What lockdown support is available?

If you can't work because you or someone in your household is impacted by COVID-19, support is available.

There are two payments accessible to individuals: the COVID-19 Disaster Payment; and, the Pandemic Leave Disaster Payment.

How to apply for support

You can apply for the COVID-19 Disaster Payment or the top-up income support payment through your MyGov account if you have created and linked a Centrelink account. Apply for the Pandemic Leave Payment by phoning Services Australia on 180 22 66.

The COVID-19 Disaster Payment is a weekly payment available to eligible workers who can't attend work or who have lost income because of a lockdown and don't have access to certain paid leave entitlements. If you are a couple, both people can separately claim the payment.

Sole traders may apply for COVID-19 Disaster Payment if you are unable to operate your business from home. However, you will not be eligible if you are also receiving a state business grant such as the NSW 2021 COVID-19 Business Grant or JobSaver.

Timing of the payment

The disaster payment is generally accessible if the hotspot triggering the lockdown lasts more than 7 days as declared by the Chief Medical Officer (you can find the listing here). From 2 August 2021, payments will apply from day one of the lockdown and will be paid in arrears once claims open (previously, the payment only applied from day 8 of a lockdown).

However, the disaster payment will also be available:

·        In NSW from 18 July 2021, to anyone who meets the eligibility criteria. The requirement to be in a Commonwealth declared hotspot has been removed and the payment will apply to anyone in NSW impacted by the lockdowns who meets the other eligibility criteria.

·        In Victoria from 15 to 27 July 2021, to anyone who met the eligibility criteria. The requirement to be in a Commonwealth declared hotspot was removed and the payment applies to anyone in Victoria impacted by the lockdowns who met the other eligibility criteria.

*Payment accessible from 23 July 2021 paid in arrears from 15 July 2021 (day 1 of the lockdown).

How much is the payment?

The COVID-19 disaster payment amount available depends on:

·        How many hours of work you have lost in the week, and

·        If the payment is on or after the third period of the lockdown.

* Eligible Victorians received the higher rate from week one of the lockdown

** These higher rates will apply from day one of any potential lockdown in the future

The payment applies to each week of lockdown you are eligible and is taxable (you will need to declare it in your income tax return).

Eligibility

The COVID-19 disaster payment is emergency relief. It is available if you:

·        Live or work in an area that is subject to a state or territory public health order that imposes restriction on movement and is declared a Commonwealth COVID-19 hotspot, or

·        Have visited an area that is a Commonwealth COVID-19 hotspot and you are subsequently subject to a restricted movement order when you return to other parts of New South Wales or interstate.

And you:

·                  Are an Australian citizen, permanent resident or temporary visa holder who has the right to work in Australia, and

·                  Are aged 17 years or over, and

·                  Have lost 8 hours or more of work or a full day of your usual work as a result of the restrictions - losing work includes being stood down by your employer, not being assigned any shifts for the week of restrictions and being unable to work from home. Losing a full day of what you were scheduled to work but could not work because of a restricted movement order includes not being able to attend a full-time, part-time or casual shift of less than 8 hours, and

·                  Don't have paid pandemic-related leave available through your employer (annual leave is not taken into account for this), and

·                  Are not receiving income support payments, a state or territory pandemic payment, Pandemic Leave Disaster Payment or state small business payment for the same period. See 'Top up' payments for those on income support below. Income support payments include Age Pension, Austudy, Carer Payment, Disability Support Pension, Farm Household Allowance, JobSeeker Payment, Parenting Payment, Partner Allowance, Special Benefit, Widow Allowance, Youth Allowance and Income Support Supplement, Service Pension or Veteran Pension from the Department of Veterans' Affairs.

A liquid assets test of $10,000 previously applied to the disaster payment but was removed from Thursday, 8 July 2021.

'Top up' payments for those on income support

A special separate $200 'top-up' payment will be made to those who currently receive an income support payment through social security, in addition to their existing payment, if they can demonstrate they have lost more than 8 hours of work and meet the other eligibility requirements for the COVID-19 Disaster Payment.

