Ask an accountant: what does the stimulus package mean for me?

Wednesday, 25 Mar 2020

The changes to everyday life and work right now during COVID-19 are a lot to take in. The news and information regarding government stimulus programs can be overwhelming and tricky to navigate, especially for the first time.  

We have called upon creative industries accountants Kavisha Kuruk of White Sky and Jacinta O'Connell of Calculated Matters to help explain the most recent government stimulus packages and how they might be relevant to APRA AMCOS members.

Please note that this information is current as of 25 March 2020, and we'll endeavour to keep members abreast on future announcements.

Support for individuals and households 
Kavisha Kuruk

There are a number of Government payments that have been announced for individuals. You’ll need to ensure you contact Centrelink as soon as possible to register and assess your eligibility.

  • Individuals affected by the coronavirus crisis can receive a temporary ‘coronavirus supplement’ at a rate of $550 per fortnight for six months.
  • Sole traders and casual workers who are currently earning less than $1,075 a fortnight will be eligible to receive this supplement also.
  • There will also be further support for households. Two separate $750 payments will be made available to social security, veteran and other income support recipients and eligible concession card holders. The first payment (which was announced as part of the first stimulus package) will be made from 31 March 2020 and the second payment will be made from 13 July 2020. The second payment will not be made to those eligible for the $550 fortnightly coronavirus supplement.

Temporary early release of superannuation: Individuals whose financial situation has been affected by the coronavirus crisis will be able to access up to $10,000 of their superannuation before 30 June 2020, and a further $10,000 after 1 July 2020. There are eligibility criteria which have to be met for this to apply to you. If you wish to check if you are eligible, please find out more here. Individuals will not need to pay tax on this money and it will not affect Centrelink payments

Help from the ATO: The ATO will work with affected businesses to defer tax payments by up to six months. If you’re managing your taxes yourself, you’ll need to contact the ATO directly to arrange these deferrals. If you work with an accountant, make sure to get in touch with them for assistance with this.

If you're an apprentice: Eligible employers can apply for a wage subsidy of 50% of the apprentice or trainees’ wages (up to $21,000) for 9 months from 1st January 2020 to 30th September 2020.

Boosting cashflow for employers
Jacinta O'Connell

This temporary cashflow measure provides up to $100,000 tax free to employers (with a minimum payment of $20,000) to eligible small and medium sized businesses (including not for profits). Businesses that employ workers and have a turnover of less than $50 million will be eligible.

The payment will be facilitated through a credit on the BAS from 28 April 2020. Eligible employers that withhold tax to the ATO on their employee’s wages will receive a credit of 100% of the tax withheld up to a maximum of $50,000, with a minimum of $10,000.

The same will apply to the July – October period, making up the total of $20,000 to $100,000 credit. Where this credit places the employer in a refund position, the ATO will deliver the refund within 14 days.

There are other stimulus measures for business including increasing the instant asset write-off increase from $30,000 to $150,000 and a NSW Government payroll tax concessions for 3 months. 

$250,000 loans have also been announced as part of the stimulus package for small to medium business enterprises.

What next?

With these options at your fingertips, Jacinta shared her advice:

It’s time to review your personal cashflow and cut out any unnecessary expenses.

Take a look at your cash reserves and do your sums – estimate how long you can live without an income.

Review your debts. Ring your bank. If you haven't renegotiated your mortgage rate in the last six months then do it now.  It’s a simple phone call and could save you thousands.

If you have premises, renegotiate your rent with your landlord. 

Do NOT to borrow against the equity in your home.

If you are worried about keeping a roof over your head, there is an expected Federal Government rent assistance package yet to be announced.  We are hopeful this is a welcome relief for both renters and mum and dad landlords.

Despite the Government’s announcement allowing access to $20,000 in super, do NOT be tempted to cash in your super early unless absolutely necessary. 

Ring the ATO. They are also offering a range of payment relief measures, but they require you to ask, none of their measures are automatically applied. Give them a call, they are being particularly understanding at the moment.

If you employ staff you don’t want to lose, look at options allowing them to access future annual leave, look at job-share between staff.  Or if you are a staff member, encourage your employer to look at ways to keep you on the books.

Remember you are not alone. We are all in this together.

To our members: a reminder that APRA AMCOS cannot provide financial advice to our members because everyone’s situation is different. However, we are happy to provide general guidance during these times.

Writers please contact our Writer Services team at writer@apra.com.au

Publishers please contact our Publisher Relations team at publisher@apra.com.au

A thank you to Australian Industry Music Network (AMIN), who support the industry across business matters.


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