Governments Coronavirus Financial Package for Individuals & Businesses
The Government has unveiled a $12.1 Billion financial package to support small businesses, beneficiaries and the health sector through this crisis.
The package is broken down as below:
· $5.1 Billion – Wage Subsidy
· $2.8 Billion – Benefit Increases
· $2.8 Billion – Business tax changes to free up cashflow
· $600 Million – Aviation support package
· $500 Million – Health spending
· $126 Million – COVID-19 leave and self-isolation support
· $100 Million – redeployment package
The wage subsidy is available for employers who are struggling to retain employees due being significantly impacted by COVID-19. To qualify for this subsidy the business must have suffered or is projected to suffer at least a 30% decline in revenue compared to last year for any month between January and June 2020. Registered businesses, sole traders and self-employed people can apply for the wage subsidy.
The subsidy is limited to $585.80 per week for a full time employee or $350.00 per week for a part time employee. It will be paid as a lump sum covering 12 weeks. The maximum amount any employer or business can receive is $150,000.
Due to the maximum cap of $150,000 this subsidy will mostly benefit small businesses.
Leave & Self-Isolation Support
The main way to stop the spread of COVID-19 is to self-isolate, the leave and self-isolation support payments aim to assist anyone who is required to self-isolate.
Same as the wage subsidy the leave payment is available to employers, sole traders and the self-employed. The payments will be $585.80 per week for full time and $350 per week for part time workers. It is available for those people unable to work who are in self-isolation, are sick with COVID-19, or caring for others with COVID-19.
Benefit Increases, Winter Energy Payment & In-Work Tax Credit Changes
The main benefits will raise by $25 per week from 1 April 2020. This is a permanent change which we assume would have been part of the next budget.
The rate of the winter energy payment will double in 2020, the rates will be $40.91 per week for a single person or $63.64 per week for couples or people with dependents. This is a temporary change and only applies for the 2020 year.
From 1 July 2020 families no longer have to satisfy the hours test to receive the In Work Tax Credit. Removing the hours test will extend eligibility for the IWTC to all families who are not receiving a main benefit and have some level of employment income each week. This is an important change as people may face a reduction of, or variable hours, in the wake of the COVID-19.