Keat Chew, Netwealth Head of Technical Services, examines the Federal Government's stimulus package to simplify what matters most for you and your clients.

1. Adviser summary:
2020 coronavirus
stimulus package
Presented by
Keat Chew
Head of Technical Services
Netwealth
2 April 2020

2. | netwealth2
Disclaimer
This information has been prepared and issued by Netwealth Investments Limited (netwealth),ABN 85 090 569 109,AFSL 230975,
RSE L0000192). It contains factual information and general financial product advice only and has been prepared without taking into
account your individual objectives, financial situation or needs.The information provided is not intended to be a substitute for
professional financial product advice and you should determine its appropriateness having regard to your particular circumstances
and seek any independent financial or other professional advice you may require.The relevant disclosure document should be
obtained from netwealth and considered before deciding whether to acquire, dispose of, or to continue to hold, an investment in any
netwealth product.
While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person,
including Netwealth, or any other member of the netwealth group of companies, accepts responsibility for any loss suffered by any
person arising from reliance on this information. Unless specified, all information in this document as at 1/4/2020.

3. | netwealth3
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Keat Chew & Nigel Smith
Technical Services Team
Netwealth
7
Meet today’s speakers

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Session overview
1. Keeping jobs out of ICU
2. Supporting individuals and households
3. Keeping businesses alive
4. Encouraging the flow of credit
5. Flattening the curve
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Keeping jobs
out of ICU

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Applies to businesses significantly impacted by
Coronavirus outbreak
• Wage subsidy from government to keep jobs
– Employer initiated scheme, cannot be applied by
employees
– Support connections with their employees
– Hope can restart operations quicker when crisis over
• Temporary scheme for max 6 months starting 30 Mar 20
• Scheme will pay $1,500 per fortnight per employee
• Payment also available to self-employed
Only eligible employers can access the scheme
• Includes non-for-profits employers
• If eligible, must elect to participate
Eligibility criteria for employers
• For businesses with turnover less than $1 billion
– Show turnover dropped by more than 30%
• For businesses with turnover of $1 billion or more
– Show turnover dropped by more than 50%
• For self-employed individuals, must show 30% drop in
turnover
• Turnover decline measured on comparable period a year
ago (at least a month)
• Business must not be subject to the Major Bank Levy
Need to apply to ATO with supporting details of
downturn
First payments to be received by employers in the first
week of May, then monthly in arrears by the ATO
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Jobkeeper payment scheme

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What employers must do
• Register intention to apply on the ATO website
– Assess if they have or will experience required decline
– Registration available from 30 Mar 20
• Provide details to ATO on eligible employees
– Eligible employees engaged as at 1 Mar 20 and
currently employed (incl those stood down or rehired)
• Ensure each eligible employee receives at least $1,500
per fortnight (before tax)
• Notify all eligible employees that they are receiving the
Jobkeeper payment
• Continue to provide details to ATO on monthly basis
– Incl number of eligible employees employed
Who are eligible employees (of eligible employers)
• Currently employed (incl those stood down or re-hired)
• Were employed by the eligible employer at 1 Mar 20
• Full-time, part-time, long-term casuals (employed on
regular basis for more than 12 months as at 1 Mar 20)
• At least 16 years old
• Australian citizens, PR or holding a specific visa
• No Jobkeeper payment from another employer
Businesses without employees – self employed
• Similarly, register interest from 30 Mar 20
• Provide ABN for business, nominate individual to receive
payment and provide individual TFN
• Monthly update to ATO for continued eligibility
• Payment directly to individual bank account
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Jobkeeper payment – employers obligations

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Employees receive notification from their employer
• Confirming they are receiving Jobkeeper payment
• Most employees will not need to do anything further
Situations where employees have additional obligations
• If have multiple employees, notify employer that is to be
the primary employer
• If not Aust citizens, notify employer of visa status
• If receiving income support payment, notify Centrelink
– This payment is reported as income for Centrelink
purposes
Jobkeeper payment is also considered as normal
taxable income
How are payments made – normal payroll by employer
• If receive $1,500 or more in income per fortnight pre tax
– Continue to receive regular income according to
prevailing workplace agreements
– Jobkeeper payment subsidises part of that income
• If receive less than $1,500 per fortnight pre tax
– Employer must pay the $1,500 min per fortnight pre tax
• If stood down, employer must pay the $1,500 per fortnight
pre tax
• If employed on 1/3/2020, subsequently ceased
employment and rehired, must pay $1,500 per fortnight
pre tax
• Up to employer if they want to pay super on any
additional wage paid because of the Jobkeeper payment
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Jobkeeper payment – employees obligations

