April 23, 2020
Last updated on October 22, 2020
Social Traders has updated information on the Federal and State Government stimulus packages that may have relevance for social enterprises.
How JobKeeper Payments works for social enterprises. Webinar recording: 51 minutes (17 April 2020)
A collaboration between Social Traders, Westpac Foundation, Davidson Institute and Social Impact Hub.
The JobKeeper Payment, do you understand how this works for your social enterprise? Rob Lockhart from the Davidson Institute will talk to experts Brendan Tegg, Principal of TG Endeavour and Jacquie Seemann, Employment Partner at Thomson Greer Lawyers, to discuss the new legislation, how it works, and answer any questions you may have.
Philanthropy Australia has launched a partnership with Australian Communities Foundation (ACF) to help coordinate the Australian philanthropic funding response to COVID-19.
Not-for-profit organisations (including social enterprises who have both TCC (Tax Concession Charity) and DGR Item 1 (Deductible Gift Recipient) endorsements) are encouraged to register their COVID-19-related funding needs so that philanthropic funders can understand the granting opportunities available and respond to the critical needs of the sector.
State and territory information, grants and assistance
Along with the assistance the Australian Government has announced, your social enterprise may be eligible for assistance from your State or Territory Government.
Each Australian state and territory has different financial help, restrictions and assistance for businesses affected by the coronavirus, so it’s important to stay up-to-date with new announcements.
PWC business support
PwC has developed tools to help both small and larger businesses through COVID-19, including this webinar recording ‘Private businesses in the face of COVID-10’ (25 minutes), with supporting materials.
Key technical topics covered:
- Cashflow & liquidity
- Determine eligibility for Government incentives
- Identify key stakeholders and creditor categories and opportunities to manage
- Communication is key
- Understand your director duties and obligations
Further support options are being developed, stay tuned for updates.
Local government information, grants and assistance
Many local governments (councils) are offering support for organisations impacted by COVID-19. Have a look at the website of your local council to see if they are offering anything relevant for your social enterprise.
For information on non-financial support, including topics such as managing your people, legal, strategy, business planning, and innovating your business model, click here.
Updated 7 April 2020
Federal and State Government stimulus packages summary for Social Enterprise
Social Traders has summarised Federal and State Government stimulus packages that may have relevance for social enterprises. The packages are focussed on maintaining jobs & tax relief, although there are other initiatives such as new debt mechanisms and funds that may be relevant for social enterprises. Also included are links to useful non-financial forms of assistance e.g. templates for rent relief request letters and business continuation plans.
Please note this list may not be comprehensive as there is new stimulus being announced regularly and we have not included most personal or household packages. While we have indicated what we think the highlights are, you should always seek financial advice to assist you in determining the best route to these packages.
This list will be updated as new stimulus announcements are made.
$130b jobkeeper payment to keep Australians in a job
This is a highlight for social enterprises. Eligible employers include not-for-profits/ charities, companies, partnerships, trusts and sole traders – with an annual turnover of less than $1 billion who self-assess that they have had a reduction in revenue of 30% or more (15% for charities registered with the ACNC), since 1 March 2020 over a minimum one-month period. Eligible employees include FT/PT stood down employees, and casual employees who have been with their employer for at least 12 months.
Employers will receive a payment of $1,500 (before tax) per fortnight for eligible employees. The payment will be paid to employers, for up to six months, for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer. For employees who have been stood down, they will need to reengage with the business. The first payments will be made in the first week of May (and back dated to the 1 March) from the Australian Taxation Office.
Boosting cash flow for employers
Another highlight for social enterprises. The Government is providing up to $100,000 to eligible small and medium sized businesses, and not‑for-profits (including charities) that employ people, with a minimum payment of $20,000.
Eligible businesses with a turnover of less than $50 million that employ staff will receive a payment equal to 100% of their PAYG withheld, delivered as a credit in their BAS, with a minimum $10,000 payment and up to $50,000. The first payment will be available from 28 April 2020.
Also, eligible entities will receive an additional payment equal to the total of all the Boosting Cash Flow for Employers payments received. These payments will be from 28 July 2020.
