STM is providing proactive advice for our clients in this time of uncertainty. If you have specific questions in regards to any of the information below, please contact us via email stm@st-m.com.au or phone 02 6024 1655.

28 April 2020 - JobKeeper enrolment extension and wage payment deadlines 

16 April 2020 - JobKeeper Update

8 April 2020 - COVID-19 Commercial and Retail Tenancies

7 April 2020 - ATO Working from home shortcut

6 April 2020 - Coronavirus Superannuation Measures

3 April 2020 - NSW Small Business Support Grant

30 March 2020 - Vic Business Support Fund grants

30 March 2020 - JobKeeper Payment

23 March 2020 - COVID-19 - Stimulus package

JobKeeper Applications Update

Published 16 April 2020

If you're an eligible business applying for JobKeeper payments, you will have the option to apply yourself, or via your tax professional.  We have provided additional information to help you assess your eligibility:

 
The detailed guide to applying for the payment can be found at the ATO JobKeeper page
 
Important information about the application process to note:
  • Online applications open 20th April
  • To claim for the month of April, the application is due before 30th April.
  • Employee nomination form must be completed for each employee JobKeeper employee nomination notice 
  • Applications will be submitted via the ATO Business Portal
 
Some of the eligibility criteria for this payment are complex.  Should you require more detailed advice we are available to assist you with:
  • Analysis regarding your revenue reporting and the 30% turnover reduction
  • Reviewing employee payments for April to ensure you meet the minimum requirements
  • Lodgement of your JobKeeper application to the ATO
  • Lodgement of your monthly JobKeeper Declaration report to the ATO
  • Liaising with the ATO on your behalf
 
We are a fee for service firm, if you engage us to help with any of the above, we will provide you with an estimate of costs in relation to your specific requirements.
 
 We will be sending further information as it comes to light. Please contact us with any urgent queries.

Commercial & retail tenancies

Published 8 April 2020

Proposed Government Mandatory Code

The Prime Minister has announced that the National Cabinet will this week formalise a mandatory code (Code) for commercial landlords and tenants. This Code will apply to businesses who are signed up for the JobKeeper program and have a turnover of less than $50M per annum.

The Prime Minister noted that the Code would be based on a 'proportionality principle' with turnover reduction of the tenant needing to be reflected in the rental waiver and deferral by the landlord. While the Prime Minister indicated that the Code would not be prescriptive, he did flag the potential for lease terms to be extended, and/or lease payments to be increased for the remainder of the lease term, to make up for revenue lost by the landlord.

The Prime Minster also made it clear that tenants not significantly affected by COVID-19 are expected to honour their lease agreements.

While details of the Code are yet to be confirmed, it is expected that the Code will include the following items:

  • short term temporary moratorium on eviction for non-payment of rent for commercial tenancies impacted due to COVID-19
  • part deferrals and part waivers of rent
  • relief for landlords from the payment of land tax, council rates and other statutory outgoings.

Any Code will raise a number of significant issues for both landlords and tenants, as well as existing mortgagees.

Each of the State Governments are also likely to enact new laws either in accordance with, or in addition to, the Code. New South Wales and the ACT have already enacted their own laws following previous media announcements. This will also add a further layer of legal complexity for both landlords and tenants, particularly those with properties in multiple jurisdictions.

Leases to which the Code does not apply

Because of the non-application of the Code to businesses with turnover of more than $50M per annum or which are not signed up to the JobKeeper program, there will be landlords and tenants which will remain governed by the terms of their individual leases and the relevant legal principles which apply to those leases. The following legal principles will apply to most commercial and retail leases:

  1. Closure of buildings – the statutory powers of the Federal Government and the Victorian State Government include the power to control access to large places of gathering, including commercial office premises, and the power to require those places to close. Any order requiring closure is binding on both the landlord and the tenant.  A closure of a building or premises in accordance with a Government direction is an action outside the control of both the landlord and the tenant and will not constitute a breach to the lease terms by the landlord. A tenant will have no claim against the landlord for a breach in these circumstances.

In the absence of a Government closure direction, landlords are required to keep buildings open for tenants to access their premises and maintain services to those premises, in accordance with the requirements of each lease. A failure to do so may expose the landlord to a claim by the tenant.

Tenants also need to consider the application in a lease of a positive obligation to trade if a tenant decides to close the premises.

