23 July 2021
by David Prichard and Karen Le
- Related topics
- Corporate Tax & Regulatory
Since Gladys and Scomo held their press conference on 13 July 2021 outlining support for individuals and businesses in NSW affected by the lockdown, further announcements have been made and more detail released. Likewise, Victoria and South Australia have also announced support measures as they too enter lockdowns. Our update below focuses on NSW – however if your business also operates in another State, we can certainly assist with information on state specific measures.
Here are the latest headlines, with further detail included below.
- Covid-19 Business Support Grant – Some additional guidance to the Covid-19 Business Support Grant including the alternative tests and the minimum 2-week period, etc. has been released. If your circumstances don’t fall into the basic eligibility criteria or alternative tests, businesses need to contact ServiceNSW, which we can assist you with.
- Commonwealth Covid-19 Disaster Payment – Workers will receive $375 for each week if they lost between 8 and less than 20 hours of work per week and $600 if they lost 20 hours or more of work per week. The $10,000 liquidity test has now been removed, and payments are made in arrears on weekly basis.
- Workers will need to assess whether they are considered eligible (broadly think JobKeeper) and ensure they are aware of the relevant opening and closing application dates based on the event date (i.e. Covid-19 restriction of movement event).
- Workers should reassess eligibility based on the removal of the $10,000 liquidity test.
- Payroll Tax Deferrals – There is currently inconsistent information regarding the end date of this deferral with the correct date yet to be confirmed but it is expected to be 7 October 2021.
- JobSaver and Micro-business Covid-19 Support Grant – Detailed information is yet to be released. We are expecting information and guidance around eligibility requirements to be released over the weekend given applications open from 26 July 2021.
Now to the detail …
Covid-19 Business Support Grant
Applications for the one-off 2021 Covid-19 Business Support Grant are now open for NSW businesses and close at 11:59pm on 13 September 2021. The Covid-19 Business Support Grant will be administered by ServiceNSW and businesses must prove they have suffered a decline in turnover over a minimum 2-week period from 26 June 2021 to 17 July 2021 compared to the same period in June and or July 2019. Testing is either a consecutive 2-week period within the 3-week period or it does appear businesses can use the full 3-week period.
With JobKeeper there were a variety of alternative tests, however, the Business Support Grant only appears to have two limited alternative tests. Broadly, these focus on businesses who did not have a full year of operation to the year ended 30 June 2020 or if turnover in June/July 2019 was not a true reflection due to natural disasters i.e. floods and bushfires. For circumstances falling outside of these alternatives, businesses are required to contact ServiceNSW, which we can assist with.
We understand that the grants will be tax free and we are assuming that they’ll be treated as non-assessable, non-exempt income – however this is still to be confirmed.
Headcount criteria requires a business to maintain the number of persons who are employed as opposed to the number of full-time-equivalent (FTE) staff. Employees who resign will be ignored for purposes of maintaining headcount however this raises a number of questions including whether you would still be considered as eligible as a result, etc. There is yet to be clarity on such issues.
For eligibility requirements, evidence and documentation required to support your application, please refer to our 2021 Covid-19 Business Support Grant story dated 20 July 2021.
The Commonwealth Covid-19 Disaster Payment
This is a support payment for workers adversely affected by a state public health order. This includes workers who:
- Live, work from or have visited a Commonwealth-declared hotspot; and
- Live, work from or have visited a location subject to a state or territory restricted movement order; and
- Had paid employment and because of the above, cannot attend work because of a Covid-19 restriction of movement event.
There are a number of eligibility rules (again think JobKeeper at first instance) to receive this payment including:
- you’re an Australian resident or hold a visa that gives you the right to work in Australia;
- you’re 17 years or older;
- you’re not getting an income support payment, ABSTUDY Living Allowance, Dad and Partner Pay or Parental Leave Pay;
- you’re not getting the Pandemic Leave Disaster Payment, a state or territory pandemic payment or a state small business payment for the same period; and
- you’ve lost income and don’t have any appropriate paid leave entitlements.
Currently in NSW, workers will receive $375 for each week if they lost between 8 and less than 20 hours of work per week and $600 if they lost 20 hours or more of work per week. If you’d like to apply please click here.
We note that these payments are Taxable Centrelink Payments and will be included in the recipient’s assessable income. Arrangements can be made to set up a deduction for tax to be withheld from the payment.
The $10,000 liquidity test has now been removed, and payments are made in arrears on weekly basis.
Payroll Tax Deferrals
Businesses can defer payments until 7 October, however there is currently conflicting information being provided from the NSW Office of State Revenue and ServiceNSW as to whether this is 2021 or 2022. It is expected to be 7 October 2021 however confirmation should hopefully be provided soon.
JobSaver and Micro-business Covid-19 Support Grant
We had expected information to be released by today, 23 July as applications are due to open next Monday, however, it looks as though information will not come out until over the weekend. As soon as information is released, we will prepare our view on what it all means for you and your business and distribute a communication.
ESV Engagement Partners are here to assist our clients during these challenging times – please don’t hesitate to contact us if you have any questions and want to know what support package/s you may be eligible for.