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Strategic consideration and impact
• Great initiative to possibly keeping the Australian
unemployment rate down to a single digit
• Employees get to keep job and earn an income
• Employees earning less than $1,500 per fortnight
effectively received a pay rise
• For employees, Jobkeeper payment is higher than
Jobseeker payment
• Good incentives for employers to keep employees on the
payroll
– Ready workforce when crisis over
– Meantime, employees available to assist on any other
channels of income that the business may be
considering
– Employers may benefit from increased PAYG on
Jobkeeper payments – cash boosts for employers
• Some employers may still decide not to apply which will
mean their employees losing out
– Those with multiple employers may be able to access
the payment from one who is willing to participate
• For employers wanting to do this, there is cashflow
consideration as the first payment is not until May
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Jobkeeper scheme

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Supporting individuals
and households

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Covid-19 supplement paid at $550 per fortnight
• To be paid from 27 Apr 20 for 6 months
Some of the main payment categories entitled for the
supplement
• Jobseeker Payment
• Youth Allowance Jobseeker
• Parenting Payment
Expanded access to the income support payments above
• Australian residents financially impacted by the Covid-19
and satisfy the requirements may apply
– Covering employees stood down, self employed, etc
• Asset test waived for the period, income test still applies
• 1 week Ordinary Waiting Period waived
• Liquid Asset Test Waiting Period waived
• Newly Arrived Residents Waiting Period waived for the
period (reinstate after the supplement cease)
• Income Maintenance Periods and Compensation
Preclusions periods continue to apply
• Partner Income test for Jobseeker Payment relaxed
– Income threshold increased to $79,762 pa ($3,068 per
f/n)
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Increased income support

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Faster claim process
• Accelerated claim process – on-line claim encouraged,
allow to call to verify identity rather than queue
• Streamlined application process – e.g. remove need for
employment separation certificate, etc
Strategic consideration and impact
• Should register as soon as possible to ensure
entitlement secured earlier rather than later
• Waiving of the waiting periods will accelerate the
payments to individuals
• Waiving of asset test is going to significantly assist
many claims
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Continued
Increased income support

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Two separate $750 payments to social security, veteran
and other income support recipients and eligible card
holders
• First payment to persons who are eligible payment
recipients or card holders at any time 12 Mar to 13 Apr
20
• Second payment to eligible person on 10 July 20
– Those receiving Covid-19 supplement not eligible
• Payment tax free and not income for Centrelink
Who is eligible for the payments
• Long list of income support recipients and eligible
concession card holders
– Such as Age Pensioner, Jobseeker, DSP,
Commonwealth Seniors Health Card holders etc.
If someone lodges claim for an eligible payment or
concession cards at any time 12 Mar to 13 Apr 20
• If subsequently granted, will also receive the payment
Timing of payments
• First payment: automatically from 31 Mar 20
• Second payment: automatically from 13 July 20
Strategic consideration and impact
• The fall in asset values during the last 3 weeks may now
entitled some clients to apply for Centrelink payments or
concession cards meeting the requirements
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Payment to support households

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Eligibility
• Unemployed
• Eligible for job seeker payment, youth allowance for job
seeker, parenting payment, special benefit, farm
household allowance
• On or after 1 Jan 20
– Made redundant
– Working hours reduced by 20% or more
– If sole trader – business suspended or 20% turnover
reduction
How much can be withdrawn
• Up to $10,000 before 1 Jul 20 (only 1 application allowed)
• Extra amount up to $10,000 from 1 Jul 20 (up to 24 Sep
20)
Application online through myGov (not through fund)
• Certify to meet eligibility criteria
• ATO process application and issue determination
• Fund receive copy of determination for payment
– Payment directly to individual
Withdrawn amount tax free and no impact on Centrelink
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Temporary early release of superannuation

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Strategic consideration and impact
• Only 1 withdrawal allowed per period, so need to do
max $10k in the application if full amount needed
• Early withdrawal may have long term impact on future
retirement benefits
• Tax free payments for those under age 60
– Does not impact on the low rate cap ($215,000 for
2019/20)
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Continued
Temporary early release of superannuation

