds. Recipients of Jobseeker payment or Youth Allowance (other) (which includes new and existing recipients) and Parenting Payment are also exempt from the assets test, liquid assets waiting period, ordinary waiting period, newly arrived resident’s waiting period and seasonal worker preclusion periods. The exemption from the newly arrived resident’s waiting period also applies to special benefit. The supplement and exemptions also apply to recipients of the Farm Household Allowance. Note that the date of effect for these measures is 27 April.

All information above was sourced from the  Australian Treasury 

Please contact us if you need any help understanding Stimulus payments to households and Income Support Recipients.

COVID-19 Sole Trader JobKeeper Payment

At vTax Australia we’ve had lot of calls regarding any COVID-19 Sole Trader JobKeeper Payment. Please message us or call 0410 184 596 if you require help registering. For a small fee of $5 we can register for you.

COVID-19 Sole Trader JobKeeper Payment

At the moment the Australian Federal Government are releasing new initiatives fast and hard. Here’s what we’ve found on the.

  • Sole traders may be eligible to receive the COVID-19 Sole Trader JobKeeper Payment if their turnover has reduced. Following registration by the eligible business, the Government will provide $1,500 per fortnight per eligible employee for a maximum of 6 months. This will support sole traders to maintain their income and connection with employees.

 

  • The Government is also temporarily expanding the eligibility criteria for the JobSeeker Payment to support sole traders if their income is negatively affected by the economic impact of the Coronavirus.

 

  • If you receive the JobKeeper Payment as a non-employing sole trader, this may affect your eligibility for payments from Services Australia as you must report your JobKeeper Payment as income.

 

Eligibility for COVID-19 Sole Trader JobKeeper Payment

Sole traders (including those who are self-employed or have employees) will be eligible for the subsidy if:

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
  • their business has a turnover of $1 billion or more and their turnover will  be reduced by more than 50 percent relative to a comparable period a year ago (of at least a month).

Self-employed individuals will be eligible to receive the COVID-19 Sole Trader JobKeeper Payment where they have suffered. Sole traders must elect to participate in the scheme. They will need to make an application to the Australian Taxation Office (ATO) and continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

Eligible sole traders with employees will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that sole trader – including part-time and stood down employees. To be eligible, the employee must be an Australian citizen, or the holder of a visa that would allow them to be eligible for the JobSeeker Payment, or a Special Category (Subclass 444) visa holder. Casual employees are not eligible for the JobKeeper Payment, except those employees who had been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020.

Eligible sole traders with employees who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

In circumstances where an employee is accessing support though Services Australia because they have been stood down or had their hours reduced and the employee will be eligible for the JobKeeper Payment, the employee should advise Services Australia of their change in circumstances online at my.gov.au or by telephone.

Where employees have multiple employers – only one employer will be eligible to receive the payment. The employee will need to notify their primary employer to claim the JobKeeper Payment on their behalf. The claiming of the tax free threshold will in most cases be sufficient notification that an employer is the employee’s primary employer.

Register your interest here and the ATO will send you more information when the new legislation is enacted and up and running

 

Payment process


Eligible for the COVID-19 Sole Trader JobKeeper Payment sole traders will be paid $1,500 per fortnight per eligible employee (which may include the individual themselves if they are self-employed). Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.  Where sole traders participate in the scheme, either they or their employees will receive this Payment in a number of different ways.

  • If the employee ordinarily receives $1,500 or more in income per fortnight before tax, the employee will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist the sole trader to continue operating by subsidising part or all of the income for themselves or for their employee(s).
  • If the employee ordinarily receives less than $1,500 in income per fortnight before tax, the sole trader must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If the employee has been stood down, the sole trader must pay the employee, at a minimum, $1,500 per fortnight, before tax.
  • If the employee was employed on 1 March 2020, subsequently ceased employment with the sole trader, and then has been re-engaged by the same eligible sole trader, the employee will receive, at 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.

Payments will be made to the sole trader monthly in arrears by the ATO.

