COVID-19 National: Business, Non-Profits – Boosting Cash Flow for Employers

This program aims to provide temporary cash flow boosts to support small and medium businesses and not-for-profit organisations during the economic downturn associated with COVID-19. It forms part of the Australian Government's Coronavirus Economic Stimulus Package which aims to support households and businesses and address the significant economic consequences of the Coronavirus.

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 initial cash flow boosts will be delivered as credits in the activity statement system when eligible entities lodge their activity statements for each monthly or quarterly period from March to June 2020. Those who lodge their June 2020 activity statement will receive both initial and additional cash flow boosts as credits.

The initial cash flow boost amount is based on the amount of the PAYG withholding. Eligible businesses that withhold tax on their employees' salary and wages will receive a credit equal to 100% of the amount withheld, with the following exceptions:
- Monthly lodgers will receive a credit for March 2020 which is 300% of their withholding for that month – this will provide an approximate equivalent to lodgers reporting quarterly.
- Eligible businesses will receive a minimum of $10,000 across March to June 2020, even if their total withholding is less than $10,000.
- Total cash flow boosts for March to June 2020 cannot exceed $50,000.

If businesses receive the minimum credit of $10,000  they will not be eligible to receive any more cash flow boosts until their PAYG withholding exceeds $10,000 over the eligibility periods.

Businesses who received initial cash flow boosts will automatically receive additional cash flow boosts when they lodge their activity statements for each monthly or quarterly period from June to September 2020. These will be delivered in either two or four instalments, depending on the businesses' reporting period.

Businesses who haven't made payments to employees subject to withholding from June onwards must report '0' for PAYG withholding when lodging their activity statement to ensure their business still receives the additional cash flow boost.

The amounts will be equal to the total amount of initial cash flow boosts received and split evenly over the lodgments for the periods June 2020 to September 2020. If the business lodge:
- Quarterly – they will receive 50% of their total initial cash flow boosts for each activity statement.
- Monthly – they will receive 25% of their total initial cash flow boosts for each activity statement.

Both the initial and the additional cash flow boosts will be credited when the business lodge their June 2020 activity statement unless they already received the maximum $50,000 of initial cash flow boosts from earlier periods.

Please refer to the website for the lodgment submission and due dates.

Eligible applicants include Australian businesses (including sole traders, companies, partnerships or trusts) and NFP organisations that must:
- Be a small or medium business entity or NFP of equivalent size (that is, an entity with aggregated annual turnover less than $50 million).
- Held an Australian business number (ABN) on 12 March 2020.
- Either:      
a) Made eligible payments to employees subject to withholding (even if the amount they were required to withhold was zero).
b) Were required to pay an amount in relation to alienated personal services income they received (even if the amount they were required to pay was zero).
- On or before 12 March 2020, lodged at least one of:          
a) A 2019 tax return showing that they had an amount included in their assessable income in relation to them carrying on a business.
b) An activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that they made a taxable, GST-free or input-taxed sale.

Please refer to the website for the complete eligibility requirements.

Eligible payments include:
- Salary and wages
- Director fees
- Eligible retirement or termination payments
- Compensation payments
- Voluntary withholding from payments to contractors