Increasing the instant asset write-off
For assets first used or installed ready for use from 12 March until 30 June 2020, the Government is increasing the instant asset write-off threshold from $30,000 to $150,000 and expanding access to include businesses with aggregated annual turnover of less than $500 million (up from $50 million) until 30 June 2020.
Unfortunately, if you operate as a not-for-profit you aren’t paying tax, so this usually wouldn’t apply. For private companies if you have significant capital assets you can claim the cost of the capital assets as an immediate tax deduction.
Backing business investment
This package, similar to the instant asset write-off is not relevant for most not-for-profits. Government is introducing a time limited 15 month investment incentive (12 March to 30 June 2021), through accelerated depreciation deductions. Businesses with a turnover of less than $500 million will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.
Supporting apprentices and trainees
Eligible employers can apply for a wage subsidy of 50 per cent of an apprentice’s or trainee’s wage for up to 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 that employs that apprentice.
Coronavirus SME guarantee scheme
The Government will establish the Coronavirus SME Guarantee Scheme which will support small and medium enterprises (SMEs) to get access to working capital to help them get them through the impact of the coronavirus. Under the Scheme, the Government will guarantee 50% of new loans issued by eligible bank and non-bank lenders to SMEs.
If a social enterprise is in position to take on debt (perhaps you are inundated with new business), they’ll likely be working with a bank or lender to submit a proposal and undergo a due diligence process.
Providing temporary relief for financially distressed businesses
- The Government is proposing increasing the threshold at which a creditor can issue an insolvency or bankruptcy statutory demand on a company to $20,000 (currently as low as $2,000) and companies will be allowed six months to respond compared with the current 21 days.
- The package also includes some temporary relief for directors from any personal liability for trading while insolvent during the coronavirus crisis.
- The Government expects and accepts that companies will not be able to comply with the Corporations Act in such ways as holding general meetings. For the next six months, the Treasurer will be granted temporary powers to deal with these issues as they arise.
ATO relief – options available to assist businesses impacted by COVID-19
This relief is useful if you’re experiencing cash-flow challenges.
- Deferring by up to 4 months the payment date of amounts due through BAS (including PAYG instalments), income tax assessments, FBT assessments and excise
- Allow businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to
- Allowing businesses to vary PAYG instalment amounts to zero for the March 2020 quarter. Businesses that vary their PAYG instalment to zero can also claim a refund for any instalments made for the September 2019 and December 2019 quarters
- Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to tax liabilities
- Allowing affected businesses to enter into low-interest payment plans for their existing and ongoing tax liabilities.
The ATO assistance is not automatic, taxpayers must first contact the ATO to request assistance, and if eligible, the ATO will tailor the assistance package for the relevant taxpayer.
- Almost $6 million will be provided to Victorian homelessness organisations to help protect Victorians at risk of or experiencing homelessness because of the COVID-19 virus and manage any outbreaks.
- Full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with payroll of less than $3 million. The same businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021.
- The Victorian Government Business Support Fund is now distributing $10,000 grants to eligible small businesses impacted by COVID-19 and is open for applications
- The Government will establish a $500 million Working for Victoria Fund in consultation with the Victorian Council of Social Services and Victorian Trades Hall Council. If you’re a social enterprise assisting job seekers, the fund will help workers who have lost their jobs find new opportunities, including work cleaning public infrastructure or delivering food – providing vital contributions to our state’s response to the pandemic and affording those Victorians security when its needed most. https://www.vic.gov.au/workingforvictoria
Many social enterprises are likely to qualify for Victorian Government Business Support Fund grants. Eligibility criteria and information on how to apply can be found at: https://www.business.vic.gov.au/support-for-your-business/grants-and-assistance/business-support-fund
New South Wales
- $10,000 grants to provide fast relief for NSW small businesses battling COVID-19. $750 million Small Business Support Fund will be available through Service NSW within a fortnight and remain open until 1 June 2020 https://www.nsw.gov.au/your-government/the-premier/media-releases-from-the-premier/10000-grants-to-provide-fast-relief-for-nsw-small-businesses-battling-covid-19/
- $450 million for the waiver of payroll tax for businesses with payrolls of up to $10 million for six months (the rest of 2019-20).
- Payroll Tax – deferral of payroll tax for business with payrolls over $10 million for six months.
