Government Economic Stimulus Initiatives and Support
Information for business as at 23 March 2020
It is important to note that the information provided below is to be put before parliament today and consequently is yet to become law.
However, it is highly likely that the proposals will be accepted.
Employers are facing exceptional changes to the way of working and engaging with employees, and many employers are having to make colossal changes with little or no preparation.
The Fair Work Ombudsman (FWO) is regularly updating their dedicated webpage on Coronavirus and Australian workplace laws to provide general guidance to employers on managing this situation.
The advice reminds employers that the usual provisions of the Fair Work Act still apply.
The FWO does not have specific information or rules about how to prepare for this situation, although they are updating their information regularly to try to address the thousands of enquiries they are receiving.
Fair Work Ombudsman Guidance
The webpage covers general information on relevant topics:
- Health and safety in the workplace.
- Changing an employee’s regular roster or hours.
- Quarantine and self-isolation.
- Working from home.
- Redundancy and reduction of hours.
- Standing down employees without pay.
- And more – check the website for updates.
An employer can stand down an employee without pay “if they cannot be usefully employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible”.
Government orders requiring businesses to close would allow employers to stand down employees without pay.
This is distinct from making an employee redundant or otherwise terminating employment.
The employer must exercise caution and demonstrate that there is a genuine stoppage of work where the employee cannot be usefully employed in any role. If employees are stood down unlawfully, they may have the right to pursue unpaid wages.
It’s also important for employers to remember that as of today, all the Fair Work Act provisions are still enforceable, so always check with the FWO before making changes that could risk penalties later.
Employers – What You Need to do
- Make sure you have a tool for easy team communicationin place – consider apps like Slack, Asana or Microsoft Teams. Consider using an app that allows for video communications so that staff members can visually connect with each other every now and then.
- Provide staff with access to tools and technology to allow for efficient and transparent work while at home. Online tools such as Evernote, Wrike and Microsoft OneNote allow for management of files, projects and communications.
- Write a policy and plan for the business management of COVID-19 as soon as possible and provide to staff.
- Include information on working from home, productivity measures and expectations, workplace safety and ergonomic setup of home equipment, leave policies, flexible working, access to relevant technology and tools, online security and safety and any other procedures or polices relevant to your business and industry.
- Maintain communications with your employees throughout this challenging time. Particularly for those people who have not had to work from home on their own before, social isolation may be a big issue.
- Consider getting the advice of a human resources expert to get advice about how to monitor and manage productivity during this time, especially for people who may struggle with working from home for the first time.
- Continue to pay superannuation guarantee obligations – currently there is NO provision in the law to defer super guarantee contributions. If an employer is unable to pay super on behalf of employees, a superannuation guarantee charge statement will need to be lodged.
Some employees who have been made redundant or who have had work reduced by 20% or more (including sole traders), can access up to $20k of their superannuation.
Eligible individuals can apply online through their myGov account to access up to $10k of super before 1 July 2020, and another $10k in the following three months.
Minimum draw down requirements for some super pensions will be reduced by 50% for the 2020 and 2021 financial years.
Note that at this stage, superannuation guarantee obligations and deadlines continue to apply for employers.
Employers (less than 20 employees) with Apprentices or Trainees
Small employers are eligible for a subsidy of 50% of wages for nine months up, to $21k per apprentice/trainee.
State Revenue Taxesand Fees
Check your state’s Office of State Revenue for announcements about payroll tax relief.
Some states have already announced measures to waive obligations for eligible businesses for the 2020 financial year and reimburse payments already made.
Other taxes and license fees may also be waived or reimbursed.
Assistance for Small Business
Loans to Australian Small Businesses
From 23 March 2020, major Australian banks will begin to offer Australian small and medium sized businesses loans up to $250,000 with no repayments being required for six-months.
The loan structure will be similar to an overdraft facility for drawing down on, with no interest charged unless the money is used.
The Australian Government will be providing 50% guarantee for these unsecured loans.
Business owners need to lodge monthly and quarterly activity statements as usual, even if unable to make payment.
- Employers with a turnover of below $50m are eligible for a credit of up to $50k of PAYG withholding on the March activity statement, with a minimum payment of $10k for employers.
- If businesses lodge their AS by the due dates, and continue to be active in business, they will be eligible for a further $10k to $50k credit.
- Credits are automatically calculated by the ATO and are tax free.
- PAYG instalments can be varied to NIL from March and taxpayers that vary their PAYGI rate or amount can also claim a refund for any instalments paid for the September and December 2019 quarters.
- Penalties and interest applied since 23 January 2020 may be remitted
- Deferral of payments – including income tax and activity statement liabilities by up to six months.
- Existing and ongoing ATO debts may be eligible for low interest payment plans.
Temporary Insolvency Relief
The rules around trading insolvent will be relaxed for six months, allowing businesses affected by the Covid-19 situation to continue to trade.
The current minimum threshold for creditors issuing statutory demands on company directors will increase to $20k for six months. The time frame for such demands will also increase from the current 21 days to six months.
Sole traders without employees
Income support payment categories via Centrelink (such as JobSeeker, Youth Allowance and Parenting Payment) will receive an additional coronavirus support supplement for six months of $550 per fortnight.
Additionally, for the period of this supplement, the eligibility for these payment categories is expanding to include:
- Sole traders
- Self employed
- Casual workers
- Contract workers who meet the income tests as a result of the Coronavirus crisis
For the six-month period of this supplement, means testing will waived for JobSeeker payment, Youth Allowance and Parenting Payment.
The standard waiting times for these payments have been waived along with the liquid asset test waiting period and the seasonal work preclusion period.
The newly arrived residents waiting period will also temporarily waived for eligible recipients of the coronavirus supplement.
Sole traders should also note the provisions to vary PAYGI on your activity statement to NIL for the March quarter.
Refunds can also be sought for the September and December 2019 quarters.
Essential Links for Employers and Business Owners
There is a great deal of information being published, and we encourage you to stay updated with the official websites.