The Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Bill 2020 (Cth) (“the Bill”) was first introduced on 23 March 2020 by Federal Treasurer Josh Frydenberg, as part of a package of bills aimed to support the Australian community and economy affected by the coronavirus. The Bill passed both houses of Parliament on the same day, and was assented on 24 March 2020.
The Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020 (Cth) (“the Cash Flow Boost Act”) provides for two payments to support employers to encourage the retention of employees and maintain operations through cash boost payments. The measures will provide between $20,000 and $100,000 to eligible businesses and not-for-profits, including charities. The Treasurer, in his second reading speech, estimated that approximately 690,000 businesses and 30,000 not-for-profits will receive these benefits. The payments are to be made in two separate bursts.
In order to be eligible for the first cash flow boost payment, entities will need to show that they have made a payment in a period, which is either in a month between March 2020 to June 2020, or in a quarter ending on March 2020 or June 2020. An amount from this payment have to have been withheld by the entity within this period under provisions in Subdivisions 12-B, 12-C, or 12-D in Schedule 1 of the Taxation Administration Act 1953 (Cth). These subdivisions relate to:
The entity will also need to prove, that if the payment was made in a monthly period, that the entity qualifies as either a large or medium withholder for the month. If the payment was made in a quarterly period, the entity will need to show that it was a small withholder for the month that starts in the quarter. These thresholds are defined as per the Income Tax Assessment Act 1997 (Cth) and Taxation Administration Act 1953 (Cth) as follows:
The entity must also show that they were a small or medium business entity for most of the recent income year. Otherwise, the Commissioner of Taxation, must be reasonably satisfied that they were a small to medium businesses for the income year.
The entity must also show that it is either:
If the entity had an ABN, the entity needs to either have:
In fulfilling these requirements, the entity must complete the approved form and lodge it to the Commissioner of Taxation.
If the entity, or an associate and/or agent of the entity is found to be involved in a scheme to make the entity eligible for or increase the entity’s entitlement for the first cash flow boost, the entity will no longer be eligible for the payment.
Entities that were entitled to the first payment, will receive the second cash flow boost payment after they lodge activity statements for the period of June 2020 to September 2020.
The Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (“the Omnibus Act”) makes additional amendments to various other acts in order to support the introduction of these new measures. The Omnibus Act is discussed in a separate TimeBase article.
TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products. Nothing on this website should be construed as legal advice and does not substitute for the advice of competent legal counsel.
Boosting Cash Flow for Employers (Coronavirus Economic Response Package) Act 2020 (Cth), Bill and supporting documents available from TimeBase’s LawOne Service
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