What does the government’s cash boost mean?

The Intent of the Cash Boost

The overall intent of the cash boost is to Support Employment and assist in the payment of wages.

Note that this new legislation was quickly developed and details are still being clarified by the ATO.

The ATO is still making changes to the information on it’s webpage regarding this and are still developing and adding FAQs to explain particular scenarios.

What is the benefit for our organisation?

As you can imagine we have been receiving a lot of inquiries from clients and others about “how can we take advantage of the government’s announcements about help with cash flow?”

Amongst all the updates and information briefings here is our latest guide for you and your organisation about the Cash Boost for Organisations. We have tried to distill all the other notes into a simple ‘easy to follow form’.

Please this review for your church or NFP. Use it to help with your cash flow planning.

During these times of the coronavirus we are blessed to have a government that is willing and able to support employers and therefore people with cash. Let’s all pray for peace and stability in Australia during this time, and a community that can share resources.

If you would like to discuss the Cash Boost, or you would like some help, please email us asap: [email protected]

The federal government is providing cash financial support for churches and NFPs (also for business)

Officially called “Boosting Cash Flow for Employers”

It is being managed through the ATO

Eligibility:

  • Church or NFP must employ staff (no min or max)
  • For Church/NFP up to $50M revenue

Overall benefits:

Over the full Cash Boost program, up to max $100,000, min $20,000

Employers receive payment of 100% of their PAYG

Paid by ATO into the organisation’s Activity Statement Account

First phase with BAS April 28th:

  • Min $10,000 (even if no PAYG on BAS)
  • Max $50,000

Second phase July-October

  • Min $20,000
  • Max $100,000 for both payments

How is the amount calculated:

  • Based on the PAYGW deducted from employees’ wages
  • Eligible employers that withhold PAYG to the ATO receive 100% of the PAYGW (max $50,000)
  • Eligible employers receive a min of $10,000 even if no PAYG withheld

Timing of cash payment from the government

  • Credit by ATO in instalments to church’s Activity Statement Account on BAS submission/due dates
  • If the ATO ‘payment’ into the Activity Statement Account places the entity in a refund position, ATO will deliver the refund within 14 days.

Quarterly lodgers

  • First is a credit upon lodgement of the March BAS (by April 28th) – 100% of PAYGW or min $10,000 where no PAYG on the BAS
  • Second phase set of payments are available, up to a maximum of $50,000:
    • Where the minimum Cash Boost $10,000 was received then 2 more Boosts will be received of $5,000 each for June and September quarters
    • Where the max initial Cash Boost was received, then payment will be made following submission of your June and September quarter BAS, with each payment equal to half of the initial payment received for the March quarter.

Monthly lodgers

  • receive a credit that is calculated at three times the PAYG (300%) in the March 2020 activity statement, to align with quarterly lodgers, max $50,000
  • On lodgement of June to Sept Activity Statements receive $12,500 per mth (this is further $50,000 for the max total of $100,000)

How the Cash Boosting will operate (new detail by Benkorp 30.3.2020)

The Initial Cash Boost

The aim is to be reimbursed 100% of the PAYG lodged in BASs for the period April-Jun – subject to a maximum of $50,000

The Additional Cash Boost

During the period July-October

The organisation must still be active and operating

Maximum of $50,000

This Boost is based on the April – June PAYG

Total maximum total Cash Boost limit = $100,000

Credit Application Dates

BASs for:

Quarterly BAS Lodgers

  • 28th April
  • 28th July
  • 28th October

Monthly BAS Lodgers

  • 21st April
  • 21st May
  • 21st June
  • 21st July
  • 21st Aug
  • 21st September
  • 21st October

Credits for Quarterly BAS Lodgers

  • 21st April = April – June PAYG – min $10,000, Max $50,000
  • 28th July = April – June PAYG – min $5,000, Max $25,000
  • 28th October = April – June PAYG – min $5,000, Max $25,000

Credit for Monthly BAS Lodgers

  • 21st April = June PAYG x 3 – min $10,000, Max $50,000
  • 21st May
  • 21st June
  • 21st July
  • 21st Aug
  • 21st September
  • 21st October

Initial Cash Boost:

Calculation of Initial Cash Boost:

Example – Monthly Lodger where the PAYG is constant $3009 per month, steps:

  • This means March is less than $10000, then receive $10000
  • Lodge April Activity Statement
  • then the calculation is $10000 + Jan-Apr $3009 x4=$12036
  • So, ATO reimburses in April $12036-$10000 = $2036
  • 21st May $3009
  • 21st June  $3009
  • 21st July $3009
  • Total for Jan-Jun = $18054

Example – Quarterly Lodger where the PAYG is $9027 per quarter, steps:

  1. This means March is less than $10000, then receive $10000
  2. Lodge the June BAS
  3. Then the calculation for June is $9027 x2 = $18027
  4. So, ATO reimburses in July $18,054-$10000 = $8,054 + the June BAS of $9,027 = Total July credit $17,081

Additional Cash Boost

Calculation of Additional Cash Boost:

For Monthly lodger:

  1. Boost amount is 25% of Initial Cash Boost credited per month
  2. July – October $4513.50 per month, ie 25% of initial total Boost per month (ie 25% of $18054)

Total all Cash Boosts for Monthly Lodger $36,108

For Quarterly lodger:

  1. This includes the Additional Boost amount for the June BAS of $9,027
  2. Lodge the September BAS in October
  3. ATO reimburses the September BAS $9027

Total all Cash Boosts for Quarterly Lodger $36,108

How to access the Cash Boost for your organisation

  • you must lodge your activity statements
  • you do not need to apply for the cash flow boosts.
  • the cash flow boosts will be automatically applied to your account when you lodge your activity statement for the relevant periods

Outcomes and Cashflow

  • these Cash Boost credits will be offset on the Activity Statement Account
  • where the Activity Statement Account balance is in credit then the ATO will refund to the organisation within 14days

Bonus for Benkorp clients

If you would like to check your own calculations, you are welcome to use this Boost Calculator developed by one of our Xero associates Digit Business: https://tinyurl.com/sfctoyh

If you would like to discuss the Cash Boost, or you would like some help, please email us asap: [email protected]

FYI. This is our latest reference from the ATO, as at 30.3.2020:

https://www.ato.gov.au/Business/Business-activity-statements-(BAS)/In-detail/Boosting-cash-flow-for-employers/#Accessingthecredit