Date posted: 24/03/2020

Federal Government coronavirus economic stimulus stage 2

The Federal Government has announced stage 2 of its economic plan to cushion the economic impact of the coronavirus (COVID-19) and help build a bridge to recovery.

Financial support for businesses

  • Establishing the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help get them through the impact of the COVID-19 – Government will guarantee 50% of new loans issued by eligible lenders to SMEs
  • Up to $715 million in support for the aviation industry.

Temporary relief for financially distressed businesses

  • Temporarily increasing the threshold at which creditors can issue a statutory demand on a company and to initiate bankruptcy proceedings against an individual
  • Increasing the time companies and individuals have to respond to statutory demands they receive
  • Temporary relief for directors from any personal liability for trading while insolvent and providing temporary flexibility in the Corporations Act 2001 to provide targeted relief from provisions of the Act to deal with unforeseen events that arise as a result of the Coronavirus health virus.

Boosting cashflow from employers

  • Further enhancing the payment to eligible small and medium sized employers, the payment will now be a minimum of $20,000 up to $100,000 and extended to eligible not-for-profits (including charities).
    • Small and medium sized business entities and not-for-profits with aggregated annual turnover under $50 million turnover that employ workers will be eligible for the payments
    • Payments will be linked to employee PAYG withholdings (payment will equal to 100% of salary and wages withheld, minimum from $2,000 to a maximum $50,000)
    • The payment will be available from 28 April 2020, is tax-free and will flow automatically through the ATO
    • An additional payment equal to the first payment will be made from 28 July 2020.

To support workers and households

  • Temporarily expanding eligibility to income support payments and establishing a new time-limited Coronavirus supplement to be paid at a rate of $550 per fortnight for the next 6 months – to be paid to both existing and new recipients of the Jobseeker Payment, Youth Allowance jobseeker, Parenting Payment, Farm Household Allowance and Special Benefit
  • In addition to the previous $750 payment announced, there will be a further $750 payment to social security and veteran income support recipients and eligible concession card holders except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement. This second payment will be made automatically from 13 July 2020. First payment will be made from 31 March 2020.
  • Early release of superannuation of up to $10,000 to individuals in financial stress as a result of COVID-19. Eligible individuals can apply online through myGov before 1 July 2020 and the amounts released will not be taxable and will not affect Centrelink or Veterans' Affairs payments
  • Temporarily reduce superannuation minimum drawdown rates for account based pensions and similar products by 50% for 2019-20 and 2020-21.
  • Reduce social security deeming rates.

The package of Bills implementing the Government's economic stimulus package has passed Parliament and received Royal Assent on 24 March 2020. Accordingly, the ATO has updated its COVID-19 webhub. The webhub provides links to easy-to-understand and detailed information about what people need to know or do in order to get access to the tax or superannuation COVID-19 measures.

During discussions with officials, the ATO’s COVID-19 webhub was described as the "central source of truth" for guidance on COVID-19 related measures – especially the COVID-19 frequently asked questions (FAQs) webpage. The ATO has informed us the COVID-19 FAQs page will be regularly updated. We strongly recommend readers and tax teams bookmark the FAQs webpage so it can be accessed easily for reference purposes.

ATO COVID-19 webhub

ATO’s ‘one stop shop’ for tax and super info on COVID-19 stimulus

Read more

Treasury website

Economic Response to the Coronavirus

Find out more