Here’s an overview of the relief and support that’s available during this outbreak.
The current pandemic is affecting everyone – in every market, every industry and in every country. It doesn’t discriminate across any population, income bracket or race.
Ironically, while many small businesses may not survive this economic crisis, as a self-employed or newly self-employed person, you may be one of the fortunate individuals looking at an increase in business — as some small businesses and businesses-of-one flourish during an economic downturn.
For example, delivery services are seeing a huge boost as customers are turning to home deliveries and ordering everything from restaurant meals to groceries online while they follow stay-at-home orders from their state government. Work-from-home freelancers — especially in communications or e-commerce — may see a burst in work available as businesses across the country need to send out messages regarding the crisis and/or upgrade their online presence.
While no one knows what will happen in the future, it is predicted that most Australian states will follow stay-at-home orders and only allow essential businesses to remain open for the foreseeable future. Additionally, the overall mandate and response across the nation has been to cancel every type of non-essential indoor or outdoor gathering featuring over two people. Where possible, gatherings are being moved online, like school classes, church services, health care and other services.
As a result, small, independent businesses – everything imaginable from coffee shops to hairdressers – are struggling to stay afloat. Where it’s possible, they’re shifting their business models. Restaurants are offering pre-made carry-out packages of traditionally dine-in items along with standard counter takeaway services. Yoga studios are offering classes via Zoom as opposed to in the studio. Even with these shifts, business is down considerably.
The decrease in business also has an immediate impact on self-employed and gig workers whose line of work may have catered to elective home services, such as interior designers and carpet cleaners — as many customers are waiting until the virus has dissipated before having others inside the home unnecessarily.
Help is available.
We get it. The day-to-day demands of finding work can be tough enough without a pandemic and economic downturn. With the current COVID-19 situation, they may simply seem overwhelming.
As the economy surges or wanes, you likely know how to adjust things to compensate under normal circumstances. For many small businesses, simply covering your expenses, seeing a little growth, and doing something you like along with good people defines success. A sudden halt in business and a significant drop in revenue, however, is a different story – especially if you have employees being sent home or let go due to lack of business.
To help offset the economic strain brought on by the pandemic, the Australian government has developed emergency relief packages designed to help businesses, including self-employed individuals and gig workers — and they will likely affect you.
Here are the four efforts that the government is putting into place to provide some immediate and much-needed relief and support.
1. JobKeeper Payment
More than anything right now, the Australian Government wishes for employees to keep their jobs and remain employed. Under normal conditions, if a business owner saw a sudden drop in business and their efforts at adjusting for the loss weren’t enough, they might turn to a traditional bank loan to help make ends meet until business picks back up — or they may have to face letting go of staff members.
However, the COVID-19 pandemic is affecting businesses across Australia at a dramatic rate. Leaving employees without jobs or taking on potentially high-interest rate loans are simply not good options for small businesses right now, with so much uncertainty – especially if they’re not certain if they can pay these loans back promptly.
As a result, the Australian government has rolled out a new small business payment, “JobKeeper.” Eligible employers and small traders can claim a fortnightly payment of $1500 before tax per eligible employee in order to keep paying their employees during this crisis. These payments can be back paid from 30 March 2020 and will run for six months.
Employers are eligible for the JobKeeper subsidy on these conditions:
Businesses with less than $1billion turnover show a reduction by more than 30% over at least a month relative to a comparable period a year ago.
Businesses with more than $1billion turnover show a reduction by more than 50% over at least a month relative to a comparable period a year ago.
Employers seeking this benefit will need to submit an application to the Australian Taxation Office (ATO) and provide information which demonstrates the downturn in their business.
Employees are eligible to receive this payment from their employer if:
The Employee was employed at 1 March 2020, are full time, part time or long-term casuals (who had been employed for minimum 12 months as at 1 March 2020), are 16 years of age, an Australian citizen (or satisfy particular VISA requirements), and are not already receiving a JobSeeker payment from another employer.
2. JobSeeker Payment
The Australian Government has temporarily expanded the eligibility criteria for the JobSeeker Payment Scheme and will now provide access to sole traders, self-employed, casual and contract workers whose incomes have been reduced. As many Australians with small businesses are struggling to make ends meet and therefore letting go of longtime employees, this temporary fortnightly payment may be able to help you or someone you know.
