Posted Wednesday 8 April, 2020
By Justin Marschke & Jayleigh Sargent
The Federal and State Governments have announced a raft of targeted support measures to keep businesses afloat in these uncertain times. At Cowen Schwarz Marschke Solicitors, we are continuing to monitor the changing legal landscape and we are here to help guide you through it.
Many of the new measures are focused on ensuring small to medium sized businesses (defined as having a turnover of less than $50million) (“SME”) are given the best opportunity to trade through this period, as well as expanding other relief measures to assist sole traders.
The following table sets out the relief available to eligible SMEs and sole traders:-
| No. | Relief Provider | Relief | Eligibility | Legislation |
| 1. | Federal Government | Two payments of between $10,000 and $50,000
Calculated as 100% of the SMEs PAYG withholding tax on salary and wages |
SME | Yes |
| 2. | Wage subsidy of 50% of the apprentice’s or trainee’s wage
From 1 January 2020 to 30 September 2020 of up to $21,000 per eligible employee |
SME | Yes | |
| 3. | Guarantee up to 50% of unsecured loan up to $250,000
For working capital up to 3 years with an initial 6-month repayment ‘holiday’ |
SME / Sole Trader | Yes | |
| 4. | Temporary relief from insolvent trading for 6 months | All business | Yes | |
| 5. | Access to tax-free drawdown of $10,000 of your super twice
If reduction in turnover of 20% or more, may drawdown once before July 2020 & once after July 2020 |
Sole trader | Yes | |
| 6. | Expanded access to income support payments with reduced means testing | Sole trader | Yes | |
| 7. | Rent relief for businesses leasing properties from Commonwealth Government | SME | No | |
| 8. | Australian Tax Office | Instant asset write-offs increase from $30,000 to $150,000 | SME[1] / Sole Trader | Yes |
| 9. | Accelerated depreciation deductions
For eligible assets first used and installed between 12 March 2020 and 30 June 2021 |
SME[2] / Sole Trader | Yes | |
| 10. | Tailored support arrangements for 6 months
Including deferred payments, varied instalments and remitting interest and penalties |
SME / Sole Trader | No | |
| 11. | JobKeeper payment of $1,500 per fortnight per eligible employee
For up to 13 fortnights between 1 March 2020 and 30 December 2020 Increased flexibility regarding employees’ hours of work, duties and location of work |
All business with a 30% decrease in turnover compared to previous year[3] | Pending | |
| 12. | Queensland Government | Payroll tax ‘holiday’ for 3 months, refund of 2 months & 6-month deferral | SME | No |
| 13. | Loans of up to $250,000 with initial 12-month interest free period
For the purpose of retaining employees and maintaining operations |
SME | No | |
| 14. | Rent relief for businesses leasing properties from Queensland Government | SME | No | |
| 15. | $500 rebate off energy bills | SME | No | |
| 16. | Supply chain matching support | SME / sole trader | No | |
| 17. | Financial Institutions | Deferred loan repayments for up to six months and reduced interest rates | SME | No |
| 18. | Landlords | Temporary, proportionate relief from rental payments in the form of waivers and deferrals to be negotiated and agreed pursuant to the mandatory industry code for commercial and retail leases | SMEs eligible for JobKeeper program | No |
[1] For relief items 7 and 8, the annual turnover threshold eligibility is increased from $50million to $500million.
[2] See above.
[3] For relief item 10, businesses with an annual turnover of greater than $1billion must show a 50% decrease in revenue.
Access to Relief
With the exception of the relief at No. 1 above, all of the above relief is granted by application only, and your business will not receive automatic relief. In some cases the legislation containing the relief has not yet been enacted. For that reason, we consider it important that if you think you may be eligible for any of the above relief, you take the following steps as soon as possible:-
- make an application to the relevant Relief Provider immediately for any of the above relief that your business may be entitled to;
- ask for confirmation of forbearance in writing from the relevant provider against recovery action for a reasonable time; and
- given the inevitable increase in businesses seeking access to the above relief measures, we suggest that you also include a statement in your application that unless you hear from the provider otherwise, you will proceed on the basis that the forbearance has been granted.
The purpose of these suggestions is to give your business something to rely on in the event the relief provider does not reply, or its response is delayed, and you are unable to meet any of your obligations.
It is important to keep in mind that many of these measures are available for a limited time only, and you should take steps to ensure that your business is mitigating its loss throughout these uncertain times.
Contact us if you would like some help
If you could use a hand, we are here to help. We are prepared to continue to provide and maintain our consistently high level of professional service through the worst of this crisis. Just contact one of our Principals as usual by landline, mobile or email.
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Richard Cowen Principal +61 7 3210 3510 |
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David Schwarz Principal +61 7 3210 3506 |
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Justin Marschke Principal +61 7 3210 3542 |
Note: This document contains only a general summary of the legal principles relevant to its subject matter and is not intended to be used or relied upon as legal advice. The application of the legal principles discussed may vary depending upon the particular circumstances. Cowen Schwarz Marschke Solicitors take no responsibility for any loss suffered as a result of a person relying on this paper.
