The Commonwealth and NSW Government’s have recently announced a new grants package to support businesses during the current NSW lockdown. The support package includes:
- COVID-19 business grant
- COVID-19 micro businesses grant
- Disaster payment grant for workers
- Payroll tax relief
- Land tax relief
- Support for accommodation providers
- Support for creative arts industry
The Commonwealth Government will co-fund the COVID-19 business grant and the disaster payment grant. We provide a summary of the packages below.
|1. COVID-19 business grant |
The COVID-19 business grant is available to businesses, sole traders or not-for-profit organisations in NSW who are impacted by the recent COVID-19 lockdown. Three different grant amounts will be available depending on the decline in turnover experienced during the lockdown restrictions:
- $15,000 for a decline of 70% or more;
- $10,500 for a decline of 50% or more;
- $7,500 for a decline of 30% or more.
To be eligible for the COVID-19 business grant you must:
- have an Australian Business Number (ABN)
- have been operating in NSW as at 1 June 2021;
- have total annual Australian wages of $10 million or less as at 1 July 2020;
- have had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020;
- have business costs for which there is no other government support available;
- have experienced a decline in turnover of at least 30% due to the Public Health Orders over a minimum 2-week period from 26 June 2021 to 26 July 2021 compared to the same period in June and/or July 2019;
- maintain your employee headcount as at 13 July 2021 for the period for which the business is receiving payments under this grant and the JobSaver scheme.
A different comparison period may be used for businesses on the Victorian border impacted by the NSW stay at home orders that commenced on 27 May 2021.
While information is scant, it appears that you can still apply if you do not meet the minimum $75,000 turnover threshold for the year ended 30 June 2020 providing you can demonstrate that your business has been significantly impacted by the Public Health Orders and also establish that:
- you were not operating for a full year to 30 June 2020 but have turnover equivalent to $75,000 per annum over a shorter period to 26 June 2021; or
- your turnover in June / July 2019 was not representative of your usual or average turnover which would be at least $75,000 per annum but wasn’t for example due to drought or bushfires.
Decline in turnover test
The decline in turnover test will be in accordance with the Australian Taxation Office’s GST rules, and should therefore be calculated consistently with your GST reporting basis for the applicable periods. Supporting evidence to verify the required decline in turnover may be required to be lodged with the application, generally in the form of a letter from a qualified accountant, tax or BAS agent.
Applications are now open. Please visit Service NSW for more details.
|2. COVID-19 micro businesses grant|
A new grant will also be available for micro businesses with annual turnover between $30,000 and $75,000 who have suffered at least a 30% decline in turnover. The eligible businesses will receive $1,500 per fortnight during the lockdown restrictions.
The micro business grant will be available for application from late July 2021. More details on eligibility criteria will be released in coming days. Please visit Service NSW website for more details.
The NSW government will provide cashflow support to businesses to help them retain staff. Eligible businesses will receive up to 40% of their NSW payroll payments between $1,500 and $10,000 per week during the lockdown restrictions. For non-employee businesses, such as sole traders, the payment will be set at $1,000 per week.
- A revenue decline of 30% or more;
- Annual turnover between $75,000 to $50 million;
- Required to maintain their full time, part time and long term casual staffing level as of 13 July 2021.
The JobSaver scheme will be available for application from late July 2021. More details on eligibility criteria will be released in coming days. Please visit Service NSW website for more details.
|4. Disaster payment grant for workers|
The Commonwealth Government will enhance and expand the support available to NSW and other states that experience an extended lockdown. This is in extension to the existing disaster payment package that was announced in June 2021.
The new package will start from week four of a lockdown and the payment will increase from $500 to $600 per week if a person has lost 20 hours or more of work a week (and increased from $325 to $375 per week if a person has lost between 8 and 20 hours of work).
It will also make the Disaster payment grant a recurring payment for approved recipients for as long as the Commonwealth declared hotspot and lockdown restrictions remain in place. This will remove the need for recipients to re-claim for each seven day period of a lockdown.