The Australian Government’s economic response to Coronavirus

The Australian Government’s economic response to Coronavirus

Át vTax we’re trying to help people understand the Australian Government’s Economic Response to Coronavirus. If you need clarity on any of the provisions below please contact us.

The stimulus packages are contiually being refined, information in this post was sourced at https://treasury.gov.au/coronavirus

As part of the Australian Government’s Economic Response to Coronavirus, it has provided for the ATO to give administrative relief for some tax obligations for people affected by the coronavirus outbreak, on a case-by-case basis (see more here).

Economic Response to Coronavirus

On 30 March 2020, the government announced its Economic Response to Coronavirus and intention to provide businesses affected by COVID-19 with a subsidy to continue paying their employees.

The JobKeeper Payment is not yet law.

Find out more:

  • Information about the JobKeeper Payment
  • Register your interest in the JobKeeper Payment
  • Treasury information – Economic response to coronavirus

On 12 and 22 March 2020, the government announced measures to help the economy withstand and recover from the economic impact of COVID-19 (coronavirus). The following measures will be administered by the ATO.

The following measures are now law.

  • Enhancing the instant asset write-off
  • Backing business incentive
  • Boosting cash flow for employers
  • Temporary early release of superannuation
  • Temporarily reducing superannuation minimum drawdown rates

JobKeeper Payment

Another Australian Government’s Economic Response to Coronavirus is the temporary JobKeeper Payment, businesses significantly impacted by the COVID-19 (novel coronavirus) outbreak will be able to access a subsidy from the government of $1,500 per fortnight per employee for up to 6 months. This will allow them to keep paying their employees.

Eligibility

Employers
Self-employed individuals
Employees

Employers

Employers (including not-for-profits) will be eligible for the subsidy if:

their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30% compared to a similar period (of at least a month) last year
their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50% compared to a similar period (of at least a month).
Businesses subject to the Major Bank LevyExternal Link are not eligible for the subsidy.

Employers will need to:

  • To Register your interest so that the ATO will contact you when it is enacted, we can register you for a small fee of $5. Register with vTax now
  • apply to us
  • provide supporting information demonstrating a downturn in their business
  • report the number of eligible employees employed by the business on a monthly basis.

Eligible employers will receive the payment for each eligible employee that:

  • was on their books on 1 March 2020
  • continues to be engaged by that employer.

Self-employed individuals

Self-employed individuals will be eligible to receive the JobKeeper Payment if their turnover has reduced (or is expected to reduce) by 30% compared to a similar period (of at least a month)

Self-employed individuals will need to:

  • To Register your interest so that the ATO will contact you when it is enacted, we can register you for a small fee of $5. Register with vTax now
  • apply to us
  • provide supporting information demonstrating a downturn in their business

Employees
Eligible employees include:

  • full-time, part-time or long-term casuals (with their employer on a regular basis for at least 12 months) as at 1 March 2020
  • stood down employees of eligible employers on 1 March 2020
  • stood down employees re-engaged by a business that was their employer on 1 March 2020

Where employees have multiple employers:

  • Only one employer will be eligible to receive the payment.
  • The employee will need to notify their primary employer to claim the JobSeeker Payment on their behalf.
  • The employee’s claiming of the tax-free threshold will, in most cases, be sufficient evidence that the employer is the employee’s primary employer.

To be eligible, employees must be either an:

  • an Australian citizen
  • the holder of a permanent visa
  • a Protected Special Category Visa Holder
  • a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more
  • a Special Category (Subclass 444) Visa Holder.

If an employee has applied for support though Services Australia and the employer will be eligible for the JobKeeper Payment, the employee will need to advise Services Australia of their new income.

Payment process

The JobKeeper Payment will assist employers to continue operating by subsidising all or part of the employee’s income. We will make the payments to the employer on a monthly basis (in arrears).

Eligible employers will be paid $1,500 per fortnight per eligible employee.

Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax. Employers are able to top-up the payment.

