The Federal Government’s $130 billion JobKeeper payment announced yesterday, when coupled with earlier measures in response to the economic fallout from COVID-19 (coronavirus), will provide vital support to small business owners, many of whom have self-managed super funds (SMSFs).
The SMSF Association CEO John Maroney says: “The $130 billion package, the third assistance tranche announced by the Federal Government, is critical to keep businesses afloat during a public health crisis that is having massive economic repercussions.
“It not only throws a much-needed lifeline to the many small to medium-sized enterprises (SMEs) that have seen their revenue dry up in recent weeks, but it will help retain links between employers and employees during these dire times that will be essential to ensure business recovers as quickly as possible once COVID-19 is under control.”
The wages payment will be paid to employers, for up to six months, for each eligible employee that was on their books on 1 March 2020 and is retained or continues to work for that employer.
In addition, Maroney says a measure announced by the Australian Tax Office ruling out the ATO taking compliance action against an SMSF giving a tenant – who may also be a related party – a temporary rent reduction in these troubled times is another welcomed initiative.
“The Association approached the ATO about its view on rental concessions for the 2019–20 and 2020–21 financial years immediately after the enormity of these public health and economic crises became apparent, so it’s pleasing to note the regulator will offer this significant temporary relief measure that we believe will help many SMSF members who are small business owners.
“In these unprecedented times, we believed there was a strong argument for rental concessions to be part of the package of revised commercial arrangements, and that these should be extended to SMSFs and their small businesses.
“It was getting to a point where many small business tenants could no longer afford to pay their rent and the uncertainty regarding the application of the laws was creating further stress.
“The ATO’s decision provides much welcomed financial relief and certainty for the SMSF sector that is also dealing with the impact of market volatility on investment portfolios.”
Maroney says the Association will continue to work with the ATO on the practical application of this measure and other necessary temporary relief measures required for SMSF members.