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Pension minimum withdrawal rate reduced by 50%
• Applies for 2019/20 and 2020/21
Reduction of Centrelink deeming rates
• Change from 1 May 20
– Upper deeming rate at 2.25%
– Lower deeming rate at 0.25%
• Currently, 2.5% and 0.5% respectively
Strategic consideration and impact
• If max pension payment already achieved, consider
stopping further payment – excess cannot be put back to
account
• Some clients may now be able to access higher
Centrelink pension due to less deemed income
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Pension minimum and deeming rates reduction
Age
Default minimum
drawdown rates
Reduced rates by 50%
for 2019-20 and 2020-21
income years
Under 65 4% 2%
65-74 5% 2.5%
75-79 6% 3%
80-84 7% 3.5%
85-89 9% 4.5%
90-94 11% 5.5%
95+ 14% 7%

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Keeping
businesses alive

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Provision of up to $100,000 to eligible small/medium-
sized businesses with a minimum payment of $20,000
• Applies to all businesses with aggregate annual turnover
under $50m that employ workers
– Held ABN on 12 Mar 20 and continue to be active
– Made eligible payments requiring PAYG withholding
• Benefit calculated on PAYG on payments such as salary
and wages, directors fees, termination payments etc
• Employers to receive 100% of PAYG withheld
– Max PAYG of $50,000 and min of $10,000
• Must derived income in 2018/19 or GST sales since 1 Jul
18 and lodge return or activity statement by 20 Mar 20
• 2 cash payments provided and will be received tax free
How does it work
• Auto credit by ATO in activity statement system from
28 Apr 20
• 1st payment - Employer to receive equivalent to 100% of
the PAYG withheld, up to max of $50k
• Employer will receive min of $10k if not required to
withhold tax
• Payment based on Mar and June quarters
– Quarterly lodgers receive payments based on the 2
quarters lodgements
– Monthly lodgers receive payment for Mar (3x), Apr,
May and June lodgements
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Boosting cash flow for employers

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2nd additional payment (July – October 2020)
• Must continue to be active business for payment
– Total of the payments received previously (max $50k)
Total min of $20k and max $100k with both payments
Strategic considerations and impacts
• Additional cashflows to employers tax free
• Independent contractors
– Voluntary agreement to withhold PAYG will also count
• Individual owner employed by the company
– Eligible companies paying a salary (subject to PAYG)
to employee owner
• Be aware ATO will be watching out for schemes
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Continued
Boosting cash flow for employers

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Wage subsidy of 50% of apprentice/trainees wages
during 9 months from 1 Mar 20 to 30 Sep 20
• Applies to small businesses employing fewer than 20 full
time workers who retain an apprentice/trainee
• Apprentice/trainee must be employed as at 1 Mar 20
• Reimbursed up to maximum of $21,000 per eligible
apprentice/trainee ($7,000 per quarter)
• Where a business is not able to retain an apprentice or
trainee, the subsidy will be available to new employer
– Employers of any size that re-engage the apprentice
or trainee will be eligible for the subsidy
• Employers can register for the subsidy from early Apr
2020
• Final claims for payments must be lodged by 31 Dec 20
Strategic considerations and impacts
• Additional cashflows to small business employers
• Help to retain our young apprentices and trainees in
employment
• Potentially adds to PAYG withholding
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Supporting apprentices and trainees

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Immediate depreciation of assets costing less than
$150,000 (up from $30,000)
• Applies to all businesses with aggregate annual turnover
less than $500m (up from $50m)
• Assets acquired (new or second-hand assets) and
installed ready for use from announcement date to 30
June 2020
• Applies on a per asset basis, can write off multiple assets
• Instant asset write off due to revert to $1,000 for small
businesses (turnover less than $10m) from 1 July 2020
Strategic considerations and impacts
• Immediate write off (depreciation) provides additional
cashflow (upfront) for the business
– Additional cash could be used for working capital eg
paying employees during this difficult time
• Any major asset purchase should be purchased in this
period to maximise claim in shortest time period (by 30
June)
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Increasing the instant asset write off

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An additional upfront accelerated depreciation
deduction
• Separate to the immediate write off of acquired assets of
up to $150,000 (so applies to assets > $150,000)
– 50% upfront depreciation, with existing depreciation
rule on balance of asset cost
• Applies to all businesses with aggregate annual turnover
less than $500m
• Assets acquired and installed ready for use from
announcement date to 30 June 2021 (15 months)
– New assets that can be depreciated under Div 40
– Does not include buildings and capital works under
Div 43
• E.g. purchase truck for $260,000, 15% normal
depreciation
– 50% upfront depreciation ($130,000)
– 15% normal depreciation (15% x $130,000 = $19,500)
– Total $149,500 upfront deduction, resulting in $30,387
additional cashflow at company rate of 27.5%
Strategic considerations and impacts
• Additional depreciation provides additional cashflow
(upfront) for the business
– Extends into the next financial year
• Any major asset purchase should be purchased in this
period to maximise claim in shortest time period (by 30
June 2021)
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Backing business investment