  1. Payment of rent and outgoings – unlike other contracts, leases do not typically contain a force majeure clause that would cover the circumstance of forced closure of premises. Most leases will not contain any provision allowing for rent and outgoings to reduce if a tenant cannot use or access the premises or the building, unless the reason preventing access is damage or destruction to the premises or the building.  Accordingly, a tenant will not be entitled to any relief from the payment of rent or outgoings under the lease even if it is unable to access the premises or operate its business from the premises as a consequence of a forced closure due to COVID-19.

Statements by tenants that they will not be paying rent due to COVID-19 eg recent statements by some major retail chains, are a clear breach of lease and may constitute repudiation entitling a landlord to terminate the lease and sue for damages.

  1. Ability to terminate lease – typically a tenant will not be able to terminate a lease on the grounds that it is unable to access the premises and/or operate its business from the premises as a consequence of a forced closure due to COVID-19. It is also highly unlikely that a tenant would be able to terminate a lease because the tenant is unable to access the premises and/or operate its business from the premises.
  2. Negotiation of rent relief – negotiation of rent relief or deferral is a matter for negotiation between each landlord and tenant on a case by case basis. While many landlords have negotiated rent holidays or short term rent reductions with tenants, there is no legal requirement on a landlord to do so, and there is no standard approach in the marketplace.

Next steps

Each lease needs to be individually assessed to determine whether the Code applies to that lease, what are the practical and legal implications if the Code does / does not apply, and what actions are available to landlords and tenants to achieve appropriate outcomes.

STM will be able to provide you with the necessary financial data (if appropriate) to support your mediation process and can assist you with engaging a mediator. If you have further questions, please contact our office on 02 6024 1655 or email stm@st-m.com.au 

We will be sending further information as it comes to light. Please contact us with any urgent queries.


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ATO Working from home shortcut

Published 7/4/20

The ATO has made a major change this year as a result of the COVID-19 pandemic. The ATO is rolling out a new working from home shortcut which will make it easier for millions of Australians to claim tax deductions.

The special new arrangement will allow people to claim a rate of 80 cents per hour for all their running expenses, instead of calculating costs for specific running expenses as taxpayers would under normal circumstances. Multiple people living in the same house can claim this new rate individually, and it is no longer a requirement to have a dedicated work from home area in order to claim.

Taxpayers will only need to keep a record of the number of hours worked from home, rather than individual expenses. Assistant Commissioner Karen Foat says "this recognises that many taxpayers are working from home for the first time and makes claiming a deduction much easier. If you choose to use this shortcut method, all you need to do is keep a record of the hours you worked from home as evidence of your claim."

The new shortcut will be in place from 1 March to 30 June 2020.

This new shortcut arrangement does not stop people from making a working from home claim under the existing arrangements, which involves calculating all or part of your running expenses.

Claims for working from home expenses prior to March 1 can't be calculated using the shortcut method, and must use the pre-existing working from home approach and requirements.

The ATO is also reminding people the three "golden rules" for deductions still apply.

That means taxpayers must have spent the money themselves and not have been reimbursed, the claim must be directly related to earning income, and there must be a record to substantiate the claim.

STM's individual taxation experts who will guide you through the process of what and how much you can claim and will be in contact prior to 30 June to provide checklists for all clients.

Remember we are always here to help. If you have multiple years of taxation returns outstanding or are suffering some financial hardships which are affecting your ability to complete your tax returns, contact us to see how we can help.

https://www.ato.gov.au/Media-centre/Media-releases/New-working-from-home-shortcut/

https://www.ato.gov.au/General/COVID-19/Support-for-individuals-and-employees/Employees-working-from-home/ 

Coronavirus Superannuation Measures

Published 6 April 2020

The Australian Government is providing financial assistance to Australians to support them through the coronavirus. Please see below for a list of measures that have been introduced to assist Self-Managed Superannuation Funds.

Temporary early release of superannuation

From mid-April, eligible individuals can apply for a release of up to $10,000 of their super before 1 July 2020. They will also be able to access a further $10,000 from 1 July 2020 until 24 September 2020. Individuals will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans' Affairs payments.

An individual will be eligible for early release if they satisfy any one or more of the following requirements:

  • They are unemployed.
  • They are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance.
  • On or after 1 January 2020, either
    • they were made redundant;
    • their working hours were reduced by 20% or more; or
    • if they are a sole trader, their business was suspended or there was a reduction in their turnover of 20% or more.

Individuals can apply through myGov from mid-April and certify that they meet the above eligibility criteria. Once the ATO has processed the application, they will issue the individual with a determination, and provide a copy of this determination to the individual's superannuation fund, which will advise them to release the superannuation payment.
 