The Pandemic Leave Disaster Payment is for those who have been advised by their relevant health authority to self-isolate or quarantine because they:

·        Test positive to COVID-19;

·        Have been identified as a close contact of a confirmed COVID-19 case;

·        Care for a child, 16 years or under, who has COVID-19; or

·        Care for a child, 16 years or under, who has been identified as a close contact of a confirmed COVID-19 case; or

·        Care for a person who has tested positive to COVID-19.

How much is the payment?

The payment is $1,500 for each 14 day period you are advised to self-isolate or quarantine. If you are a couple, you both can claim this payment if you meet the eligibility criteria.

Eligibility

The Pandemic Leave Disaster Payment is available if you:

·        Are an Australian citizen, permanent resident or temporary visa holder who has the right to work in Australia; and

·        Are aged 17 years or over; and

·        Are unable to go to work and earn an income; and

·        Do not have appropriate leave entitlements, including pandemic sick leave, personal leave or carers leave; and

·        Are not getting any income support payment, ABSTUDY Living Allowance, Paid parental leave or Dad and Partner Pay. Income support payments include Age Pension, Austudy, Carer Payment, Disability Support Pension, Farm Household Allowance, JobSeeker Payment, Parenting Payment, Partner Allowance, Special Benefit, Widow Allowance, Youth Allowance and Income Support Supplement, Service Pension or Veteran Pension from the Department of Veterans' Affairs.

The payment is taxable and you will need to declare it in your income tax return.

If you are uncertain of your eligibility, talk to Services Australia.

If you are concerned about the impact of disaster relief payments on you, talk to us.

From 19 July 2021, the Government is enabling childcare services in NSW Local Government Areas subject to stay at home orders to waive gap-fees for parents keeping their children at home due to current COVID-19 restrictions. The gap fee is the difference between the Child Care Subsidy (CCS) the Government pays to a service and the remaining fee paid by the family.

The child-care gap fee waiver is only applicable where the childcare service opts in.

The Local Government Areas were expanded and now cover: City of Sydney, Municipality of Woollahra, City of Randwick, Municipality of Waverley, Bayside Council, Blacktown City Council, Blue Mountains City Council, Municipality of Burwood, Camden Council, Central Coast Council, City of Campbelltown, City of Canada Bay, City of Canterbury-Bankstown, Cumberland City Council, City of Fairfield, George's River Council, City of Hawkesbury, Hornsby Shire, Municipality of Hunter's Hill, Inner West Council, Ku-ring-gai Council, Lane Cove Council, City of Liverpool, Mosman Council, North Sydney Council, Northern Beaches Council, City of Parramatta, City of Penrith, City of Ryde, Shellharbour City Council, Municipality of Strathfield, Sutherland Shire, The Hills Shire, Wollondilly Shire, City of Willoughby, and Wollongong City Council.

NSW Eviction moratorium

The NSW Government has introduced a targeted eviction moratorium to protect residential tenants. The moratorium applies where:

·                  You have lost work/income because they or a member of their household contracted COVID; or 

·                  The  household's take home weekly income has reduced by 25% or more (including any government assistance received) compared to the weekly income received in the 4 weeks prior to 26 June 2021; and

·                  You continue to pay at least 25% of the rent payable.

60 day freeze on evictions

Tenants who can't pay their rent in full because they are impacted by the COVID-19 outbreak can't be evicted between now and 11 September 2021.

Financial support for landlords

Residential landlords who decrease rent for impacted tenants can apply for a grant of up to $1,500 or land tax reductions depending on their circumstances. The land tax relief will be equal to the value of rent reductions provided to financially distressed tenants for up to 100% of the 2021 land tax year liability.

The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information.  

Hospitality & Tourism COVID-19 Support Grant

The NSW Government has announced new grants of up to $10,000 to aid businesses impacted by the recent COVID-19 restrictions.

