Australian Government’s Economic Response to COVID-19 – Cash Flow Assistance for Businesses

Boosting Cash Flow for Employers

The government is providing up to $100,000 to eligible small and medium sized businesses, and not-for-profit 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, employers will receive a payment equal to 100% of their salary and wages withheld, with the maximum payment being $50,000.  In addition, a minimum payment of $10,000.

An additional payment is also being introduced in the July-October period. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received.  This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.  This will provide cash flow support and help employers to retain staff and keep operating.

This cash flow boost provides a tax free payment to employers and automatically calculated by the Australian Taxation Office (ATO).  There are no new forms required.

 

Eligibility

Small and medium sized businesses and Not For Profits that employ workers will be eligible.  Eligibility will generally based on prior year turnover.

• The payment will be delivered by the ATO as an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.
• Eligible employers that withhold tax to the ATO on their employees’ salary and wages will receive a payment equal to 100% of the amount withheld, up to a maximum payment of $50,000.
• Eligible employers that pay salary and wages will receive a minimum payment of $10,000 even if they are not required to withhold tax, because the employees are below the tax free threshold.
• The payments will only be available to active eligible employers established prior to 12 March 2020

 

Eligibility – Additional payment

To qualify for the additional payment, the entity must continue to be active in the July – October 2020 quarter.

For monthly activity statement lodgers, the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to a quarter of their total initial Boosting Cash Flow for Employers payment following the lodgment of their June 2020, July 2020, August 2020 and September 2020 activity statements (up to a total of $50,000).

For quarterly activity statement lodgers the additional payments will be delivered as an automatic credit in the activity statement system. This will be equal to half of their total initial Boosting Cash Flow for Employers payment following the lodgment of their June 2020 and September 2020 activity statements (up to a total of $50,000).

 

Timing – Boosting Cash Flow for Employers payments

The Boosting Cash Flow for Employers payment will be applied to a limited number of activity statement lodgments. The ATO will deliver the payment as a credit to the entity upon lodgment of their activity statements. Where this places the entity in a refund position, the ATO will deliver the refund within 14 days.

Type of lodger	Eligible period	Lodgment due date
Quarterly	Quarter 3 (January, February and March 2020) Quarter 4 (April, May and June 2020)	28 April 2020   28 July 2020
Monthly	March 2020 April 2020 May 2020 June 2020	21 April 2020 21 May 2020 22 June 2020 21 July 2020

 

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. To provide a similar treatment to quarterly lodgers, the payment for monthly lodgers will be calculated at three times the rate (300 per cent) in the March 2020 activity statement.

The minimum payment will be applied to the entities’ first lodgment.

For more information refer to the Cash Flow Assistance Fact Sheet from Treasury.gov.au

 

back