Trustee responsibilities for early release of super 

Please make sure have received the ATO determination confirming eligibility, prior to releasing any funds from your SMSF.

Temporarily reducing superannuation minimum drawdown rates

The Government is temporarily reducing the superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for the 2019–20 and 2020–21 income years. This measure will benefit retirees with account-based pensions and similar products by reducing the need to sell investment assets to fund minimum drawdown requirements.



If you have paid the minimum drawdown amount, payments can be stopped for the remainder of the year. If you have paid more than the minimum drawdown amount, you can recontribute these amounts if you are eligible to make superannuation contributions, subject to other rules or limits such as contributions caps.
 
If you have taken more than the minimum drawdown amount, in some circumstances the additional amount can be treated as a lump sum to reduce your a) Transfer Balance Account or b) accumulation account (where applicable).  The main benefit of taking the lump sum is that:

a) a larger amount up to your Transfer Balance Cap could be used to commence an income stream in future years where a contribution is made (e.g. downsizer contribution) or member becomes entitled to a reversionary or death benefit pension; or

b) a higher proportion of the fund will be in pension phase.
 
There is no change to the maximum pension you can withdraw. For account-based pensions you don't have a limit to the amount you can withdraw from your pension account. For transition to retirement pensions the maximum is set at 10% of the opening account balance on 1 July in the financial year.
 

Rent relief

If your SMSF has a property and a tenant in financial distress, you may be able to provide your tenant with rental relief under an agreed commercial arrangement. This may even be the case when the tenant is a related party.
 
Ordinarily, charging a tenant a price that is less than market value in an SMSF is a breach of superannuation laws. However, the ATO have provided guidance which allows SMSF landlords to provide for a reduction in or waiver of rent because of the financial impacts of coronavirus.
 
For the 2019–20 and 2020–21 financial years, the ATO will not take action where an SMSF gives a tenant – who may also be a related party – a temporary rent reduction or waiver during this period.

Where there are temporary changes to the terms of the lease agreement in response to Coronavirus, it is important that the parties to the agreement document the changes and the reasons for the change. This could be by way of a minute or a renewed lease agreement or other contemporaneous documentation. 
 

In-house asset restrictions

The downturn in the share market may result in the fund's in-house assets being more than 5% of the fund's total assets, which would be a breach of the SIS Act. If, at the end of a financial year, the level of in-house assets of a SMSF exceeds 5% of a fund's total assets, the trustees must prepare a written plan to reduce the market ratio of in-house assets to 5% or below. This plan must be prepared before the end of the next following year of income. If an SMSF exceeds the 5% in-house asset threshold as at 30 June 2020, a plan must be prepared and implemented on or before 30 June 2021. However, the ATO will not undertake compliance activity if the rectification plan was unable to be executed because the market has not recovered or it was unnecessary to implement the plan as the market had recovered.
 

Investment strategies

The downturn in the market may impact on your SMSF's investment strategy. Trustees must prepare and implement an investment strategy for their SMSF, which they must then give effect to and review regularly. The strategy should be reviewed at least annually, and you should document that you've undertaken this review and any decisions arising from the review. Certain significant events, such as a market correction, should also prompt a review of your strategy and may require updating your investment strategy.
 
Where the assets of an SMSF or the level of investment in those assets fall outside of the scope of your investment strategy, you should take action to address that situation, which could involve adjustments to investments or updating your investment strategy. All investment decisions must be made in accordance with the investment strategy of the fund. If in doubt, trustees should seek investment advice.
 

Reduced social security deeming rates

As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent. The reductions reflect the low interest rate environment and its impact on the income from savings. The change will benefit around 900,000 income support recipients, including around 565,000 people on the Age Pension who will, on average, receive around $324 more from the Age Pension in the first full year that the reduced rates apply.
 
Resources
More information on the above measures can be found via the following links.

Treasury Fact Sheet: Australian Taxation Office:  
We will be sending further information as it comes to light. Please contact us with any urgent queries.

JobKeeper Payment

Published 30 March 2020

We have been in contact with our business clients over the past week discussing the economic stimulus packages released so far, and how they apply to your individual circumstances.  Late yesterday afternoon, the Government released further economic stimulus in the form of a JobKeeper Payment.  
 
