How to get $25,000 from Scott Morrison's stimulus package?

Ljungle on 17/03/2020 - 10:03

Hi all,

A friend of mine has been running a laundry business for over 20 years - however, his revenue has declined nearly 70% since the outbreak of COVID-19. He told me that he will go bankrupt in another 5~6 weeks if it continues.

Scott Morrison has announced a stimulation package which includes up to $25,000 cash payment to small businesses. However, I have not seen any detailed explanation about this plan - anyone knows how to get it? This might be the last chance for my friend to save his business.

Regards,
Jungle

Financial

Comments

  • Hybroid on 17/03/2020 - 10:04
    +1

    $6.7 billion to Boost Cash Flow for Employers by up to $25,000 with a minimum payment of $2,000 for eligible small and medium-sized businesses. The payment will provide cash flow support to businesses with a turnover of less than $50 million that employ staff, between 1 January 2020 and 30 June 2020. The payment will be tax free. This measure will benefit around 690,000 businesses employing around 7.8 million people. Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April with refunds to then be paid within 14 days.

    https://www.pm.gov.au/media/economic-stimulus-package

    • jungle on 17/03/2020 - 10:14
      +1

      Thanks for the quick response - but I'm not quite sure what "Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement" means? There are so many items in the Business Activities Statement. As Scott Morrison said that this is to provide cash flow to support small businesses to pay wages, I guess it's possibly linked to the item W1 "Total salary, wages and other payments"? So Scott Morrison will refund 50% of that item, up to $25,000?

      • bobbified on 17/03/2020 - 10:23
        +20

        So Scott Morrison will refund 50% of that item, up to $25,000?

        So Scott Morrison Australian taxpayers will refund 50% of that item, up to $25,000?

        Fixed your question!

      • andyhui01 on 18/03/2020 - 09:50
        +2

        Do you regularly do BAS statements? It would be difficult to explain this to someone who has not filled in one before.

        Tell your friend to look up the company's recent BAS statement for last quarter and look for field W5 (or in most cases, just W2 which is normally the same for a small business). Unless the number of employees changes drastically between quarters, your friend will receive 1/2 that when the BAS statement is submitted early April. I think the minimum amount is $2000 if the amount in W5 is less than $4000.

        *This is assuming it is a small business and they are submitted it quarterly.

      • eyeballz2770 on 18/03/2020 - 11:18
        +1

        The BAS is not a complicated document. You can see an ATO image of one here:
        https://www.ato.gov.au/uploadedImages/Content/Images/27808-2…

        Now apply andyhui01's reply to the document.

        • Member 0230 on 19/03/2020 - 08:41

          Thanks for sharing. I wonder if a sharper/higher-res image is available?

          • bluesky on 19/03/2020 - 17:56
            +1

            @Member 0230: Here is the sample BAS from ATO.
            Most likely, people do not use the paper form anymore, but lodge online - which gives 2 extra weeks to pay any amount due.

  • jimbobaus on 17/03/2020 - 10:05
    +29

    They are assessed and automatically paid via the ATO system
    Their linked Bank account will get the credit when they are processed.
    They do not automatically get the full 25K its up too…. and its based on tax declarations from previous years

    Source: We rang the ATO and asked what the process is

    • John Kimble on 17/03/2020 - 10:26
      +29

      Source: We rang the ATO and asked what the process is

      You did WHAT?! Inconceivable!

    • onetwothreefour on 17/03/2020 - 10:26
      +25

      We rang the ATO and asked what the process is

      Without posting on OzBargain first? Traitor.

    • Baysew on 17/03/2020 - 10:32
      +1

      So how is the amount granted actually determined?

    • scotty on 17/03/2020 - 10:45
      +2

      its based on tax declarations from previous years

      However linked webpage stated that

      Businesses will receive payments of 50 per cent of their Business Activity Statements or Instalment Activity Statement from 28 April

      So depending on the business, they will either do a BAS or an IAS for March that's due on 28 April. Just from the look of it, it appears that if you pay over $50k in BAS for 2020Q1 you can get the maximum $25k back "within 14 days" (which would be somewhere in May).

      I've also heard that it's only looking at the PAYG section of BAS/IAS to determine the refund. There are so many misinformation out there and I can't find an official statement on ATO's site…

      • jungle on 17/03/2020 - 11:01

        Thanks - just want to understand what you mean by "you pay over $50k in BAS" - do you think it's item W1 "Total salary, wages and other payments"?

        • scotty on 17/03/2020 - 11:59

          BAS would have included other things such as GST and tax instalments. But no, I really have no idea what would be counted for the 50% cashback.

          One advice I saw was actually giving yourself (assume a business owner) salary, rather than dividend / director fee, as you would be paying PAYG.