A temporary $550 supplement will be provided fortnightly from 27th April.
A one-off Crisis Payment equivalent to one week of your base income support rate will be provided if you are in severe hardship and either need to self isolate, or support someone to self-isolate.
In order to receive payment, a job seeker must file a claim online through MyGov using a Centrelink account. If you didn’t already have one, you can register your intent to claim and Centrelink will be in touch to get you set up. If your claim is approved, you will receive the supplement for six months.
3. Early Access to Superannuation
Responding to the job market disruption caused by COVID-19, those financially affected may be eligible to receive early access to their superannuation accounts. Beginning mid-April, the Government has allowed individuals to apply through MyGov to access up to $10,000 of their superannuation savings, available until 1 July 2020. The opportunity to access a second $10,000 from superannuation accounts will open from 1 July until 24 September 2020. No tax will be deducted from the amount which the individual chooses to withdraw.
There are certainly pros and cons to accessing your super early, as this money will ultimately come out of your retirement savings. If you’re thinking about taking advantage of this option, weigh it up carefully or arrange an appointment with a professional who holds an AFS license to ensure you are doing the right thing for your future.
To find out more details on your eligibility, visit this link.
4. Small Business Wage Subsidy
As small businesses in trade industries struggle to keep their staff on due to the plummet in jobs, the government has released a subsidy designed to help businesses keep their trainees and apprentices employed.
Registration has opened for the small business wage subsidy implemented to retain apprentice staff and trainees. Eligible employers will receive a 50% wage subsidy for those paid to their apprentices.
This $1.3B package from the Government is to help businesses support and retain their apprentices and trainees.
This subsidy will cover wages paid from 1 Jan 2020 until 30 September 2020 and businesses will be reimbursed quarterly. For more information, visit here.
Finally, here are three ideas to encourage you
Even though you never could have anticipated this pandemic and economic free fall, there are some things that you can do now – especially if you have holes in your normally busy schedule and free time to be creative.
Offer new services
Have you been thinking of expanding your business with a new service or product line? Now might be the time to explore and experiment with those ideas. For example, Lululemon Australia has, like all other retailers, been forced to close all storefronts. To compensate, the brand has shifted their focus to the digital world and are now offering daily yoga and meditation classes. Providing these new services has grown Lululemon’s audience and boosted online shopping. Online interaction is keeping the brands, distributors and employees jobs alive during this downturn.
If you’re like many, your employees, contractors and customers are like family. Seeing them leave or having to let them go due to a sudden drop in business is probably one of the hardest things imaginable. We encourage you to do what you can, where you can for both of your employees and your customers. Use whatever means your business can provide to help people in need. For example, after many of Australia’s elderley and at-risk people were seen left short of essential grocery staples, Coles supermarkets took the initiative to dedicate the first hour after opening to those with a concession or disability card. This encouraged Coles shoppers to remain loyal to the brand by reinforcing value perception. Even small businesses can use their downtime to help others and share acts of kindness both in real life and online.
Use the time to learn and grow
Do you have paperwork that you have been putting off? A file drawer that needs reorganising? Or, are there areas of your physical business that need a good clean? Now is the perfect time to clean up and get buttoned-up. Plus, this will feel like you are doing something positive for your business – because you are.
At Invoice2go, we’re investing in developing tools and resources through articles like this — written by experts and provided to you for free — to help you optimise your downtime and upgrade your business for when the economy gets cranking again. You can even join our new Self-Employed Facebook Group, Family-owned Business Group or Construction Industry Facebook Group to connect with others and enjoy even more tools and resources for free.
No one expected this pandemic to have such a rippling and damaging effect on our economy. And no one knows when it will finally end – but it will. Hopefully, the measures being put into place will help along with additional aid and relief that are just now being discussed. For now, focus on one day at a time, seek out the help that is being made available to you, and find ways to remain positive, knowing that we are all in this together.
Editor’s note: At Invoice2go, we make every effort to bring you the most current information that’s both relevant and helpful to you and your business. As the COVID-19 pandemic is still unfolding, please check back for updated articles. Thank you.