What's in the government's $17.6 billion stimulus package for you
Households, pensioners, and small businesses stand to benefit from the governments $17.6 billion response to COVID-19, but will it be enough?
"It's not for us to tell those Australians how to spend their money, but what we do know from experience is that they will spend that money and that money will encourage economic activity," says Treasurer Josh Frydenberg.
Households receiving benefit payments will get one-off tax-free payment of $750. The payments cover pensioners, social security, veteran and other income support recipients and eligible concession card holders.
"They comprise around half of those who will receive those payments, but [the package] also will be extended to those in family tax benefits, which obviously goes to those in earning households."
These payments will be made progressively from March 31, with 90% of it expected to be paid out by mid-April.
While acknowledging the short-term relief the $750 one-off payments will provide to those on social security, the Australian Council of Social Service (ACOSS) says "it's nowhere near enough".
"The government has not targeted today's package in the way that was needed, with some of these $750 payments going to households who don't qualify for a pension because they have millions in superannuation assets," the organisation said in a statement.
"These households are less likely to spend than someone living on $40 a day. Others are seriously left behind, particularly larger families on very low incomes."
Morrison says that "[Pensioners] comprise around half of those who will receive those payments, but [the package] also will be extended to those in family tax benefits, which obviously goes to those in earning households."
While not part of the stimulus package, the government has also cut deeming rates - the amount your income to assessed to come from your financial assets - by 50 basis points. This moves the lower deeming rate to 1% for investments up to $51,800 for single pensioners and $86,200 for pensioner couples, while the upper deeming rate will drop from 3% to 2.5%.
Employers will collectively receive a $6.7 billion boost to cash flow - up to $25,000 each, with a minimum payout of $2000 for small and medium businesses; all of it tax-free.
In addition, $700 million has been put aside to increase the instant asset write off threshold from $30,000 to $150,000, while coverage of the write-off will be widened to include businesses with aggregated annual turnover of less than $500 million, up from $50 million. Again, all tax-free.
ACOSS again reinforced the need for more.
"While the direct funds to small businesses should soften rising unemployment, the depreciation allowances may be less effective, because businesses will not invest in new assets without the confidence of ongoing demand."
If you're part of any of the following schemes, expect a one-off payment of $750 into your account by April 17, 2020:
- Age Pension
- Disability Support Pension
- Carer Payment
- Carer Allowance
- Parenting Payment
- Wife Pension
- Widow B Pension
- ABSTUDY (Living Allowance)
- Bereavement Allowance
- Newstart Allowance
- Youth Allowance
- Partner Allowance
- Sickness Allowance
- Special Benefit
- Widow Allowance
- Farm Household Allowance
- Family Tax Benefit A
- Family Tax Benefit B
- Double Orphan Pension.
- You'll also get it if you hold one of the following cards:
- Pensioner Concession Card
- Commonwealth Seniors Card
- DVA Gold Card.
Or if you get one of the following Department of Veterans' Affairs payments:
- Veterans Service Pension
- Veteran's Income Support Supplement
- Veterans' Compensation payments
- War Widow(er) Pension.
It's also worth noting that you won't be allowed to use the cash to pay off Centrelink debt.
Meanwhile, the Australian Tax Office is doing what it can to lighten the burden on small businesses. Some of the options include:
- Deferring by up to four months the payment date of amounts due through the business activity statement (including PAYG instalments), income tax assessments, fringe benefits tax assessments and excise;
- Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds;
- Allowing businesses to vary Pay As You Go (PAYG) instalment amounts to zero for the April 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
- Remitting any interest and penalties, incurred on or after January 23, 2020, that have been applied to tax liabilities;
- Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low interest payment plans.
We're cutting through the confusion to help you manage your money during the coronavirus outbreak. Click here for more on how COVID-19 could affect your job, budget, super and investments.