The NSW Government have finally released the eligibility criteria to enable businesses to determine whether they are able to access the JobSaver scheme. As we have previously indicated the criteria is very similar to the Covid-19 Business Support Grant criteria in terms of eligible businesses and turnover thresholds, see our earlier story here.
Businesses that have applied and are eligible for the 2021 Covid-19 Business Support Grant will generally be automatically eligible for JobSaver (although you will need to provide additional information). Eligible businesses can apply from Monday 26 July.
It should also be noted that employees can receive the Commonwealth Covid-19 Disaster Payments if their employer is receiving JobSaver.
To be eligible for JobSaver, businesses must apply through their own MyServiceNSW Account and:
- have an active ABN and demonstrate that the business was operating in NSW as at 1 June 2021;
- have “national aggregated annual turnover” (refer below) between $75,000 and $250 million (originally a ceiling of $50 million was announced) (inclusive) for the year ended 30 June 2020;
- have experienced a decline in turnover of 30% or more due to the Public Health Order over a minimum 2-week period within the Greater Sydney lockdown (commenced 26 June) compared to the same period in 2019;
- maintain their employee headcount (refer below) on 13 July 2021 while they continue to receive JobSaver payments;
- for non-employing businesses, such as sole traders, show that the business is the primary income source for the associated person. If you have more than one non-employing business, you can only claim payments for one business.
- Entities earning passive income (rents, interest or dividends), Government agencies, local Governments, banks, and universities are not eligible for JobSaver. Please refer to this link for a complete list of ineligible businesses.
- Non-employing businesses (eg sole traders) are not eligible for the JobSaver payment if anyone associated with the business or anyone who derives income from it, has received a Commonwealth Covid-19 Disaster Payment since 18 July 2021.
- Payments will be equivalent to 40% of the weekly payroll (refer below) for work performed in NSW being capped at $100,000 per week (up from $10,000 originally announced) with a $1,500 minimum.
- Payments will be made fortnightly and backdated to cover costs incurred from 18 July 2021 onwards (week 4 of the Greater Sydney lockdown) picking up from when the grants run off.
Evidence to support eligibility
The requirements are split into two categories – highly impacted (which is now quite an extensive list) and everyone else.
Highly impacted businesses must:
- declare that they meet the eligibility criteria;
- declare and maintain employee headcount at 13 July 2021 (this may have already been done as part of the Covid-19 grants application);
- submit an Australian income tax return, Notice of Assessment or other documentation demonstrating the business had a national aggregated annual turnover between $75,000 and $250 million (inclusive) for the year ended 30 June 2020;
- provide details of your qualified accountant, registered tax agent or registered BAS agent;
- provide evidence of weekly payroll; and
- lodge other supporting documents as required to demonstrate you meet the eligibility criteria.
Other businesses must provide all of the above items plus a letter from a qualified accountant, registered tax agent or registered BAS agent to demonstrate the decline in turnover.
National Aggregated Annual Turnover
Aggregated annual turnover is a widely understood concept in relation to income tax which includes the turnover of the entity itself plus connected and affiliate entities. As such, this can include connected or affiliate entities that are not in Australia.
The scheme guidelines use the term “national aggregated annual turnover” in the eligibility section and this is repeated in terms of the evidence that needs to be provided by highly impacted industries. The evidence required for other businesses, however, requires evidence of “aggregated annual turnover”. It is not apparent whether this is an accidental error or a deliberate delineation.
Importantly, the term “national aggregated annual turnover” is not defined within the income tax law and therefore its exact meaning is uncertain. Taking the term literally, it would appear to mean that the aggregation of turnover is limited to Australian entities, however, this is not positively noted within the guidelines and as such uncertainty exists.
Decline in Turnover
A decline in turnover is to be determined by using the Goods and Services Tax (GST) turnover definition. The use of this terminology would appear to be seeking to eliminate the cash versus accruals issue that initially arose with JobKeeper.
- Employees who have been stood down are still included in the headcount as long as their employment has not been terminated.
- Casual employees are included in the headcount if they have been employed for more than 12 months.
- Reductions in employee headcount resulting from circumstances outside the control of the employer (such as voluntary resignations, death of an employee) will not be taken as a reduction in employee headcount.
Weekly payroll is determined by reference to the most recent BAS provided to the Australian Taxation Office before 26 June 2021 for the 2020-21 financial year (ie most likely 31 March 2021 quarter).
The W1 Box on the BAS is used to calculate the weekly payroll as follows:
- NSW only businesses – identify the W1 amount and deduct any amounts voluntarily withheld on behalf of contractors. That amount should be divided by the number of days in the BAS period and multiplied by 7 to give your weekly payroll.
- Other businesses – calculate the W1 amount in respect of relevant salaries, wages etc. paid to employees who usually worked or were based in New South Wales during the relevant BAS period. Deduct amounts voluntarily withheld on behalf of NSW contractors. That amount should be divided by the number of days in the BAS period and multiplied by 7 to give your weekly payroll.
Much like the Covid grants, the alternative criteria guidance is very limited. The alternate circumstances include:
- businesses not operating for the full year to 30 June 2020 (e.g. new businesses);
- businesses affected by drought, bushfires or other natural disasters;
- business acquisition, disposal, or business restructure that has impacted the business’ turnover;
- a sole trader or small partnership impacted by sickness, injury or leave.
While some of these are similar to the JobKeeper provisions, there is much less flexibility and clarity around the alternate testing criteria. Businesses in the above circumstances are required to contact ServiceNSW to determine how to assess their eligibility – ESV can assist with these inquiries.
It is noted that the turnover threshold of $250m is determined by reference to 30 June 2020, which means that businesses that were under $250m for the most recent year (30 June 2021) but were over for the test year, would appear to be ineligible.
ESV is here to help
It is anticipated that there will be clarifications and changes to follow as the position in NSW becomes clearer. We will seek to keep you up to date with the changes as they happen.
As always, please contact your ESV Engagement Partner if you have any questions – we remain committed to helping our clients navigate these challenging times.