          • SydneySwan on 18/03/2020 - 08:20
            +1

            @scotty: I suspect that those who have been underdeclaring business income could now find that their stimulus payment is less than it would otherwise be.

      • bluesky on 18/03/2020 - 06:57
        +5

        Official ATO statement here.

        The way I understand it is: they determine whether you qualify as a small or medium business (annual turnover <$50m) based on the prior year's turnover.

        If you do, then you will receive 50% of the W2 label - PAYG tax withheld from salaries and wages (up to $25K), declared in the March 2020 and June 2020 BAS statements (for those who lodge quarterly).

        • scotty on 18/03/2020 - 09:05
          +1

          Thanks!

    • Zachary on 18/03/2020 - 07:56

      ….so basically after end of June or thereafter, since that's when you're supposed to report your tax…? Well OP's business is gone…rip…

  • John Kimble on 17/03/2020 - 10:28
    +8

    You'd think a laundry business would clean up! Pun intended.

    • bobbified on 17/03/2020 - 10:29
      +6

      They're obviously not laundering the right things!

      • mick123 on 17/03/2020 - 11:08
        +22

        The laundry doesn't just remove stains, it's also removed the OP's sense of humour..

      • elgrande on 17/03/2020 - 12:15
        +5

        I am guessing you are your friend?

        Hope it all works out

        • jungle on 17/03/2020 - 13:17

          Thanks mate, but my friend is my friend :) I think that he is in a typical situation where many small business owners are struggling with. It's quite sad to see many of them close down.

      • Bargain80 on 17/03/2020 - 12:17
        +6

        what's wrong with making a joke.
        Since when that doing commercial laundry becomes a sensitive issue.

        • spackbace on 17/03/2020 - 12:27
          +8

          Must be using the wrong powder

  • GG57 on 17/03/2020 - 10:47
    +1

    Some would question if the stimulation package actually exists (like the drought relief package, and the bushfire relief package).

    Seriously, it hasn't been legislated yet, and the LNP refused to recall parliament a week early to deal with it.
    It has been announced; that is all.

    • Zachary on 18/03/2020 - 07:53

      (like the drought relief package, and the bushfire relief package).

      Didn't they come?

      • GG57 on 18/03/2020 - 11:46
        +1

        According to multiple news sites, some of the funds in these packages were recycled into the next package.

  • Bid Sniper on 17/03/2020 - 10:49

    Samantha X: ‘Coronavirus is hitting the sex industry hard’
    https://www.bodyandsoul.com.au/sex-relationships/sex/samanth…

    Not the only one…

    • netjock on 17/03/2020 - 11:32
      +3

      Bargains to be had. Just waiting for the deals to be posted.

      • Bid Sniper on 17/03/2020 - 11:57

        Deal + $750 Scomo stimulus package, do it for your country.

        • netjock on 17/03/2020 - 12:41
          +1

          Only if you are on benefits. I am paying out and not getting any so I'm looking around to those with my money to do it once for them, do it twice for their partner and do it thrice for their country.

  • [Deactivated] on 17/03/2020 - 11:00
    +3

    Tell Scomo that you're building female changerooms for a swimming pool and the money will appear out of nowhere.

    • Baysew on 17/03/2020 - 12:58

      ..for a Gun Club in a marginal seat.

    • jimbobaus on 17/03/2020 - 11:25
      +4

      To give some idea of the economic stimulus that would occur with nationalise electricity The Greens claim that bills would drop by 40%. This is far more than a $500 one off payment and does not involve businesses going into debt in order to continue running like the current situation.

      A claim they simply can not back up
      the bonus of being the greens is that they can make wild claims and no one holds them to account because they are not in power, and thankfully never will be

      • spackbace on 17/03/2020 - 11:52
        +6

        When will you learn not to respond to Diji? It's not like they actually participate in any discussion. They're like a human billboard lol

        • jimbobaus on 17/03/2020 - 12:06
          +6

          I had run out of neg's .. so decided to comment instead

    • Baysew on 17/03/2020 - 17:24

      Just how would The Greens nationalise electricity? Just take one company, AGL as an example, it has a current market capitalisation of $10 Billion. Where would The Greens find the money to pay for that?

  • crashloaded on 17/03/2020 - 11:27
    +5

    My guess is by the time you get the money the business will already be screwed.

    • jungle on 17/03/2020 - 12:44

      Thanks so much - this doc explains everything :)

  • cashless on 17/03/2020 - 15:19

    A friend of mine has been running a laundry business for over 20 years

    Hope it's not the same "laundry" service as that run by casinos, pokie clubs etc

  • OzHunterNSW on 18/03/2020 - 09:47
    -1

    Is this allocated via the Red Cross, for if so, you don't have a chance in their hell

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