Australian Government has offered assistance to support businesses to manage cash flow challenges and help businesses retain their employees due to the economic impact of the COVID19 (coronavirus). The measures are designed to support employing small and medium enterprises and to improve business confidence. The wage subsidy for apprentices and trainees will help to ensure the continued development of the skilled workforce that employers need.
What is the funding for?
EMPLOYERS UP TO $100K
The Boosting Cash Flow for Employers measure will provide up to $25,000 back to business, with a minimum payment of $2,000 for eligible businesses. The payment will provide temporary cash flow support to small and medium businesses that employ staff. The payment will be tax free.
UPDATE: Minimum increased to $20k with maximum of $100k max. Delivered in 2 payment groups: $50k from March – June in line with PAYG, then another $50k from July to October 2020.
The cash flow boost provides a tax free payment to employers and is automatically calculated by the Australian Taxation Office (ATO). There are no new forms required.
APPRENTICES AND TRAINEES: $21K Per apprentice
The Government is supporting small business to retain their apprentices and trainees. Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer.
Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).
Support will also be provided to the National Apprentice Employment Network, the peak national body representing Group Training Organisations, to co-ordinate the re-employment of displaced apprentices and trainees throughout their network of host employers across Australia.
Eligibility – who can access the payment?
EMPLOYERS – SMEs
Small and medium business entities with aggregated annual turnover under $50 million and that employ workers will be eligible. Eligibility will generally be based on prior year turnover.
- The payment will be delivered by the Australian Taxation Office (ATO) as a credit in the activity statement system from 28 April 2020 upon businesses lodging eligible upcoming activity statements.
- Eligible businesses that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 50 per cent of the amount withheld, up to a maximum payment of $25,000. UPDATED to 100% of amount withheld to max of $50,000 then repeated for second payment up to another $50,000
- Eligible businesses that pay salary and wages will receive a minimum payment of $2,000, even if they are not required to withhold tax.This measure will benefit around 690,000 businesses employing around 7.8 million people. UPDATED TO $10K .
APPRENTICES AND TRAINEES
The subsidy will be available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy.
Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.
This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.
How do I apply?
The Boosting Cash Flow for Employers measure will be applied for a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to the business upon lodgment of their activity statements. Where this places the business in a refund position, the ATO will deliver the refund within 14 days.
Quarterly lodgers will be eligible to receive the payment for the quarters ending March 2020 and June 2020.
Monthly lodgers will be eligible to receive the payment for the March 2020, April 2020, May 2020 and
June 2020 lodgments.
APPRENTICES AND TRAINEES
Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020.
Further information is available at:
- The Department of Education, Skills and Employment website at: www.dese.gov.au
- Australian Apprenticeships website at: www.australianapprenticeships.gov.auFor further information on how to apply for the subsidy, including information on eligibility, contact an Australian Apprenticeship Support Network (AASN) provider.
For more information on the Australian Government’s Economic Response to Coronavirus visit treasury.gov.au/coronavirus.
Businesses can visit business.gov.au to find out more about how the Economic Response complements the range of support available to small and medium businesses.
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