The evolving nature of the NSW JobSaver program continues with further guidance and clarification being received in respect of the retesting requirements for continued eligibility for NSW JobSaver payments as well as further clarifications on pre-existing issues.

Retesting

As you may recall the requirement to retest for continued eligibility was introduced without consultation and created significant uncertainty and workloads for businesses.  Businesses are required to reconfirm that they continued to suffer a 30% or more decline in turnover to continue to receive the payments compared to:

• the same period in 2019, or
• the same period in 2020, or
• the 2-week period immediately before lockdown.

Businesses are required to use the same period in retesting as they did in the original application.  In practical terms this means that the following options are available:

• Rolling Comparison Period – If your initial comparison period was in 2019 or 2020, you can use the same year but the corresponding fortnight as the current fortnight. For example:

You are not able to use 13 September to 26 September 2020 as your comparison period if you used 2019 in the initial test and vice versa.  The comparison period moves in line with the fortnight tested.

• Static Comparison Period (Historic) — If your initial comparison period was in 2019 or 2020, you can use the same comparison period that was used in the initial application. For example:

The comparison period will remain fixed for all future periods.

• Static Comparison Period (Current) — If you used 12 June to 25 June 2021 as your initial comparison period, you must use that same period. For example:

The comparison period will remain fixed for all future periods.

• If a business is closed (ie not trading) for a fortnight it can confirm its eligibility without having to undertake any testing.

Other practical issues

• Unlike the JobKeeper rules the decline in turnover requires an actual fall (ie it must have happened rather than be a forecast).
• The ongoing decline in turnover still needs to be due to the lockdown – a fall in turnover for other reasons is not sufficient (ie cyclical variations do not result in eligibility).
• Current guidance indicates that where a longer period than 2 weeks was used as the comparison period in the initial application, then to convert the period to a fortnight. This is achieved by dividing the initial period by the number of days and multiplying by 14.
• Contrary to initial guidance, it is now understood that if businesses do not reconfirm by the due date then they will not miss out on the payment. The reconfirmation option will remain open for the duration of the program with payments being received within 5 business days of a business reconfirming eligibility. As such, businesses can complete the reconfirmations on a monthly basis (eg if they have a monthly billing cycle), however, this will delay payments.  Fortnightly turnover is then calculated by dividing the month’s turnover by 31 (irrespective of whether there are 30 days in a month) and then multiply by 14.
• If eligibility occurs prior to 12 September then the payments are retrospective to 18 July, however, if eligibility occurs 13 September onwards then the payments will be prospective only.
• September payments are understood to be continuing even if a business doesn’t reconfirm eligibility, however, any payments after that will be processed once eligibility is confirmed. Ultimately businesses still need to confirm eligibility for the September period.
• Businesses can move into and out of the JobSaver program from one fortnight to the next (eg where the turnover for that fortnight is not down by the required 30%). Accordingly, a business can exit and re-enter JobSaver multiple times and does not need to reapply.  Businesses will continue to receive reminder emails whether they are in or have fallen out of the JobSaver program.
• Businesses that have been paid the incorrect amounts (eg have been capped at $10,000 when they should have received additional payments) are receiving conflicting guidance on when this will be resolved with it being potentially only after 18 October 2021 (the scheduled end date for the program). Current guidance is to reach out to ServiceNSW to resolve this.
• Entities with Substituted Accounting Periods can use the last lodged tax return as the basis for aggregated turnover. As such, a December year end can be used rather than having to aggregate over the financial year (ie 30 June).
• The payments are non-assessable non-exempt income (ie tax exempt) if the aggregated turnover of the entity is less than $50m. Expenses incurred to gain non-assessable income are not deductible.   Amounts received that are tax exempt will be taxable if paid out as a dividend as there will be no franking credits arising (unless surplus credits are available).

Maintaining employee headcount

• Where employees are dismissed or made redundant this means that a business does not maintain headcount.
• Where an employee resigns, retires, is stood down or terminated for misconduct then this reduction in headcount is ignored for testing purposes.
• Where an employee concludes mutually agreed employment period and this is not extended, this reduction in headcount is ignored for testing purposes.

If any additional guidance becomes available, we will update you as soon as possible.

Should you have any queries about the evolving JobSaver program please don’t hesitate to reach out to your ESV Engagement Partner.