- $56 million to bring forward the next round of payroll tax cuts by raising the threshold limit to $1 million in 2020-21.
- $80 million to waive a range of fees and charges for small businesses including bars, cafes, restaurants and tradies.
- $250 million to employ additional cleaners of public infrastructure such as transport assets, schools and other public buildings.
- More than $250 million to bring forward maintenance on public assets including social housing and crown land fencing.
- Creation of a $1 billion Working for NSW fund to sustain business, create new jobs and retrain employees.
- Deferral of rents for six months for commercial tenants with less than 20 employees in all Government-owned properties.
- $34 million boost in funding to prevent homelessness.
- $10 million to support charities
- Payroll Tax refund for two months’ worth of payroll tax for small and medium businesses and large businesses specifically impacted. Additionally, for small and medium businesses a three-month payroll tax holiday, and a twelve-month payroll tax payment deferral for any of these Queensland businesses.
- Liquor licencing fees waived for venues that have had to close their doors, providing rent relief for businesses who rent premises from the state government and giving sole traders, small and medium businesses a $500 rebate on their power bill for this year.
- $500 million concessional loan facility comprising loans of up to $250,000 with an initial 12 month interest free period for businesses to retain staff.
- $8 million in funding relief for arts organisations through Arts Queensland.
If a social enterprise is in position to take on debt (perhaps you are inundated with new business), they’ll likely be working with a bank or lender to submit a proposal and undergo a due diligence process.
- $300m Business and Jobs Support Fund will be used to directly assist individual businesses and industry sectors facing potential collapse and the loss of thousands of jobs. For more information, and how to apply to the Funds, email: BusinessandJobsSupportFund@sa.gov.au ; CommunityandJobsSupportFund@sa.gov.au
- $250m Community and Jobs Support Fund – Community organisations, such as sporting, arts and recreational bodies, non-profit organisations and some other industry sectors will be assisted.
- 6-month waiver for all businesses with an annual payroll (grouped) up to $4 million, eligible businesses won’t have to pay any payroll tax from April to September.
- Employers with grouped annual wages above $4 million able to defer payroll tax payments for 6 months on demonstration of significant impacts on cash flow of coronavirus.
Australian Capital Territory
- A guarantee to continue providing a six month waiver of payroll tax any businesses whose operations are directly affected by the ‘prohibited activities list’ now, and into the future.
- Waiving of fees for food business registration and liquor licensing fees (excluding off-license) and outdoor dining fees and a $750 rebate for small business owners to help with power bills.
- Interest free deferrals of payroll tax commencing 1 July 2020 for all businesses up to a payroll threshold of $10 million. Small businesses are already exempt from payroll tax due to the highest tax free threshold ($2m) in Australia.
- Additional funding of $7 million for non-government organisation partners to meet increased service demand for emergency relief will also be rolled out as part of the ACT Government Community Support package.
- A new $500,000 round of grants funding for the arts sector.
- A rebate on the fixed charge for 2019-20 on commercial rates for properties with an AUV below $2 million, which particularly targets businesses who own their own premises.
- Rental relief to commercial and community tenants of ACT Government owned properties that have been significantly impact by the virus.
- Deferring the issuing of notices for 2019-20 quarter four commercial rates instalments by four weeks to provide immediate cash flow assistance to commercial property owners.
- $159 million from Lotterywest to establish the COVID-19 Crisis Relief Fund to support not-for-profit sport, arts and community groups in dealing with the coronavirus.
- Payroll tax will be waived for a four-month period between March 1, 2020 to June 30, 2020 for small-to-medium sized businesses with Australia-wide annual wages of less than $7.5 million in 2019-20.
- $100.4 million has been allocated to waive a wide range of license fees for small and medium‑sized businesses in COVID-19 impacted industries for the next 12 months.
- Interest-free payment arrangement and for late payment penalties to be waived for payroll tax, transfer duty, landholder duty, vehicle license duty or land tax.
- Available concessions and credit for electricity & water bills including some specific to community service organisations.
- Funding certainty has been provided to community service providers, with government agencies to continue to pay contracts with the sector until at least June 30, 2020.