The grant is available to tourism or hospitality businesses with:

• A NSW registered ABN or ability to demonstrate they are physically located and primarily operating in NSW
• Turnover of more than $75,000 per annum
• Annual Australian wages below $10m as at 1 July 2020

These criteria are a bit more generous than the general Small Business COVID-19 Support Grant which is restricted to business and sole traders with:

• Total Australian wages below the NSW Government 2020-21 payroll tax threshold of $1.2m
• Fewer than 20 full time equivalent employees

The value of each grant is determined by the impact of the COVID-19 restrictions on your turnover. Your business will need to prove a decline in turnover across a minimum 2 week period after the commencement of the major restrictions on 26 June 2021.

Applications for the grants can be submitted through Service NSW from late July and we will be in contact with you once the full details and eligibility criteria are released.

We are happy to offer any assistance and support that you may require including calculating and providing proof of the decline in turnover and ongoing assistance with the application. If any of your business associates are also in need of assistance feel free to also put them in touch with us and we will assist. 

Payroll Tax Deferral

To assist with the impact of COVID-19, businesses can apply to defer payroll tax payments due in July 2021. Revenue NSW will provide a repayment program on a case-by-case basis if you wish to apply.

In addition, the due date for lodgement and payment of the 2021 annual reconciliation has been extended to 30 August 2021.

JobKeeper from 28 September 2020

We have summarised the key details in this update please download here. 

The first tranche of JobKeeper ends on 27 September 2020. Those needing further support will need to have their eligibility reassessed and prove an actual decline in turnover.

To receive JobKeeper from 28 September 2020, eligible employers need to assess their decline in turnover with reference to actual GST turnover for the September 2020 quarter (for JobKeeper payments between 28 September to 3 January 2021), and again for the December 2020 quarter (for payments between 4 January 2021 to 28 March 2021).

From 28 September 2020, the JobKeeper payment rate will reduce and split into a higher and lower rate based on the number of hours the employee worked in a specific 28 day period prior to 1 March 2020 or 1 July 2020.

To access JobKeeper payments from 28 September 2020, there are three questions that need to be assessed:

1.      Is my business eligible?

2.      Am I and/or my employees eligible? and

3.      What JobKeeper rate applies?

Please contact our office if you would like assistance with this 02 8848 3000.

What to do when reopening your business

As many business owners look to life after COVID-19, an important question comes up: how do we plan to reopen our business? For most businesses, the easing of restrictions doesn't mean a return to business as usual. 

There are rules and regulations in place about how companies can operate, including how many people can be on their premises at one time and how employees must be protected. Customers may not come back quickly and supply chains may still be disrupted.

Your main goal is to keep your business going after COVID-19, but reopening requires careful planning.

Here are some tips for restarting your business. 

1. Examine your business model 

Many small business owners have expertise that could go into consulting. If you own a restaurant, you could consult with new restaurant owners on setting their menu or hiring staff. You could also create passive income by writing eBooks or running courses related to your specialty.  

2. Have a safety plan and procedures in place

3. Access funding and financial programs

Even with restrictions easing, customers may not be eager to return to your business, for a variety of reasons. Many people now have limited incomes and are concerned about safety measures. It could take a while for your income to balance out.

Local, regional and federal governments have programs available for small businesses. Additionally, financial institutions and local businesses that represent business interests may also have financial programs you can access to help you through the turmoil caused by COVID-19. 

Final thoughts

What's next for you and your business? If you'd like to chat about future-proofing your business, please get in touch with us today on 02 8848 3000.

Extension of the $150,000 threshold for the instant asset write-off rules

As announced earlier last week, the Government is planning to extend the $150,000 instant asset write-off threshold for a further 6 months until 31 December 2020. This means that the higher threshold can apply to assets that are first used or installed ready for use for a taxable purpose on or after 12 March 2020 and by 31 December 2020 (assuming all other basic conditions are satisfied).

The Bill also extends the temporary suspension of the 5 year lock-out rules that can apply when an SBE chooses not to use the simplified depreciation rules. The suspension of these rules will be extended to 30 June 2021.

Modifications will also be made to the rules for entities that have a substituted accounting period to improve access to the higher instant asset write-off thresholds. The way these rules are currently drafted has meant that entities with a year-end other than 30 June have not had the same level of access to the rules as entities using a standard 30 June year-end date.