  • Employees will receive $1,500 per fortnight (before tax) if they were
    • employed on 1 March 2020
    • ceased employment with their employer due to the effects of COVID-19
    • re-engaged by the same eligible employer.

Where employers participate in the scheme, their employees will receive the payment as follows:

  • If an employee’s income is normally $1,500 or more per fortnight (before tax) they will continue to receive their regular income according to their usual workplace arrangements.
  • If an employee’s income is less than $1,500 per fortnight (before tax), their employer must pay their employee $1,500 per fortnight (before tax).
  • If an employee has been stood down, their employer must pay their employee $1,500 per fortnight (before tax).

It will be up to the employer to decide whether to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Timing

The subsidy will apply from 30 March 2020.

Businesses will be able to register their interest in participating in the scheme from 30 March 2020.

The first payments will be received by employers in the first week of May.

Enhancing the instant asset write-off

Australian Government’s Economic Response to Coronavirus has  increased the instant asset write-off (IAWO) threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).

Timing

This proposal applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used, or installed ready for use in this time frame.

Enhancing the IAWO will require legislative changes before it can take effect.

Backing business incentive

Australian Government’s Economic Response to Coronavirus is introducing a time limited 15-month investment incentive to support business investment and economic growth over the short-term, by accelerating depreciation deductions.

A deduction of 50% of the cost of an eligible asset on installation will apply, with existing depreciation rules applying to the balance of the asset’s cost.

Eligibility

Eligible businesses are businesses with aggregated turnover below $500 million.

Eligible assets are new assets that can be depreciated under Division 40 of the Income Tax Assessment Act 1997 (that is, plant, equipment and specified intangible assets, such as patents). This does not apply to second-hand Division 40 assets, or buildings and other capital works depreciable under Division 43.

Timing

This applies to assets acquired after announcement and first used or installed by 30 June 2021.

Boosting cash flow for employers

As announced on 22 March, the Australian Government’s Economic Response to Coronavirus is providing up to $100,000 to eligible small and medium sized businesses and not-for-profits (including charities) that employ people, with a minimum payment of $20,000. These payments will help business and not-for-profit cash flow so they can keep operating, pay their bills and retain staff.

Small and medium sized business entities with aggregated annual turnover under $50 million and that employ workers are eligible. Not-for-profit entities (NFPs), including charities, with aggregated annual turnover under $50 million and that employ workers will now also be eligible. This will support employment activities at a time where NFPs are facing increasing demand for services.

Under the enhanced scheme, employers will receive a payment equal to 100% of their salary and wages withheld (up from 50%), with a:

  • minimum payment of $10,000
  • maximum payment of $50,000.

An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the total of all the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000, up to a total of $100,000 under both payments. This additional payment continues cash flow support over a longer period:

  • increasing confidence
  • helping employers to retain staff
  • helping entities to keep operating.

The cash flow boost provides a tax-free payment to employers. We will automatically calculate it.

Eligibility for Boosting Cash Flow for Employers payments

Australian Government’s Economic Response to Coronavirus allows small and medium sized business entities and NFPs with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.

We will deliver the payment as an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.

Eligible employers that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100% of the amount withheld, up to a maximum payment of $50,000.

Eligible employers that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax.

The payments will only be available to active eligible employers established before 12 March 2020. However, charities that are registered with the Australian Charities and Not-for-profits Commission will be eligible regardless of when they were registered, subject to meeting other eligibility requirements. This recognises that new charities may be established in response to COVID-19.

The first payments are within 14 days of the due date for lodgement of the activity statement. So March BAS’s are due 28th Apirl, and therefor you can expect the first payments no later than the 12th of May.

Eligibility for additional payment

To qualify for the additional payment, the entity must continue to be active.

Monthly activity statement lodgers

For monthly activity statement lodgers, the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment following the lodgment of their June 2020, July 2020, August 2020 and September 2020 activity statements (up to a total of $50,000).

Quarterly activity statement lodgers

For quarterly activity statement lodgers the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to half of their total initial Boosting Cash Flow for Employers payment following the lodgment of their June 2020 and September 2020 activity statements (up to a total of $50,000).