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Higher thresholds and more time to respond to
creditors
• Creditor issuing statutory demand on a company
– Common way for company to enter liquidation
– Increase the min threshold from $2,000 to $20,000
• Not responding to demand within timeframe can put
company into liquidation
– Increase time to respond from 21 days to 6 months
• Both measures to apply for 6 months only
For individuals, changes to be made to personal
insolvency system
• Regulated by the Bankruptcy Act 1966
• Increase threshold for min debt to initiate bankruptcy
– Currently, $5,000 will go up to $20,000
• Increase time for response to bankruptcy notice from 21
days to 6 months
• When debtor declares intention to enter voluntary
bankruptcy, there is a period of protection
– During which creditors cannot take action to recover
– This period extended from 21 days to 6 months
– Allows debtors more time to consider best option
• All these measures to apply for 6 months only
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Temporary relief for financially distressed businesses

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Temporary relief from directors personal liability for
trading while insolvent
• Directors are personally liable if a company trades while
insolvent
– May lead to quick decisions to enter insolvency
process for fear might be trading while insolvent
• Directors will be relieved of their duty to trade insolvent
– This relief will apply for 6 months
• Applies on debts incurred in normal course of business
– Intentional cases of dishonesty/fraud still subject to
criminal penalties
Providing additional power to Treasurer under the
Corporations Act
• Power to amend temporarily provisions of the Act
– Provide relief from specific obligations
– Modify obligations to enable compliance with legal
requirements
• Power to amend will only apply for 6 months
• Any measures introduced only apply from 6 months from
date made
Strategic considerations and impacts
• These measures should provide a bit more breathing
space for businesses to recover
• Allows more rational and well considered solutions to be
made and time to be actioned
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Temporary relief for financially distressed businesses

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Encouraging
the flow of credit

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Provide guarantee of 50% to SME lenders for
unsecured loans to be used for working capital
• Enhance lenders willingness and ability to provide credit
• SME with T/O up to $50m eligible
Terms of the scheme
• Maximum total size of loans of $250,000 per borrower
• Loans will be up to 3 years
– Initial 6 month repayment holiday
• Loans will be in form of unsecured finance
– No need to provide asset as security
Loans subject to lenders credit assessment processes
Will encourage lenders to provide facilities that only
have to be withdrawn if needed
Scheme will commence Apr 20 and available till 30 Sep
20
Strategic considerations and impacts
• Should assist SMEs access quick capital injection to help
them through the Coronavirus period
– Important that the next 6 months cashflow planning
take into account all the incentives discussed
alongside this loan facility
30
Coronavirus SME guarantee scheme

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Flattening
the curve

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Individuals and households
• Job retention and preservation
– Taking leave
– Retrenchments
• Cashflow preservation and stabilisation
– Budgeting
– Financial entitlements
• Mental health
Small businesses
• Business preservation and stabilisation
– Cashflows and budgeting
– Financial entitlements
• Understanding framework for financially distressed business
32
CV-19 survival framework

33. Questions and answers

34. Contact
Thank you
Keat Chew
Head of Technical Services
1800 555 223
keat@netwealth.com.au
Nigel Smith
Technical Services Consultant
1800 555 223
nigel@netwealth.com.au

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1 CPD point available
• Must have attended for >30 mins
• CPD details will be included in the
webinar resources email
Webinar recording and slides
• These will be included in the
webinar resources email
Thank you

36. | netwealth
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Disclaimer
This information has been prepared and issued by Netwealth Investments Limited (netwealth),ABN 85 090 569 109,AFSL 230975,
RSE L0000192). It contains factual information and general financial product advice only and has been prepared without taking into
account your individual objectives, financial situation or needs.The information provided is not intended to be a substitute for
professional financial product advice and you should determine its appropriateness having regard to your particular circumstances
and seek any independent financial or other professional advice you may require.The relevant disclosure document should be
obtained from netwealth and considered before deciding whether to acquire, dispose of, or to continue to hold, an investment in any
netwealth product.
While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person,
including Netwealth, or any other member of the netwealth group of companies, accepts responsibility for any loss suffered by any
person arising from reliance on this information. Unless specified, all information in this document as at 1/4/2020.