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Covid-19 Government Support & Grant
During Covid-19, The government has put out multiple incentives and grants to help businesses keep running. Below are some options that may help maintain your business during this hard period of time.
Research and Development (R&D) Tax Incentive
The R&D Tax Incentive is a self-assessment program, available for eligible businesses in all industry sectors that conduct at least one experimental activity for the purpose of generating new knowledge, involving the application of a systematic progression of work proceeding from investigation of technical hypothesis in an experiment leading to a logical conclusion, in which the outcome of experiment cannot be known in advance on the basis of existing knowledge.
If you are a business with an aggregated turnover of less than $20 million, not in a taxable profit position and conducting eligible R&D activities, you can claim 43.5 cents in a dollar out of the expenditure incurred on eligible R&D activities. This means if you claim $100,000 eligible expenditure, you can get $43,500 cash refund.
Export Market Development Grant (EMDG)
The EMDG Scheme provides up to 50% reimbursement to Australian exporters that have spent and paid export promotion expenses above $5,000 to develop export market. Each applicant may receive a grant of up to $150,000 per application to a maximum of eight annual grants.
JobKeeper Payment
The JobKeeper subsidy of $1,500 per fortnight is available for small businesses that have been impacted by COVID-19 and employ workers. The subsidy must be paid to each eligible worker who was employed by the business on 1 March 2020 and who continues to work for the business.
The subsidy is available to businesses for up to 6 months. The program starts on Monday 30 March 2020, and businesses will receive the first JobKeeper subsidy payments in the first week of May.
The NSW Small Business COVID-19 Support Grant
A small business support grant of up to $10,000 is available for businesses that have been highly impacted by Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020 defined as a decline in turnover of 75% compared to the equivalent period in 2019.
Boosting Cash Flow for Employers
Eligible businesses and not-for-profit (NFP) organisations who employ staff will receive between $20,000 to $100,000 in cash flow boost amounts by lodging their activity statements up to the month or quarter of September 2020.
The cash flow boosts will be delivered as credits in the activity statement system.
An additional cash flow boost will be applied when activity statements for each monthly or quarterly period from June to September 2020 are lodged. These credits are equal to the total boosts credited for March to June 2020. They will be paid out in either two or four instalments depending on your reporting cycle.
The subsidy is available to businesses for up to 6 months. The program starts on Monday 30 March 2020, and businesses received the first JobKeeper subsidy payments in the first week of May.
Early Release of Superannuation
Individuals who have suffered a decrease in income or become unemployed as a result of COVID-19 can apply for early release of superannuation, to a total value of $10,000 of their super until 30 June 2020 and a further $10,000 from 1 July 2020 until 24 September 2020.
Electricity and Gas Network Relief Package
Small businesses in NSW, Victoria and SA that are mothballed due to COVID-19 may be eligible for electricity and gas tariff rebate from 1 April to 30 June 2020. Eligibility criteria apply, including usage figures and time limits.
Increased Instant Asset Write-Off
The Government has increased instant asset write off threshold to $150,000 for businesses who firstly use new or second-hand assets or install these assets ready for use for the period from 12 March 2020 until 30 June 2020.
If you run a small business and choose to use the simplified depreciation rules, you must use instant asset write-off on all eligible assets. Businesses with an aggregated turnover of $500 million or more are not eligible to use instant asset write-off.
From 1 July 2020 the instant asset write-off will only be available for small businesses with an aggregated turnover of less than $10 million and the threshold will be $1,000.
Backing Business Investment – Accelerated Depreciation
If you are an entity with aggregated turnover less than $500 million in the income year and do not use the simplified depreciation rules, you may be eligible to deduct an amount if the asset is a qualifying asset.
The amount you can deduct in the income year the asset is first used or installed ready for use is:
- 50% of the cost (or adjustable value where applicable) of the depreciating asset
- Plus the amount of the usual depreciation deduction that would otherwise apply but calculated as if the cost or adjustable value of the asset were reduced by 50%.
Together with the instant asset write-off rules, the accelerated depreciation deduction applies to assets with a cost (or adjustable value if applicable) of:
- $150,000 or more in the 2019–20 income year
- $1,000 or more in the 2020–21 income year
Facebook Small Business Grants Program
Facebook has announced a USD$100 million small business support scheme. Up to 30,000 eligible small businesses in more than 30 countries will be able to receive a grant from Facebook.
The program includes cash grants and ad credits for up to 30,000 eligible businesses in 30 countries, including Australia.
Applications are not yet open, but you can register with Facebook to receive updates.