Timing of Boosting Cash Flow for Employers payments

The Boosting Cash Flow for Employers payment will be applied to a limited number of activity statement lodgments. We will deliver the payment as a credit to the entity upon lodgment of their activity statements. If this places the entity in a refund position, we will deliver the refund within 14 days.

Quarterly lodgers
Eligible period Lodgment due date
Quarter 3 (January, February and March 2020) 28 April 2020
Quarter 4 (April, May and June 2020) 28 July 2020
March 2020 21 April 2020
April 2020 21 May 2020
May 2020 22 June 2020
June 2020 21 July 2020
Monthly lodgers
Eligible period Lodgment due date
March 2020 21 April 2020
April 2020 21 May 2020
May 2020 22 June 2020
June 2020 21 July 2020

Quarterly lodgers will be eligible to receive the first payments for the quarters ending March 2020 and June 2020.

Monthly lodgers will be eligible to receive the first payments for the March 2020, April 2020, May 2020 and June 2020 lodgments. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300%) in the March 2020 activity statement.

The minimum payment will be applied to the entities’ first lodgment.

Timing of additional payment

The additional payment will be applied to a limited number of activity statement lodgments. We will deliver the payment as a credit to the entity upon lodgment of their activity statements. If this places the entity in a refund position, we will deliver the refund within 14 days.

Quarterly lodgers
Eligible period Lodgment due date
Quarter 4 (April, May and June 2020) 28 July 2020
Quarter 1 July, August and September 2020) 28 October 2020
Monthly lodgers
Eligible period Lodgment due date
June 2020 21 July 2020
July 2020 21 August 2020
August 2020 21 September 2020
September 2020 21 October 2020

Quarterly lodgers will be eligible to receive the additional payment for the quarters ending June 2020 and September 2020. Each additional payment will be equal to half of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

Monthly lodgers will be eligible to receive the additional payment for the June 2020, July 2020, August 2020 and September 2020 lodgments. Each additional payment will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment (up to a total of $50,000).

Temporary early release of superannuation

Another Australian Government’s Economic Response to Coronavirus is allowing individuals affected by the coronavirus to access up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments.

From mid-April 2020, eligible individuals will be able to apply online through myGov 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.

Eligibility

To apply for early release, you must satisfy any one or more of the following requirements:

  • You are unemployed.
  • You 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.
  • On or after 1 January 2020, either
    • you were made redundant
    • your working hours were reduced by 20% or more
    • if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.

How to apply

If you are eligible for this new ground of early release, you can apply from mid-April directly to the ATO through the myGov website: my.gov.auExternal Link. You will need to certify that you meet the eligibility criteria.

If you are a member of an APRA fund, after we have processed your application we will issue you with a determination. We will also provide a copy of this determination to your superannuation fund, which will advise them to release your superannuation payment. Your fund will then make the payment to you, without you needing to apply to them directly.

If you are a member of a self-managed superannuation fund (SMSF) who is eligible, you can apply through myGov from mid-April. We will then issue you with a determination advising of your eligibility to release an amount. When your SMSF receives the determination from you, they will be authorised to make the payment.

Timing

You will be able to apply for early release of your superannuation from mid-April 2020.

Temporarily reducing superannuation minimum drawdown rates

The Australian Government’s Economic Response to Coronavirus is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50% for 2019–20 and 2020–21. This measure will benefit retirees holding these products by reducing the need to sell investment assets to fund minimum drawdown requirements.

The government is also reducing both the upper and lower social security deeming rates by a further 0.25 percentage points in addition to the 0.5 percentage point reduction to both rates announced on 12 March 2020.

Superannuation changes

Age Default minimum drawdown rates (%) Reduced rates by 50% for the 2019–20 and 2020–21 income years (%)
Under 65

4

2

65 to 74

5

2.5

75 to 79

6

3

80 to 84

7

3.5

85 to 89

9

4.5

90 to 94

11

5.5

95 or more

14

7

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