Under the JobKeeper Payment, businesses significantly impacted by the coronavirus outbreak will be able to access a subsidy from the Government to continue paying their employees. This assistance will help businesses to keep people in their jobs. For employees, this means they can keep their job and earn an income – even if their hours have been cut.  It will also ensure that essential connections between business owners and employees are maintained, and enable businesses to reactivate their operations quickly when we emerge from the crisis.
 
Eligible businesses will receive a payment of $1,500 per fortnight, per employee for up to 6 months. 
 

Eligibility
Eligible employers must:

  • have a turnover of less than $1 billion and turnover has been/or will be reduced by more than 30 per cent, relative to a comparable period a year ago (of at least one month), or 50% decrease for those over $1billion,
  • have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged.
 
Non-for-profit entities and self-employed individuals that meet the turnover tests  may also apply for JobKeeper payments.
 
Eligible employees are employees who:
  • are currently employed by the eligible employer
  • were employed at 1 March 2020
  • are full time, part-time, or long-term casual (casual employed on a regular basis for more than 12 months)
  • are at least 16 years of age
  • meet certain requirements regarding citizenship
  • not in receipt of a JobKeeper Payment from another employer
 
Application
At the time of writing, businesses can register their intention to apply for the scheme on the ATO website - https://www.ato.gov.au/general/gen/JobKeeper-payment/
Following registration with the ATO via the link above, eligible employers will be provided with updates via text and/or email, and when available they will be able to apply for the scheme through an online application.  You will need to identify eligible employees and will be required to provide monthly updates to the ATO regarding those employees.  Currently there is no guidance as to what documentation will be required to prove the decrease in turnover, once the application process becomes clearer, we will be available to assist where necessary.
 

Payment process
The payment will be facilitated by the ATO, and made to the employer monthly in arrears. With the registrations opening 30th March, the first payments relating to April wages, will be made in May.
 
The full amount of the payment must be passed onto the employee, even if their usual gross wage is lower than $1,500 per fortnight.  When an employee's normal wage is less than $1,500 per fortnight, the employer has discretion to pay superannuation on any additional wage paid due to the JobKeeper payment.  
 
If an employee has been stood down by an eligible employer, they must be paid a minimum of $1,500 per fortnight, before tax.  Any employment arrangements that have been terminated since 1 March 2020 may be re-engaged by the same employer to be eligible for the payment.
 

More information
Can be found via the following links.

Treasury Fact Sheet: https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employers_0.pdf
Business.gov.au: https://www.business.gov.au/risk-management/emergency-management/coronavirus-information-and-support-for-business/jobkeeper-payment
 
 We will be sending further information regarding this new measure as soon as practicable.  Please contact us with any urgent queries.


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COVID-19 Stimulus Package

Published 30 March 2020

At STM we are committed to ensuring that all of our clients are provided with timely and useful information, especially now with the impact of the Coronavirus pandemic.   Below is a summary of the stimulus package released by the Government yesterday.


Business clients

We will be in contact with our business clients in the coming weeks to discuss how these measures apply to your individual circumstances. If your business has been impacted significantly and you require urgent advice, please contact us. 

Cash flow boost for employers  - if you are an employer you may be eligible for a payment of up to $100,000 (minimum of $20,000) to assist them in retaining staff.  This will be accessed via a tax-free cash payment to your ATO account to offset PAYG withheld from wages between January 2020 and October 2020 and will be applied as your activity statements are lodged.

Support for employers of apprentices and trainees – if you are an employer of less than 20 full-time employees can apply for a 50% reimbursement of wages paid to apprentices and trainees between 1 January 2020 and 30 September 2020, up to a maximum of $21,000 ($7,000 per quarter) for each apprentice or trainee. 

Support for immediate cash flow needs - Small to medium business will have increased access to unsecured bank loans to be used for working capital, as lending obligations by banks are relaxed from April 2020.
 
Instant asset write off increase – the instant asset write-off threshold has been increased from $30,000 to $150,000 for assets purchased during the period 12 March 2020 to 30 June 2020.
 
15 month investment incentive – access to accelerated depreciation deductions in the form of a 50% immediate deduction of the cost of eligible assets purchased during the period 12 March 2020 to 30 June 2021.

Fact Sheet: Cashflow Assistance for Businesses 
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_businesses.pdf

Fact Sheet: Delivering Support for Business Investment 
https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Support_for_business_investment.pdf


Individual clients

If you are experiencing hardship, please contact us and we can help you determine your eligibility for the payments below and discuss any other options which may be available.

