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  • Small Business Stewardship Group special briefing 7 April 2020

    COVID-19

    Boosting cash flow for employers

    The trigger to receive these payments for eligible businesses is the lodgment of the March quarter or March monthly activity statement. Eligible businesses with eligible payments will automatically receive a credit via the activity statement system.

    The cash flow boosts will be made from the Government’s announced date of 28 April 2020. Activity statements received before 28 April will be processed as normal without the boost applied. The boost will be paid on or after 28 April.

    As the cash flow boost is based on pay as you go (PAYG) withholding, businesses using contractors are not eligible for cash flow boosts unless they make voluntary withholding payments to contractors. This measure is targeted at employers.

    Accounting software providers are endeavouring to update software to calculate the cash flow boost. However, at this stage, the ATO cannot guarantee all providers will have software in place to correctly estimate the boost by 28 April.

    Members' comments

    Many business owners do not understand that the cash flow boost is a credit linked to their PAYG withholding. Communications need to be clear that the mechanism of boosting cash flow is through an automated credit via the activity statement system.

    Clarity is required regarding whether a refund arising from the cash flow boost credit will be offset against other pre-existing debts. The effect of the boost on pre-existing payment arrangements also requires clarification.

    Early release of superannuation

    The government made an announcementExternal Link on 4 April 2020 that, in line with changes being made for Australian citizens and permanent residents, certain temporary visa holders with work rights will also be able to access their Australian superannuation. More guidance will be communicated once the regulations are in place.

    The ATO application form will be available on myGov on 20 April 2020. Individuals can register their interest now and they will receive a reminder by SMS or email when the form goes live.

    Since our last meeting, the ATO confirmed with Treasury that citizens and permanent residents of New Zealand are eligible for this scheme under the existing criteria.

    Members' comments

    Employees with multiple superannuation accounts will only need to make one application on the system to claim early release across accounts they have registered with the ATO. When claiming across multiple accounts, an individual’s aggregate claim cannot exceed the maximum amount of $10,000 per financial year.

    The ATO noted that any changes to a superannuation fund’s product disclosure statements (PDS) to prevent payment under the early release of superannuation measure is a matter for the Australian Prudential Regulation Authority (APRA).

    JobKeeper Payments

    The legislation to give effect to the JobKeeper subsidy scheme is being considered by Parliament on Wednesday 8 April 2020.

    If legislation is enacted, JobKeeper payments are a temporary subsidy scheme to support business impacted by COVID-19. 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, and employers are able to top up the payment. Sole traders will also be able to apply for JobKeeper payments.

    JobKeeper payments will be paid to businesses by the ATO monthly on an arrears basis commencing in the first week in May.

    The ATO’s priority in managing this critical scheme is ensuring the right amounts go to the right employers in the right way while ensuring appropriate integrity and assurance mechanisms are in place.

    The ATO is conscious of the support small businesses and sole traders will need to access these payments. We understand there will be a diversity of personal circumstances in the small business market that will require tailored responses.

    Fact sheets and frequently asked questions (FAQs) about the scheme are published on treasury.gov.auExternal Link

    Members' comments

    It is necessary to clarify how the scheme will apply to sole traders paid by performance of contract rather than by fortnightly payments. These types of scenarios, and others, will be addressed as the ATO progressively updates our fact sheets and FAQs after the legislation is passed.

    There is uncertainty about businesses being asked to pay staff now while details about their eligibility are still subject to the passage of legislation. This is a risk for businesses already struggling for survival. The ATO and Australian Small Business and Family Enterprise Ombudsman will work together to develop communications to help clarify eligibility issues for small business.

    Employers with a large number of casuals may see a significant increase in their payroll expenditure based on JobKeeper payments. This may lead to increased costs relating to payroll tax and worker compensation levies.

    There may be some difficulty for businesses with previous losses due to other circumstances, such as the Townsville floods, to demonstrate a reduced turnover as a result of COVID-19. The ATO noted there is discretion built into the measure to cater for such circumstances.

    Only one partner can be nominated to receive a JobKeeper Payment along with any eligible employees, noting a partner cannot be an employee. Treasury has advised this is a policy matter and should be raised with government.

    ATO support tools

    Information about ATO measures and support for individuals and businesses impacted by COVID-19 can be found on ato.gov.au. This resource is regularly updated based on community and stakeholder feedback and questions. The ATO’s subscription service was recommended as a means of being alerted to key changes to content on ato.gov.au

    ATO CommunityExternal Link is another resource members can use and share with their networks, which includes featured COVID-19 questions with certified ATO responses.

    Members are encouraged to share the ATO’s Dealing with disasters helpline 1800 806 218, which can provide advice tailored to a business’s specific circumstances. This service is also available for those affected by drought, bushfire and flood. More staff have been deployed to ATO contact centres and they are open longer.

    There is a new working from home shortcut on the deductibility of working from home expenses.

    Additional COVID-19 resources shared by members

    A COVID-19 contact centre has opened as part of the business.gov.au helpline run by the Department of Industry Science, Energy and Resources. Businesses affected by the coronavirus can talk to dedicated customer representatives via phone, live chat or email. Further details of the contact centre can be found on business.gov.auExternal Link.

    Treasury has established a coronavirus unitExternal Link to liaise with peak bodies on COVID-19 issues.

    The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) provides COVID-19 information on its websiteExternal Link.

    Other matters of interest shared by members

    Currently, commercial leases are the focus of many calls being made to ASBFEO and the state-based Small Business Commissions.

    There are a lot of federal and state government websites providing COVID-19 information. Many of these resources are being updated at various rates which makes keeping up to date very difficult and adds to complexity.

    The differing definitions of key terms such as small business, sole-trader, individual and individual-in-business on different government websites remains an ongoing issue.

    Small businesses require more information regarding industrial relations matters on the Fair Work Commission website.

      Last modified: 07 May 2020QC 62532