Governments 2nd Stimulus Package

For a detailed analysis of the 2nd Stimulus package announced Sunday - click on this

Treasury Fact Sheet

Thanks to "Accountants Daily" (accountantsdaily.com.au) Here are some key details:

The second stimulus package will now build on the initial tax-free cash payments to small and medium businesses, rising to up to $100,000, with a minimum payment of $20,000, up from the previously announced $25,000 and $2,000 limits.

The enhanced scheme will be delivered in two phases: Firstly, with employers set to receive a first payment equal to 100 per cent of their salary and wages withheld, up to a maximum of $50,000, when businesses lodge their activity statements for the 28 April and 28 July quarterly due dates.

Eligible businesses that pay salary and wages will receive a minimum payment of $10,000, even if they are not required to withhold tax.

Secondly, an additional payment equal to the first payment will be made after businesses lodge their BAS by the 28 July and 28 October quarterly due dates.

For example, a business that receives $50,000 for the period up to June will subsequently receive another $50,000 for the period up to September upon lodgement of their BAS.

Monthly BAS lodgers will receive the first payment for the March 2020, April 2020, May 2020 and June 2020 lodgements, with a 300 per cent calculation in the March activity statement to provide the same treatment as quarterly lodgers.

The second payment for monthly BAS lodgers will be released once they lodge their June 2020, July 2020, August 2020 and September 2020 lodgements.

All entities are required to be active to receive the payment, with the measure set to benefit around 690,000 businesses employing around 7.8 million people, and around 30,000 NFPs.

The expanded scheme is estimated to cost $31.9 billion over the forward estimates period.

Temporary insolvency relief

Directors will now be temporarily relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business, with the measure set to run for six months.

According to Treasury, egregious cases of dishonesty and fraud will still be subject to criminal penalties. Any debts incurred by the company will still be payable by the company.

Further, the government will increase the current minimum threshold for creditors issuing a statutory demand on a company under the Corporations Act 2001 from $2,000 to $20,000 for six months.

The statutory time frame for a company to respond to a statutory demand will also be extended temporarily from 21 days to six months.

Likewise, the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor will temporarily increase from its current level of $5,000 to $20,000.

The time a debtor has to respond to a bankruptcy notice will be temporarily increased from 21 days to six months.