The HomeBuilder scheme targets the residential construction market by providing tax-free grants of $25,000 to eligible owner-occupiers, including first home buyers, to build a new home or substantially renovate their existing home.

The grants will be distributed by the revenue office of the State or Territory where you live or plan to live.

There are a few complexities to this grant that both home builders/renovators and the building industry need to be across before jumping in and signing a new contract on the expectation that the grant will apply.

Eligibility

Eligibility criteria apply to the individuals applying for the grant and the building project:

Individual eligibility

The HomeBuilder scheme is available to owner occupiers including first home buyers. It is not accessible to owner builders, developers or investors.

To be eligible you need to be:

• An individual (not a company or trust); and
• 18 years of age or older; and
• An Australian citizen.

And, you need to meet the income test. To be eligible, you cannot earn more than:

• Individuals - $125,000 based on your 2018-19 or later tax return
• Couples - $200,000 based on both of your 2018-19 or later tax returns

The building project eligibility

The building contract must be signed between 4 June 2020 and 31 December 2020. And, the construction or renovation must commence within three months of the contract date.

The grants are available if you build a new home or renovate a home to live in (your principal place of residence) where:

* house, apartment, house and land package, off-the-plan, etc.

** renovation works must be to improve the accessibility, safety and liveability of the dwelling. It cannot be for additions to the property (such as swimming pools, tennis courts, outdoor spas and saunas, sheds or garages (unconnected to the property)).

If you own or have purchased land but have not signed a contract to build your home, you may meet the eligibility criteria if you:

• Own a property (house and land), and knock down the house to rebuild – this will be counted as a substantial renovation, and therefore subject to the renovation price range of $150,000 to $750,000 provided the total value (house and land) of the property does not exceed $1.5 million pre-renovation;
• Own vacant land before 4 June 2020, and then build, the total value of the land and new build cannot exceed $750,000; or
• Buy the land after 4 June 2020, and then build, the total value of the land and build cannot exceed $750,000.

Integrity measures and pricing

Building contracts must be at arms-length, that is, the parties cannot be related or connected.

Renovations or building work must be undertaken by a registered or licenced building service 'contractor' (depending on the state or territory you live in) and named as a builder on the building licence or permit.

When it comes to price, the terms should be commercially reasonable, and the contract price should not be inflated compared to the fair market price. The rules enable the purchaser to request that the builder demonstrate that the contract price for the new build or substantial renovation is no more than a comparable product (measured by quality, location and size) as at 1 July 2019.

Interaction with first home owner grant schemes

The HomeBuilder grant does not exclude first home buyers from accessing other grants and concessions such as the First Home Owner Grant, stamp duty concessions, the First Home Loan Deposit Scheme, and First Home Super Saver Scheme.

Problem areas

As the building contract is entered into before the grant is approved, it will be important that the grant is not essential to finance the building project, just in case the grant is not approved.

In addition, as the builder needs to commence work within three months of the contract date, it will be important to ensure that the contract recognises the commencement dates.

Code of conduct for commercial tenancies

The Prime Minster has announced that the states and territories will legislate a mandatory code of conduct for commercial tenancies – see National Cabinet Mandatory Code of Conduct.

The code applies where:

• The landlord or tenant is eligible for the JobKeeper program, and
• They have a turnover of $50 million or less.

The code brings together a set of good-faith leasing principles. Landlords must not terminate the lease or draw on a tenant's security and tenants must honour the lease.

Landlords will be required to reduce rent proportionate to the trading reduction in the tenant's business, through a combination of waivers of rent and deferrals of rent over the "pandemic period." Waivers of rent must account for at least 50% of the reduction in the rental provided to the tenant during that period and deferrals must be covered over the balance of the lease term and in no less period than 24 months.

The arrangements are overseen through a binding mediation process at state and territory level.

Residential landlords and tenants

Most states and territories have introduced rules to ensure that tenants facing COVID related financial distress are not evicted for rental arrears.

Rent remains due, however landlords are encouraged to negotiate either a rent reduction to some degree or waiver where possible – for example, the landlord has a mortgage and has received a freeze on mortgage payments.

Most state and territory governments have free mediation services in place to manage disputes.

