Coronavirus Economic Response Package Omnibus Act 2020: An Overview

Tuesday 31 March 2020 @ 12.30 p.m. | Legal Research | Taxation

On 23 March 2020, Federal Treasurer Josh Frydenberg introduced a package of bills to the House of Representatives containing a number of measures to support the Australian community and economy in response to the various economic challenges posed by the Coronavirus. The bills in the package passed both houses of parliament on the same day. On 24 March 2020, all the Bills received Royal Assent.

The following Acts were part of the package:

  • The Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (“the Omnibus Act”)
  • The Guarantee of Lending to Small and Medium Enterprises (Coronavirus Economic Response Package) Act 2020 (Cth)
  • The Australian Business Growth Fund (Coronavirus Economic Response Package) Act 2020 (Cth)
  • The Assistance for Severely Affected Regions (Special Appropriation) (Coronavirus Economic Response Package) Act 2020 (Cth)
  • The Structured Finance Support (Coronavirus Economic Response Package) Act 2020 (Cth)
  • The Appropriation (Coronavirus Economic Response Package) Act (No. 1) 2019-2020 (Cth)
  • The Appropriation (Coronavirus Economic Response Package) Act (No. 2) 2019-2020 (Cth)
  • The Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020 (Cth)

This article will focus on the measures set out in the Omnibus Act.

Support for Small and Medium-Sized Businesses

Schedule 1 of the Omnibus Act amends income tax legislation in order to enhance instant asset write-off provisions for small and medium-sized businesses.  Eligible businesses will now be able to immediately write off purchases of eligible assets that cost less than $150,000 per unit. The previous threshold for eligible assets was $30,000. The Omnibus Act also amends the legislation to increase the maximum aggregated threshold of eligible entities from $50 million to $500 million.

Economic support and supplement payments for individuals

Schedule 4 of the Omnibus Act contains provisions for two rounds of economic support payments to eligible individuals. Each round of payment amounts to $750. The first payments will be made to individuals who, during the period of 12 March 2020 and 13 April 2020:

  • Receive Social Security or Veteran’s income support
  • Receive Farm Household Allowance
  • Receive a Family Tax Benefit
  • Hold a Pensioner Concession Card
  • Hold a Commonwealth Senior Health Card
  • Hold a Commonwealth Gold Card

On 10 July 2020, individuals who were eligible for the first payment will receive the second economic support payment, if they still fulfil the aforementioned criteria, and providing that they reside in Australia on that date. However, individuals who receive the new Coronavirus supplement, outlined in Schedule 11 of the Omnibus Act, will not be eligible for this second payment.

Schedule 11 of the Omnibus Act contains provisions that amend the Social Security Act 1991 (Cth) in order to provide for additional financial assistance for those financially impacted by the Coronavirus. Individuals who are eligible, or are receiving the income support payments, will receive an additional fortnightly supplement. The recipients of the following payments will be eligible for the supplement:

  • Jobseeker payment
  • Youth Allowance
  • Parenting Payment
  • Special Benefit
  • Farm Household Allowance

The supplement will be available for a six month period, starting on 27 April 2020. Recipients of other social security payments may also be extended the supplement, and the period of the supplement may also be extended if specified by the Minister for Families and Social Services in a legislative instrument.

Recipients of the Jobseeker payment, Youth Allowance, and Parenting Payment will also be granted exemptions from:

  • The assets test
  • Liquid assets waiting period
  • Ordinary waiting period
  • Newly arrived resident’s waiting period
  • Seasonal worker preclusion periods

Businesses and Individuals in Financial Distress

Schedule 12 contains provisions to afford temporary relief for businesses and individuals who experience financial distress due to the Coronavirus.

For businesses, the Omnibus Act contains amendments in order to:

  • Increase the threshold for creditors to initiate bankruptcy proceedings
  • Increase the time period for debtors to respond to a bankruptcy notice
  • Extend the period of protection a debtor gets after making a declaration or intention to present a debtor’s petition
  • Relieve directors from personal liability for trading while insolvent

For owners of businesses, the Australia Tax Office will offer solutions such as:

  • Temporary reduction of payments
  • Deferrals
  • Delaying or withholding enforcement actions

Early Release of Superannuation

Schedule 13 of the Omnibus Act contains amendments to the Superannuation Industry (Supervision) Regulations 1994 (Cth) and the Retirement Savings Accounts Regulations 1997 (Cth) which allows for individuals and sole traders financially impacted by the Coronavirus to access up to $10,000 of their superannuation in the 2019-20 financial year. The amount released from superannuation will be tax free, and an additional $10,000 can be accessed in the following financial year. Applications for early access must be made within six months of the assent date of the Omnibus Act, being 24 March 2020.

Additional amendments

The Omnibus Act also contains provisions which:

  • Allow businesses with an aggregate turnover of less than $500 million to deduct capital allowances for depreciating assets at an accelerated rate (Schedule 2)
  • Makes additional amendment to various Acts in order to support the Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020 (Cth) (Schedule 3)
  • Enables the Director of Human Biosecurity to delegate any or all of their functions and powers regarding human biosecurity control orders to Department of Health senior executive officers (Schedule 5)
  • Waives the environmental management charges, under the Great Barrier Reef Marine Park Regulations 2019 (Cth), for the next 9 months (Schedule 6)
  • Introduces new government spending measures to assist employers in retaining apprentices and trainees, and provide financial assistance to the Australian aviation industry (Schedule 7)
  • Establishes new powers for Treasury ministers to make instruments in order to grant certain classes of individuals relief from their obligations under the Corporations Act 2001 (Cth) and the Corporations Regulations 2001 (Cth) (Schedule 8)
  • Allows for extended child absences from childcare from the current 42 day limit (Schedule 9)
  • Reduce the minimum payment amounts for account-based pensions and equivalent annuity products by half for the current and next financial year (Schedule 10)
  • Increases the Medicare levy for low-income households, and increases the levy for singles, families, seniors, and pensioners, in line with the CPI (Schedule 14)
  • Moves the public release date of the intergenerational report under the Charter of Budget Honesty Act 1998 (Cth) to 30 June 2021 (Schedule 15)
  • Allows Ministers for Acts and legislative instruments to defer a sunset date of legislation, where the sunset date is on or before 15 October 2020 (Schedule 16)

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Coronavirus Economic Response Package Omnibus Act 2020 (Cth) and Coronavirus Economic Response Package Omnibus Bill 2020 (Cth) supporting documents available from TimeBase’s LawOne Service

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