The COVID-19 pandemic has placed unprecedented pressure on Australian business owners, with those who fall within ‘essential service’ category having to pivot or re-engineer their businesses in order to remain operational.
As a result, many Australian business owners have been thrown into survival mode and are seeking support and strategies for weathering the impact of COVID-19.
If your business is struggling to survive, you’re probably wondering what support is available to you, and what it means to your business in real terms.
We understand that it can be overwhelming trying to navigate the information on the government COVID-19 initiatives, as such we have compiled summaries to assist.
Understanding the Australian Government’s JobKeeper payment
WHAT is the JobKeeper payment?
A wages subsidy paid to eligible employers on a fortnightly basis at a flat rate of $1,500.
WHEN does the JobKeeper program start and finish?
Businesses will be eligible from 30 March 2020 to 27 September 2020 with payments made monthly by the ATO to a nominated bank account.
The first payment will start from the first week of May 2020.
WHO is eligible for the JobKeeper payment?
Businesses with eligible employees and an aggregated turnover of $1-billion (for GST purposes) who have/will suffer a 30% or more downturn in revenue.
Employees as at 1 March 2020, who were employed either on full time, part time or long-term casual basis (>12 months and regular and systematic)
WHAT are my reporting obligations under the JobKeeper payment?
Businesses need to notify the ATO that they elect to participate in this scheme (after 20 April 2020).
Businesses will need to complete a JobKeeper Employee Nomination Notice to notify their employees that they are participating in the scheme and ask the employees to agree to be nominated.
Businesses will also need to notify the ATO within seven days at the end of each month the entitlement for each employee per fortnight that includes employees’ details, current GST turnover for the relevant month and projected GST turnover for the following month.
WHAT should I do if I want to apply for the government's JobKeeper payment?
Understanding the Australian Government’s Cashflow Boost grant
WHAT is the Cashflow Boost grant?
Tax-free payments of up to $100,000 for eligible small and medium businesses based on their PAYG withholding obligations.
WHO is eligible for the Cashflow Boost grant?
Businesses with less than $50-million turnover based on prior financial year.
Businesses with an ABN and employees as at 12 March 2020.
Businesses that have made payments to employees subject to withholding (e.g. salary, rates or director fees).
Businesses that have, on or before 12 March, lodged at least one of:
- A 2018/19 income tax return showing you had an amount included in your assessable income in relation to you carrying on a business
- An activity statement or GST return for any tax period after 1 July 2018 (& before 12 March 2020) that you made a taxable, GST-free or input taxed sale.
NB: Multiple entities within a group may be eligible.
How to help your business survive COVID-19: Financial Survival Tips
As business owners, how often do we have the opportunity to truly hit pause, take time to think about what our businesses could look like, and strategise?
It’s clear now that the way businesses have operated in the past will continue to change radically far beyond the coming weeks and months. So, ask yourself:
‘How can I rise to the challenge and re-engineer my business for the future?’
‘How can I simplify our structure to make it more efficient, profitable and agile?’
The impacts and challenges posed by COVID-19 are going to be felt for quite some time, but this situation also presents what is possibly a once in a lifetime opportunity to streamline business practices, seek cost savings, and refine working from home processes, all of which stand to change our lives for the better.
This is a time for leadership, not a time for wobbly knees. This virus – and this health, social and economic situation - will pass. You have to do everything in your power to survive it and, if you can, to take the opportunity to reengineer your business to come out the other side for the better.
understand your personal obligations as a director.
undertake a review of what directors guarantees you have provided.
secure the money you have lent to your business.
Understand your entitlements to state and federal government grants that will help you fund the changes you need to make.
And remember, we're on hand to assist you and your business over the coming months. Our office remains open and we will be working physically and/or remotely to support you, so please don’t hesitate to contact the Matthews Steer team.