New South Wales

The NSW Government is introducing an interim 60-day stop on landlords seeking to evict tenants due to rental arrears as a result of COVID-19, together with longer six month restrictions on rental arrears evictions for those financially disadvantaged by COVID-19.

A household is COVID-19 impacted if:

·        One or more rent-paying members of a household have lost employment or income (or had a reduction in employment or income) due to COVID-19 business closures or stand-downs, or

·        One or more rent-paying members of a household have had to stop working or reduce work hours due to illness with COVID-19 or due to COVID-19 carer responsibilities for household or family members, and

·        The above factors result in a household income (inclusive of any government assistance) that is reduced by 25% or more.

Notice periods for certain other lease termination reasons will be extended to 90 days.

All other tenants not impacted by COVID 19 are expected to honour their existing tenancy agreements.

See Six month moratorium on residential tenancy evictions during COVID-19.

ATO releases JobKeeper alternative test

The alternative tests will only kick in if an entity cannot satisfy the basic decline in turnover test.

These include where an entity commenced business after the relevant comparison period in 2019 or the business did not exist in the relevant comparison period and as a result there was no relevant comparison period in 2019.

It will also cover a circumstance where an entity acquired or disposed of part of their business after the relevant comparison period in 2019, and where an entity has restructured part or all of their business after the relevant comparison period in 2019.

Entities who had an increase in turnover by 50 per cent or more in the 12 months immediately before the applicable turnover test period, or 25 per cent or more in the six months immediately before the applicable turnover test period, or 12.5 per cent or more in the three months immediately before the applicable turnover test period, will also be covered.

The alternative test will also cover entities affected by a drought or other natural disaster in the relevant comparison period in 2019, and entities who have an irregular turnover that is not cyclical, such as what can occur in the building and construction sector.

A sole trader or a small partnership where the sole trader or one of the partners did not work for all or part of the relevant comparison period because they were sick, injured or on leave during the relevant comparison period, and those circumstances affects the turnover of the sole trader or partnership, will also be covered.

Each of the seven circumstances has its own alternative test that is detailed in the legislative instrument.

Update from Accountants Daily

Automatic ATO lodgement and payment deferrals 

The Tax Office will now apply automatic lodgement and payment deferrals for company 2018–19 income tax returns to a new due date of 5 June 2020.

Further, SMSF 2018–19 annual returns will now be due on 30 June 2020.

2019–20 fringe benefits tax (FBT) annual returns have also been automatically deferred to 25 June 2020.

2018–19 income tax returns for individuals, partnerships and trusts can be lodged by the 5 June concessional due date, provided clients pay any liability by this date.

What is an Instant Asset Write-off?

The instant asset write-off allows small to medium-sized businesses to claim immediate deductions for plant and equipment asset purchases (both new and second-hand). Equipment includes vehicles, tools, machinery and office equipment. The asset must be installed and/or used in the income year you're claiming for.

How much can I write-off?

Originally the maximum threshold was $30,000 but now this has been increased to $150,000 for businesses with aggregated annual turnover between $50m-$500m. The write-off threshold is dependent on your annual turnover. This applies from 12 March 2020 until 30 June 2020, for new or second-hand assets first used or installed ready for use in this timeframe.

The higher Instant Asset Write-Off (IAWO) threshold provides cash flow benefits for businesses that will be able to immediately deduct purchases of eligible assets each costing less than $150,000. The threshold applies on a per asset basis, so eligible businesses can immediately write-off multiple assets.

Eligibility to use instant asset write-off depends on:

• Aggregated turnover (the total ordinary income of your business and that of any associated businesses)

• Date the asset was purchased and when it was installed or first used

• Cost of each asset being less than the threshold.

From 1 July 2020 the instant asset write-off will only be available for small businesses with a turnover of less than $10 million and the threshold will be $1,000.

Businesses with a turnover of $500 million or more are not eligible to use instant asset write-off.

Find more information and apply here: https://www.ato.gov.au/Business/Depreciation-and-capital-expenses-and-allowances/Simpler-depreciation-for-small-business/Instant-asset-write-off/