For Casual Employees, Sole Traders & Households

The $550 Coronavirus Supplement – this will be automatically available if you're already getting an income support payment such as JobSeeker or Parenting Payment and will be in addition to your normal benefit.  It will be paid from 27 April 2020 for up to 6 months.

If you're a permanent employee who has been stood down or lost your job, a sole-trader, casual or contract worker whose income has reduced, or are caring for someone affected by coronavirus, you will be able to apply for JobSeeker or Youth Allowance payments, and if approved you will also receive the supplement benefit. The usual waiting period is waived for 6 months.

 
$750 stimulus payment – If you are not eligible for the Coronavirus Supplement, you may still receive the second $750 Economic Support Payment if you are eligible on 10 July 2020 for any of the payments or concession cards that were eligible for the first payment that was paid in March. This will be paid from 13 July 2020.
 
Superannuation Access – Sole traders or casual workers who have had their incomes reduced by 20% or more as a result of coronavirus, or are eligible for the coronavirus supplement, will be able to apply to access up to $10,000 of their superannuation tax-free.
 
Pensioners

Pension deeming rates to be reduced by 0.25% from 1 May 2020 – this should effectively increase your pension benefits. On average it is expected that a person on the Age Pension will receive around $105 more in the first full year that the reduced rates apply.
 
Reduction in superannuation minimum drawdown requirements – If you are receiving an account-based pension, the minimum drawdown percentage has been reduced by 50% for the 2019-20 and 2020-21 income years.  This will enable retirees to manage their superannuation investments and income accordingly and not be forced to sell investments during the market and economic downturn.
 
Some more useful links:

https://treasury.gov.au/coronavirus/households
http://www.servicesaustralia.gov.au/
http://www.dva.gov.au/
http://www.dss.gov.au/

 

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JobKeeper Enrolment Extension and Wage Payment Deadlines

Published 28 April 2020

The ATO has announced that it has extended the date eligible employers must enrol in the JobKeeper Scheme from 30 April 2020 to 31 May 2020. However, employers still need to pay employees for JobKeeper fortnights 1 and 2 by the new date of 8 May 2020.

 

One of the key requirements of the JobKeeper Scheme is that employers must first pay their employees $1,500 for JobKeeper fortnights 1 and 2 before they can apply to receive JobKeeper Payments.

 

As a warning, employers must be aware that, despite the fact they can now pay their employees as late as 8 May 2020 and still be eligible for JobKeeper Payments for fortnights 1 and 2, they are still required to pay their employees a further $1,500 by 10 May 2020 in relation JobKeeper fortnight 3 (which ends on the same date).

 

At the current time, no extension to this date has been announced, and it would be unwise for employers to anticipate that there will be one.

More information is available from the ATO on the attached link. As always we are here for you! - to provide advice and assistance and a complete JobKeeper eligibility test and enrolment service if you need it. Call us on 6024 1655, email stm@st-m.com.au or DM on Facebook.

NSW Small Business Support Grant

Published 3 April 2020

 

The NSW Government have released with a further Small Business Support Grant to businesses that have been highly impacted by COVID-19 within the following industries:

• Retail trade
• Accommodation and food service
• Rental, hiring and real estate services
• Administrative and support services
• Arts and recreation services


Your business may be eligible if it:

• operates in an industry highly impacted by the Public Health Order 2020 issued 30 March (listed above) and has suffered a decline in turnover of 75%
• has between 1-19 employees and an annual payroll below $900,000 (the NSW payroll tax threshold)
• has an annual turnover of more than $75,000
• was registered with an ABN at 1 March 2020
• has an Australian Business Number and employs staff in NSW at 1 March 2020
• has unavoidable fixed costs not otherwise the subject of other NSW and Commonwealth Government financial assistance measures.

 

We note that the application form will be available on the Service NSW Website by 17 April.

 

For further information please see the following link  https://www.service.nsw.gov.au/campaign/covid-19-help-small-businesses/grants-loans-and-financial-assistance?fbclid=IwAR0FBaUBbCfndYV8v6p282yXk2E3H2F4IF2vYp4X2S_hwhtJq0YDrzQ07-I 

Vic Small Business Support Fund

Published 30 March 2020

 

 

$10,000 grants are now available through the Victorian Government's Business Support Fund.

 

If your business has had to close, or your business has been highly impacted by shutdown restrictions, find out more and apply at business.vic.gov.au/businesssupportfund

Contact & Connect

For more information on how our expertise can benefit you, contact us today.

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Wodonga VIC 3690
Australia
Phone: 02 6024 1655
Email: stm@st-m.com.au