COVID 19 Update – 7 April
Posted on: 7th April 2020
Financial Support and Subsidy Update
The Australian Government has announced a range of measures to support organisations with the impact of the COVID-19 Pandemic. We know this is a very challenging time for community mental health organisations and MHCC is keen to assist members to become familiar with the financial subsidies available. The information below includes links to relevant websites and should you have any questions or require further assistance please contact Corinne Henderson at email@example.com
To boost cash flow for employers the Government announced that it is providing up to $100,000 to eligible small and medium sized businesses, including not‑for-profits (including charities) that employ people, with a minimum payment of $20,000. These payments will help businesses’ and not-for-profits’ cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff.
Under the enhanced scheme from the first package, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000. The payment will be available from 28 April 2020. This measure will benefit around 30,000 NFPs (including charities).
By linking the payments to staff wage tax withholdings, it is hoped organisations will be incentivised to hold on to more of their workers. The payments are tax free, there will be no new forms and payments will flow automatically through the ATO.
Wage Subsidy Package
The Government have also announced a $130 billion wage subsidy package. This subsidy package provides further support to Australian businesses encouraging them to keep their workers employed by providing a “JobKeeper” payment to eligible employers for eligible employees.
Eligible employers who have been affected by COVID-19 can apply to the Australian Taxation Office (ATO) to access a subsidy from the Government of $1,500 per fortnight for each eligible employee from 30 March 2020 for a maximum of 6 months.
Who is an eligible employer?
Eligible employers include not for profit entities, charities and self-employed individuals.
(Self-employed individuals includes businesses without employees.)
The initial announcement defined eligible employers as a business whose:
- turnover has reduced by 30% or more (to a comparable period a year ago of at least one month) if their turnover is less than $1 billion; or
- turnover has reduced by 50% or more (to a comparable period a year ago of at least one month) if their turnover is more than $1 billion.
On 5 April the Treasurer announced that charities that are registered with the national regulator will be eligible for the JobKeeper Payment if they have suffered a 15 per cent decline in turnover as a result of the coronavirus. Legislation to be introduced into the Parliament this week will include a concessional test for ACNC registered charities.
The Government has said a reduced threshold at which a charity is considered to be substantially affected by the coronavirus, as compared to businesses and other not-for-profits, will support a sector which is expected to have a significant increase in demand for its services. Further details of the Treasurers announcement are here. Please note this has not yet been legislated.
Who is an eligible employee?
Eligible employees are defined as employees who:
- are currently employed by the eligible employer including those stood down or re-hired
- were employed by the employer at 1 March 2020
- are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020)
- are at least 16 years of age, and are an:
- Australian citizen
- holder of a permanent visa
- a Protected Special Category Visa Holder
- a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more
- or a Special Category (Subclass 444 from NZ) Visa Holder; and
- are not in receipt of a JobKeeper Payment from another employer.
Note: from the definition above, it appears employees who hold temporary visas may not be eligible for this payment unless they fall into one of the categories above.
If you have laid off staff between 1 March – 30 March 2020, you may be entitled to receive the subsidy in relation to the employee if re-hired.Employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight before tax. The current STP system will allow the ATO to check that the payments are made to the eligible employees.
How do you apply?
Employers can register their interest in applying for the payment on the ATO website, available at: https://www.ato.gov.au/Job-keeper-payment/ from 30 March 2020
Please note: Monthly reports will need to be provided to the ATO to continue the payments.
Businesses without employees will need to provide an ABN for their business and nominate an individual to receive the payment. People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.
To read additional information fact sheet click here JobKeeper payments will commence in the first week of May 2020 but will be back dated to 30 March 2020. Employers will need to continue wages payments until the ATO payments are received.
When will this become law?
The Government have suggested that the legislation is a being drafted and will be passed through parliament shortly thereafter.
It will be difficult to make any decisions regarding staffing until there is further information on how the subsidy will be applied. The benefits of being able to retain key team members will mean that your organisation will be ready to recommence its activities when the health crisis ends.
NDIS Minister, Stuart Robert announced on 21 March new measures to support providers and participants through COVID-19. The announcement noted that there will be more changes to come. The information we have so far is:
The Government has released a suite of NDIS provider supports in response to COVID-19 to ease cash flow issues, help retain workers and aid continuity of care. Work is also being done to find additional Disability Support Workers including upskilling displaced workers from other industries and matching existing and new workers to areas where there is a demand for services.
- Registered NDIS providers are eligible for a one-month advance payment based on a monthly average of supports delivered in the previous three-months period to assist with immediate cash flow relief. This will be automatically distributed, and providers need to notify the NDIA if they do not want this.
- A 10 per cent COVID-19 loading will be added to price limits for certain supports for up to six months to cover the additional costs of service delivery for existing supports
- The NDIA’s cancellation pricing policy has been relaxed to allow providers to charge the full 100 per cent for the price of a cancelled service, and the definition of ‘short notice cancellation’ has been broadened from 2 to 10 days.
- Participants will be charged 100 per cent of the agreed support price if they cancel a service at short notice (up from 90 per cent).
- Providers can claim for the increased use of cleaning and personal protective equipment (PPE) associated with COVID-19.
- Participants can request to have their planning meetings over the phone
- People who are happy with their current plan can ask for it be renewed for up to 24 months
- The NDIA will allow some people to shift capacity building funding to funding for core supports in consultation with special teams of planners in the NDIA.
- The NDIA will be reaching out to “targeted higher risk NDIS participants” to ensure these people continue to receive the essential disability related supports they need.
You can read the media release here: https://ministers.dss.gov.au/media-releases/5661