07 300 300 00

COVID-19 Relief Available to Your Business

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 Tucker & Cowen 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.

Richard Cowen
Principal

+61 7 3210 3510

David Schwarz
Principal

+61 7 3210 3506

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. Tucker & Cowen Solicitors take no responsibility for any loss suffered as a result of a person relying on this paper.