Coronavirus (Covid-19) - Assistance Available for Sole Traders
Federal and State Government Assistance for Sole Traders
What stimulus support is available for you?
The federal government has announced a number of stimulus initiatives to support businesses during the COVID-19 pandemic, but there has been some confusion around what support is provided to sole traders and freelancers.
Our Accounting team - Gavin, Cheryl, Melissa and Sandra - have been closely following the measures brought in on both a federal and state level. We understand that there's information overload out there at the moment, so we have condensed this information into an easy and accessible format for you.
If you have any questions about any of the following information, please contact us on (08) 9071 2173 or email us at email@example.com (or you can email your Client Manager direct), to discuss how these initiatives apply to you.
1. You may be able to defer your loan repayments.
The Australian Banking Association has announced that Australian banks will defer loan repayments for small businesses affected by COVID-19 for 6 months.
2. The SME Guarantee Scheme may assist you to access additional funding.
Under the Coronavirus SME Guarantee Scheme, the Government will provide a guarantee of 50 per cent to small and medium enterprise (SME) lenders for new unsecured loans to be used for working capital. This will enhance these lenders’ willingness and ability to provide credit, which will result in SMEs being able to access additional funding to help support them through the upcoming months.
SMEs with a turnover of up to $50 million will be eligible to receive these loans.
3. You may wish to access the increased instant asset write-off.
The instant asset-write off is a really good way for small businesses to purchase assets to help grow your business while simultaneously reducing your taxable profits.
As per the business.gov.au website, under normal circumstances, individual assets less than $30,000 are eligible for the instant asset write off. The Government has lifted this threshold to $150,000 for assets that are either installed or ready for first use by 30 June 2020.
Some of the assets you can claim include:
Cars, work vans and utes
Technology such as computers, laptops or tablets
Fittings and fixtures at your business premises
Point of Sale devices and cash registers
Plant and machinery for your trade
Talk to us about how the instant asset-write off may benefit your business during this time.
4. You may be able to access the Jobseeker Payment and the Coronavirus Supplement.
Sole traders, the self-employed and anyone impacted by the economic downturn triggered by the Coronavirus will be able to access the Jobseeker payment and the Coronavirus supplement.
To access, applicants will need make a declaration to Centrelink that their business has been suspended or had turnover reduced significantly (>20%) as a result of the downturn.
Sole traders eligible for the Jobseeker payment will automatically meet their mutual obligation requirements during this period by continuing to run and sustain their business, the payment is income tested to account for continued trade. If they earn less than $1,000 per fortnight through their business, they can receive the Coronavirus supplement and still continue to trade, where possible.
5. More about the Coronavirus Supplement Payments.
The Coronavirus supplement will be paid for the next six months commencing 27 April 2020 to eligible income support recipients. The $550 (per fortnight) Coronavirus supplement will 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 current payments to these recipients.
The Government will also temporarily waive the asset test and waiting periods to access the payment.
Also from 27 April 2020, access to payments will become easier with a temporary removal of the requirement for an Employment Separation Certificate, proof of rental arrangements and verification of relationship status.
6. You may be able to access the $750 one-off payments.
The first of two $750 payments will be made from 31 March 2020 to people residing in Australia and who are social security, veteran and other income support recipients and eligible concession card holders between 12 March 2020 and 13 April 2020 (inclusive).This includes those on Newstart, those who have Commonwealth eniors health cards, and families receiving family tax benefits. (Around half of those that will benefit are pensioners).
A second round of $750 payments will be made automatically from 13 July 2020 to around five million social security, veteran and other income support recipients and eligible concession cardholders, to social security and veteran income support recipients and eligible concession cardholders who were eligible for the first round of the $750 payment on 10 July 2020.
This extra payment will not be available if you get the $550-a-fortnight Coronavirus supplement.
7. You may want to apply for Temporary Early Release of Superannuation.
Individuals impacted by COVID-19 can get access up to $10,000 of their superannuation in 2019–20 and a further $10,000 in 2020–21.
To prove financial distress individuals must satisfy any one or more of the following requirements:
You are unemployed;
You are eligible to receive a job seeker payment, youth allowance for Jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance;
On or after 1 January 2020, either:
a) you were made redundant;
b) your working hours were reduced by 20% or more;
c) if you are a sole trader, your business was suspended or there was a reduction in your turnover of 20% or more.
Applications must be made via the myGov account and the ATO will issue a determination to the person and their superfund allowing for the early release of their superannuation from mid-April. Importantly the amount drawn down will not be taxable.
8. There will be additional assistance for affected regions, communities and industries.
The Government have identified the need to provide additional support for the regions, communities and industries that have been disproportionately affected by the economic effects of COVID-19, particularly:
The $1 billion will be provided through existing or newly established Government programs. It will include additional assistance to help businesses identify alternative export markets or supply chains where applicable. Targeted measures will also be developed to further promote domestic tourism.
Happy to help.
We are happy to assist you with any questions you may have about what support is available to you during the COVID-19 pandemic. Please contact us on (08) 9071 2173 to schedule a call with your Client Manager, or you can email us at firstname.lastname@example.org.