- $20 million for the provision of interest free loans to businesses in the hospitality, tourism, seafood and exports sectors. The loans will be available to small businesses with a turnover of less than $5 million for the purpose of purchasing equipment or restructuring business operations and will be interest free for a period of up to three years.
- Employers in the Hospitality, Tourism, and Seafood industries will not be required to lodge payroll tax returns for March, April and May 2020.
- Other small to medium businesses with an annual payroll of up to $5 million in Australian wages will be able to apply, based on the immediate impact of the virus on their businesses, to not lodge payroll tax returns for the three months March, April and May 2020.
- Youth employment payroll tax rebate scheme for people aged 24 years and under, for one year from 1 April 2020.
- $2.1 million for one-off $5,000 grants for businesses that hire an apprentice or trainee, complementing the Federal Government’s apprenticeship package.
- An additional $1 million in grants to mental health organisations to support individuals experiencing mental health difficulties as a result of the challenges associated with the COVID-19 pandemic.
- Increase the Small Business Interest Free Loan Scheme from $20 million to $50 million which is now available for businesses with turnovers less than $10 million.
- Provide a new $40 million Small Business Grants Program with $20 million set aside for an emergency grants program of $2500 cash payments.
- Provide a Digital Ready for Business Program, to assist businesses take their business online.
- Provide Business Continuity Advice with $750,000 in funding made available for businesses to seek cash flow and continuity advice, including a $50,000 grant to Small Business Council of Tasmania. A further $200,000 will be provided to the THA to provide business continuity and cash flow advice, and $200,000 will be provided to Rural Business Tasmania for the extension of its Rural Financial Counselling service.
- The Government will provide $1.5 million to support the Creative and Cultural Industries.
- $5 million funding to enable NGOs to support vulnerable people through the provision of food hampers, medical supplies or counselling
- The payroll tax waivers for the hospitality, tourism and seafood sectors, and for Tasmanian businesses with payrolls less $5 million announced in the first Tasmanian Stimulus Package, will be extended to ensure that these industries pay no payroll tax for the entire 2019-20 year. This will include refunds and waivers to provide cash where it is required now.
- $60 million stimulus package to protect Territorians from the deep economic impacts of the coronavirus pandemic.
- The NT Government has expanded Home Improvement Scheme, where all Territory homeowners will receive $6000 to undertake renovations and improvements to their property by a local business or tradie. People will need to put in $2000 to receive the additional $6000 or alternatively they can put in $1000 and receive $4000.
- The stimulus package will give eligible businesses $10,000 for upgrades as a part of a new Business Improvement Scheme aimed at helping businesses attract more customers. If a business also wants to contribute its own $10,000, the government will pitch in an additional $10,000 for a total of $30,000.
- $5 million Business Structural Adjustment package assisting businesses who need to adjust to the 100 person rule or to establish or upgrade their online presence to adjust to changing behaviours of consumption.
- $5 million Immediate Works Grants Package. This package reintroduces the Immediate Works Grant for incorporated not-for-profit and community organisations – including clubs – to undertake repairs, renovations and upgrades to their premises/facilities. Applicants can apply for grants of up to $50,000, which will then be matched dollar-for-dollar if the organisation also puts in their own $50,000. Up to $200,000 on a dollar-for-dollar matching basis for amounts above $100,000
- $50 million Small Business Survival Fund to help small businesses survive the physical distancing requirements.
- All agencies have been directed to be responsive and flexible to requests including the fast tracking of procurement decisions wherever possible.
For your social enterprise:
These links provide some general advice for small business of which many social enterprises are. There are lots of useful templates you can use e.g. templates for rent relief request letters and business continuation plans.
For your staff:
The federal government has announced several initiatives including support for mental health services, which may be relevant for your staff who have expressed employment related distress. https://www.pm.gov.au/media/11-billion-support-more-mental-health-medicare-and-domestic-violence-services-0
In particular the following sources of support may be useful:
- Head to Health – The Government’s digital mental health portal which provides links to trusted Australian online and phone supports, resources and treatment options.
- Beyond Blue – dedicated coronavirus wellbeing support line is currently being developed. Existing phone and webchat support services are still available.
- Lifeline – phone, text and webchat support.
- Kids Helpline – phone, webchat or email support service for children.