Coronavirus stimulus: round 2

Coronavirus stimulus

To further support businesses and workers ride out the COVID-19 pandemic and minimise the impact on the overall economy, the government has released a second round of stimulus in addition to the initial $17.6bn package. This $66.1bn package is not only aimed at businesses but also includes support for households (including casuals, sole-traders, retirees and those on income support). Cash payments to small to medium employers – tax-free payments of up to $100,000 (minimum payment of $20,000) will be available for eligible small and medium entities (SME), and not-for-profits with an aggregated annual turnover under $50m that employ people.

Temporary relief for directors of distressed businesses – threshold at which creditors can issue a statutory demand on a company will be temporarily increased to $20,000, and the time companies have to respond to those statutory demands will be extended to 6 months. Directors will also be provided temporary relief from any personal liability for trading while insolvent. SME loan guarantee scheme – “Coronavirus SME Guarantee Scheme” will guarantee 50% of new loans issued by eligible lenders. The scheme is able to support $40bn worth of lending to SMEs. Increase in job-seeker supplement – a new temporary Coronavirus supplement of $550 per fortnight will be implemented for 6 months for existing and new recipients of various Centrelink payments.

Further $750 for pensioners – a further $750 payment to social security and veteran income support recipients and eligible concession card holders will be provided. This does not apply to those receiving the temporary Coronavirus supplement (above). Payments will be made automatically from 13 July 2020. Superannuation early release allowed – individuals in financial distress as a result of the pandemic will be allowed to access a tax-free payment of up to $10,000 from their superannuation in 2019-20 and a further $10,000 in 2020-21.

Pension drawdown rate and social security deeming rate both reduced – the annual superannuation minimum drawdown requirements for account-based pensions and similar products will be reduced by 50% for 2019-20 and 2020-21. Deeming rates will be further reduced by another 0.25%. From 1 May 2020, the lower deeming rate will be 0.25% and the upper deeming rate will be 2.25%.

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