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  • The Australian Government's economic response to coronavirus

    On 6 October 2020 as part of the 2020–21 Budget, the Government has announced it will establish a temporary new incentive for businesses to employ additional young job seekers called the JobMaker Hiring Credit.

    The JobMaker Hiring Credit is subject to the passage of law.

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    On 21 July 2020, the government announced its intention to extend the JobKeeper payment with some changes to the eligibility criteria and payment amounts. These changes do not impact JobKeeper payments for fortnights ending before 28 September 2020.

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    On 9 June 2020 the government announced that they will extend the enhanced instant asset write-off arrangements until 31 December 2020.

    On 10 June 2020 the Minister for Housing and Assistant Treasurer announced that they will set the PAYG instalment GDP adjustment factor as 0% for the 2020–21 financial year. The Commissioner will adopt the same PAYG instalment adjustment factor for GST instalments over the same period which is in line with past administration practice

    These measures are now law.

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    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 and are now law.

    JobMaker Hiring Credit

    On 6 October 2020 as part of the 2020–21 Budget, the government announced a new incentive for businesses to employ additional young job seekers called the JobMaker Hiring Credit. The JobMaker Hiring Credit will be administered by the ATO.

    Eligible employers will have access to a JobMaker Hiring Credit for each new job they create over the 12 months from 7 October 2020, for which they hire an eligible employee, for a maximum claim period of 12 months from their employment start date.

    Employers will register with us and make claims quarterly, with claims commencing in February 2021.

    This measure is subject to the passage of legislation.

    The JobMaker Hiring Credit will be:

    • $200 per week for each eligible employee aged 16 to 29.
    • $100 per week for each eligible employee aged 30 to 35.

    An employer cannot claim JobKeeper and JobMaker Hiring Credit at the same time.

    To be eligible, employers must:

    • hold an Australian Business number (ABN)
    • be up to date with their tax lodgement obligations
    • be registered for Pay As You Go (PAYG) withholding
    • be reporting through Single touch payroll (STP).

    Eligible employees must have worked an average of at least 20 hours-per-week over the quarter for the employer to qualify for the payment. Employees that start and/or stop employment during a quarter must meet a similar test based on the length of time in employment.

    For the employer to be eligible, new employees must be:

    • aged 16 to 35 years, and
    • in receipt of income support payments (such as JobSeeker Payment, Youth Allowance (Other), or Parenting Payment) for at least one of the three months before they were hired.

    Further eligibility conditions will apply to employers based on the employer's headcount and payroll on 30 September 2020. These conditions ensure that employers claim credits for additional jobs created rather than for replacing existing employees.

    We will provide further information on eligibility criteria and how employers can register for the JobMaker Hiring Credit as it becomes available.

    Enhancing the instant asset write-off

    The government has extended the instant asset write-off (IAWO) arrangements until 31 December 2020. This extension allows businesses more time to take advantage of the instant asset write-off enhancements. The IAWO threshold has been increased from $30,000 to $150,000 and access has expanded to include businesses with aggregated annual turnover of less than $500 million (up from $50 million).

    Timing

    This measure applies from 12 March 2020 until 31 December 2020, for new or second-hand assets first used, or installed ready for use in this timeframe.

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    Backing business incentive

    The government introduced 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 applies, with existing depreciation rules applying to the balance of the asset’s cost.

    See also:

    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 eligible assets first held on or after 12 March 2020 and first used or installed by 30 June 2021.

    Boosting cash flow for employers

    As announced on 22 March, the government 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

    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.

    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 – additional payment

    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 – additional payment

    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

    Individuals adversely financially affected by COVID-19 may be able to access some of their superannuation early. On 23 July 2020, the government announced the extension of the application period for the 2020–21 year to 31 December 2020. Eligible citizens and permanent residents of Australia and New Zealand can apply once online through myGov to access up to $10,000 of their superannuation in the 2020–21 financial year, between 1 July 2020 and 31 December 2020.

    Applications for the 2019–20 financial year closed on 30 June 2020.

    Temporary residents are not eligible to apply in the 2020–21 financial year.

    You will not need to pay tax on amounts released under COVID-19 early release of super and will not need to include these amounts in your tax return – amounts released under other compassionate grounds must be included.

    Accessing your super early:

    • will affect your super balance
    • may affect your future retirement income.

    You should consider seeking financial advice before applying for early release of super. Services Australia's Financial Information ServiceExternal Link can provide free, confidential financial information.

    Eligibility and timing

    Applications can be submitted online through myGov between 1 July 2020 and 31 December 2020 – applications close at 11:59pm Australian Eastern Standard Time (AEST) on 31 December 2020.

    It is important that you assess your eligibility accurately and honestly.

    See also:

    Temporarily reducing superannuation minimum drawdown rates

    The government 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

    More information

    For more information on the Australian Government’s economic response to coronavirus, visit treasury.gov.au/coronavirusExternal Link.

    Businesses can visit business.gov.auExternal Link to find out more about how the economic response complements the range of support available to small and medium businesses.

    Last modified: 06 Oct 2020QC 61758