Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s update.
Australia To Extend Bankruptcy Protection Rules Until End of 2020
Australia will extend its temporary insolvency and bankruptcy protection rules until the end of this year, providing businesses a lifeline to recover from the impacts of COVID-19.
The rules, which were first introduced in March and originally due to expire on 30 September 2020, indicate that creditors cannot issue bankruptcy notices to businesses for debts below A$20,000.
The creditors’ notice period to act on debts could also be extended, allowing businesses to keep trading without paying rent, tax, and loans.
Contact us if you have any questions and we’ll help create a plan for your business.
Businesses on JobKeeper – Pay employees by 13th Sep for fortnight 12
For those businesses eligible for JobKeeper please ensure your wages are paid by 13th September in order to claim JobKeeper for the period started August 31st and ending September 13th.
You can see JobKeeper Key Dates on the ATO’s website but please get in touch if you have any questions.
JobKeeper 2.0 Bill Passed By Federal Parliament
The JobKeeper Amendment Bill 2020 was passed by Federal Parliament this week. Below are the key changes to the scheme:
Extending the period of operation– The JobKeeper scheme and the provisions that allow employers to temporarily vary the working arrangements (by way of JobKeeper enabling directions or agreements under Part 6-4C of the Fair Work Act 2009) will now end on 28 March 2021 instead of 28 September 2020.
New payment rates– The current JobKeeper subsidy rate for full-time workers of $1,500 a fortnight will drop to $1,200 from 28 September 2020, and then to $1,000 a fortnight from January 2021. Meanwhile, those who worked less than 20 hours per week in the relevant reference period (being the four-week pay period before either 1 March 2020 or 1 July 2020) will receive $750 from 28 September 2020, and then to $650 a fortnight from January 2021.
Legacy Employers– Employers who no longer qualify for JobKeeper after 28 September will be classified as legacy employers, and will have to satisfy a 10% decline in turnover to have access to modified JobKeeper enabling directions (Fair Work).
Decline in Turnover Test Certificate– Employers will need to obtain a 10% decline in turnover test certificate from an eligible financial service provider, including a BAS or Tax agent.
These modified directions include reducing an employee’s ordinary hours to a minimum of 60% of the employee’s ordinary hours as they were at 1 March 2020, but cannot result in the employee working less than two consecutive hours in a day.
A dispute can be brought before the Fair Work Commission about whether an employer holds a 10% decline in turnover certificate for the relevant period, including a dispute about whether a certificate is valid.
Penalty– A penalty of up to $13,320 for individuals and $66,600 for body corporates or employers will be imposed if an employer doesn’t meet the 10% decline in turnover test and knowingly or recklessly tries to use the provisions or fails to notify employees that a JobKeeper enabling direction or agreement is not continuing due to not having met the requirements.
JobKeeper Turnover Test Requirements
From the 28th of September 2020:
- businesses looking to claim the JobKeeper payment will be required to demonstrate that they experienced a decline in turnover using actual GST turnover, rather than projected GST turnover.
- businesses will be required to reassess their eligibility with reference to their actual GST turnover in the September 2020 quarter to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021 (the first extension period).
From 4th January 2021:
- businesses will need to further reassess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they suffered a decline with reference to their actual GST turnover in the December 2020 quarter to be eligible for the JobKeeper payment from 4 January 2021 to 28 March 2021 (the second extension period).
The required decline in GST turnover percentages will remain the same:
- 30% for an aggregated turnover of $1 billion or less
- 50% for an aggregated turnover of more than $1 billion
- 15% for ACNC-registered charities other than universities and schools.
Government-backed COVID-19 Loans Extended
The government is extending its small business COVID-19 loans scheme until June 2021. If you need help to access these loans or you want to find out if you are eligible, don’t hesitate to drop us a message.
How Much Debt Can Your Business Take On?
During an economic downturn when business is slow, a cashflow boost in the form of debt might be necessary to maintain the smooth running of your business. While there are plenty of lending options to consider including government-backed funding schemes, you shouldn’t borrow what you can’t pay back.
So the question is: How much debt is too much?
This timely Forbes article teaches how to calculate three important metrics that will keep you honest about how much debt you can take on. However, if you need personalised advice based on your unique business situation drop us a message.
Helping Your Team Overcome the Trauma of the Pandemic
When COVID-19 hit, we witnessed a significant change in our lives. While the immediate concerns involve worker safety, disrupted supply chains, and financial losses, the pandemic can also adversely impact our mental health.
Although some people brush off the trauma that the crisis has caused, how you cope can affect your life and your work performance in ways you may not imagine. This Harvard Business Review article outlines the things business leaders can do to support their team members.
- Build a culture of connection by intentionally checking in with your team on a regular basis.
- Offer flexibility and be inclusive.
- Communicate more than you think you need to.
- Modify policies and practices to reduce stress for everyone.
The best part about adopting these steps is that they won’t just allow you to help the sanity of your team during and after this pandemic, it can also make you a more effective leader even without this crisis. If you need personalised guidance on improving the overall performance of your business as you recover from the impacts of COVID-19, feel free to get in touch.
Get in touch
Contact us if you have any questions.