It will also extend to workers who are still working, provided they have lost more than 8 hours or a full day of work. From 18 July 2021, the payment will also be made available to those outside Commonwealth declared hotspots in NSW that meet the eligibility criteria.
General eligibility rules
To be eligible for the disaster payment a worker must:
- be an Australian resident or hold an eligible working visa;
- be aged 17 years or older;
- not be receiving an income support payment, ABSTUDY Living Allowance, Dad and Partner Pay or Parental Leave Pay;
- not be receiving the Pandemic Leave Disaster Payment, a state or territory pandemic payment or a state small business payment for the same period;
- live in, work from or have visited a Commonwealth-declared COVID-19 hotspot;
- live in, work from or have visited a location subject to a state or territory restricted movement order;
- have had paid employment and because you were in the COVID-19 hotspot or are subject to restricted movement, and can’t attend work on or after day 8 of the lockdown;
- have lost income on or after day 8 of the lockdown and doesn’t have any appropriate paid leave entitlements;
- have liquid assets less than $10,000.
On 8 July 2021, the Prime Minister announced the $10,000 liquid assets test will be waived from the third week of a lockdown. It was also agreed that the liquid asset requirement is not required for a period starting from:
- 8 July 2021 for parts of Sydney;
- 11 July 2021 for Greater Sydney.
Applications are now open and can be made via myGov. Please visit Services Australia for more details.
|5. Payroll tax concessions|
Payroll tax concessions will be available for eligible businesses with a 30% decline in turnover. The payroll tax relief will be in the form of:
- Payroll tax lodgement and payment deferrals until 7 October 2021;
- a 25% concession for medium-sized businesses with grouped Australian wages of $10m or less.
- A revenue decline of 30% or more;
- Businesses with grouped Australian wages up to $10m.
More information on the 25% reduction will be available by end of August 2021. Please visit Revenue NSW for more details.
Land tax relief will be available to commercial and residential landowners, who provide a reduction in rent to a tenant who is experiencing financial distress as a result of COVID-19.
A landowner providing a reduction in rent to a tenant between 1 July 2021 and 31 December 2021 can receive a reduction in land tax payable for the relevant parcel of land. The land tax reduction will be the lesser of:
- the amount of rent reduction provided to an eligible tenant for any period between 1 July 2021 and 31 December 2021, or
- 100 per cent of the land tax attributable to the parcel of land leased to that tenant.
- You are leasing a parcel of land to:
- a commercial tenant, who has an annual turnover of up to $50 million and is eligible to be approved for the Micro-business COVID-19 Support Grant, the 2021 COVID-19 NSW Business Grant and/or the JobSaver scheme, or
- a residential tenant who has had a reduction in household income of 25 per cent (or more) as a result of COVID-19 and in respect of which you are not claiming the Residential Tenancy Support Payment.
- You reduce the rent of the affected tenant for any period between 1 July 2021 and 31 December 2021, and
- For 2021, you have land tax attributable to the parcel of land leased to that tenant.
|7. Support for accommodation providers|
Accommodation providers that have lost business during the recent school holiday period due to room cancellations will also receive $2,000 for up to 10 room nights cancellation (or $5,000 for 11 or more room nights). Where a provider owns multiple accommodation premises with different street addresses, each address can qualify.
- The business must be registered for GST;
- The accommodation must be located in NSW and be an entire property, not just a spare room in a residence;
- Applies for room nights lost between 25 June 2021 to 11 July 2021;
- Provide supporting evidence of cancellations.
More details will be available in Service NSW in due course.
|8. Support for creative arts industry|
Relief package payments to not-for-profits, some commercial theatres and commercial music venues, may be available to meet costs for current productions and to reschedule performances. Payments will be based on a percentage of the venue capacity and the average ticket price.
Eligible organisations will need to provide at minimum evidence of performances schedules, venues and ticket prices.
More details will be available in Create NSW in due course.
The material contained in this newsletter is in the nature of general comment and information only and neither purports, nor is intended, to be advice on any particular matter. Readers should not act or rely upon any matter or information contained in or implied by this newsletter without taking appropriate professional advice.