Following a compromise with the Senate, the Treasury Laws Amendment (COVID-19 Economic Response No. 2) Bill 2021 was finally passed by both houses without amendment on Monday after the Senate agreed not to insist on a transparency measure that would have required businesses to disclose the amount of Job Keeper wage subsidies they received.
COVID-19 Disaster Payments made since the program’s inception on June 3 will now be treated as non-assessable, non-exempt income, allowing recipients to take home more money than they would have under the $90 billion Job Keeper wage subsidy programme, which was subject to taxation at the time of payment.
Workers who miss more than 20 hours of work per week will get $750 per week, while those who miss between eight and twenty hours would receive $450 per week, according to the Department of Labor.
The COVID-19 Disaster Payment claimants may now expect to be $90 a week better off than they would have been having they received the Job Keeper wage subsidy, based on an annualised $39,000 income of $750 per week.
It will also guarantee that COVID-19 business support payments are regarded as non-assessable, non-exempt income under the terms of the newly approved legislation.
Applicants for the tax break must also have an accumulated turnover of less than $50 million, which puts them at odds with the state’s JobSaver programme, which has recently been extended to include companies with yearly turnovers of up to $25 million.
Information and data from the ATO will now be shared with the states and territories that run COVID-19 business assistance programmes, as well as with the general public.
In addition, Treasurer Josh Frydenberg will be given authority to authorise further COVID-19 payments to companies that have been impacted by state or territory lockdowns between the first of July 2021 and the last day of December 2022.
In the face of continuing state-wide lockdowns to prevent the spread of COVID-19, Michael Croker, tax leader at the Chartered Accountants Australia and New Zealand, thinks the Treasurer has an ace up his sleeve.
Hopefully, the ATO will act swiftly to engage with professional associations on the implications of considering COVID-19 Disaster Payments and qualifying state business assistance packages as non-assessable non-exempt income.