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COVID-19 grants and business support explained

Benjamin Kluwgant

23RD JULY, 2021

With Delta-strain outbreaks leading to a series of lockdowns across the country, State and Federal governments have released various support packages for affected businesses.

Circuit breakers, extended lockdowns and stay-at-home orders have meant 2021 is beginning to look a lot like 2020.

But with JobKeeper having wound up earlier this year, new business support initiatives have been launched by both the Commonwealth and State governments in an attempt to ease the burden that these lockdowns place on many businesses.

Key takeaways:

  • Federal support for businesses explained
  • State-based business support for NSW, Victoria, SA and WA

NB: This article is designed to be general in nature and should not be considered professional advice. Businesses impacted by lockdowns are advised to seek the advice of a qualified accountant or registered tax professional before making any decision in applying for government grants and support.

Federal support: COVID-19 Disaster Payments

Led by the Federal government, this initiative has been designed to support individuals who are unable to work due to state-driven lockdowns or stay-at-home orders.

There are two payment tiers, depending on how much work the person has lost.

  • Tier 1: $500 per week for the first two weeks when the person is ordinarily engaged in at 20 hours of paid work per week, and $600 for subsequent weeks
  • Tier 2: $325 per week for the first two weeks for those ordinarily engaged in less than 20 hours per week, and $375 for subsequent weeks

A new application is required for each lockdown period. To apply, eligible Australian residents are required to log on to their myGov accounts online and claim the payment through their Centrelink account, while eligible visa holders must call the Services Australia Support line on 180 22 66.

Once a claim has been finalised, the funds can be expected to be received within 24 hours, or on the next available business day.

Additional information about the COVID-19 Disaster Payment scheme is available on the Services Australia website.

New South Wales business support

Sydney and various other parts of NSW have been hit the hardest by the state’s outbreak of the Delta-variant, which saw cases surge from a single limousine driver to over 1000 cases in a matter of weeks.

At present, there are a number of different support packages available for businesses across NSW, depending on their size and contingent on a decline in payroll.

Covid19 Business Support Grant

Eligible businesses with a payroll of $10 million or less (as at 1 July 2020) and an annual turnover of between $75,000 and $50 million (inclusive) for 2020 income year, can apply for a once-off payment of between $7,500 and $15,000.

This payment will depend on the extent of their decline in revenue during a two-week period (from 26 June to 17 July 2021) under government-imposed restrictions when compared against the same period in June and/or July 2019.

  • $7,500 will be available for those with a decline of 30 percent or more (Tier 1)
  • $10,000 will be available for those with a decline of 50 percent or more (Tier 2)
  • $15,000 will be available for those with a decline of 70 percent or more (Tier 3)

To be eligible for the payment, businesses are also expected not to let go of any employees and maintain their physical headcount through the grant period (not a full-time equivalent headcount).

Grant funds can be used on a series of eligible expenses, including wages and overheads, a series of professional services such as legal and marketing, cost of perishable goods and other general business expenses.

However, businesses applying for the grants should avoid accidentally double-dipping.

“Businesses are advised not to claim business expenses for these grants if they’re also covered by another form of government support,” says MYOB tax expert, Jacqueline Lim.

The NSW government expects for all grant applicants to demonstrate their eligibility through providing evidence that they meet the criteria, prompting calls to business accountants.

“If you’ve been working with a qualified accountant or registered tax agent, reach out to them for help with reporting any key financials and advice on how to provide evidence for your claims,” said Lim.

Further information about the Business Grants programme can be found on the Service NSW government website, and applications can be made via the online portal.

Micro-Business Support Grant

For smaller businesses with a turnover between $30,000 and $75,000, a fortnightly payment of $1,500 can be claimed, as long as the business has experienced a revenue decline of 30 percent or more.

These micro-business support payments are being asked to register their interest for the program on the Service NSW website, and the program, which opens to applications on 26 July, is expected to begin making payments by the end of the month.

NSW JobSaver

In addition to the measures outlined above, businesses can also claim a cash flow payment of up to 40 percent of their weekly payroll, capped at $10,000 per week.

For sole traders, this payment will be capped at $1,000 per week.

To be eligible for these payments, the business needs to have experienced a revenue-decline of at least 30 percent, and have maintained its employee headcount since 13 July.

Payments will begin flowing from the end of July as well, and Service NSW is asking for eligible businesses to register their interest for this program as well.

Payroll tax waiver, plus a government fees and charges rebate

A payroll tax waiver of 25 percent for businesses with payroll between $1.2 million and $10 million is available for those that see a revenue decline of 30 percent or more. Meanwhile, payroll tax deferrals, interest free repayment plans and land tax relief are also available.

A small business fees-and-charges rebate is also available in the form of a digital credit to offset the cost of eligible NSW and local government fees and charges to businesses.

Victorian business support

The Delta-variant has also hit the state of Victoria, which is currently enduring its second lockdown in the space of two months.

To provide affected businesses with the financial support they need to stay afloat, the Victorian government has announced a second top up to its Licensed Hospitality Venue Fund and Business Cost Assistance Program above the top-up payments announced for 16 July.

That means those who are eligible for the Licensed Hospitality Venue Fund will now receive an additional $4,200, bringing the total support to $7,200.

The Business Costs Assistance Program will now deliver an additional $2,800, for a total grant of either $4,800 to eligible businesses with a payroll of up to $10 million, depending on previous support payments.

Businesses that received these payments during the last lockdown will be automatically granted the funds this time round without needing to apply, but there is a ‘watch out’ for businesses not to try and game the system.

“If a business receives a grant under the Licensed Hospitality Venue Fund, it will not be eligible for a grant under the Business Cost Assistance Program,” said Lim.

The State government has said the new top up, called the 21 July 2021 Top-Up Payment, will be available to businesses that perhaps weren’t eligible before but are now. New applications will be opening shortly and can be made via the Business Victoria website.

There’s even a special dispensation for those hospitality, retail, accommodation and experience operators in Victoria’s alpine regions, as this lockdown bites in the middle of their high season.

As a result, businesses that were eligible for grants up to $15,000 will receive an additional $3,000 through any entitlements under either the Licensed Hospitality Venue Fund or the Business Costs Assistance Program.

Meanwhile presenters who work within the live performance space will be able to receive $7,000 payments, and their suppliers will be eligible for $2,000 payments as well.

Additional funding of up to $25,000 is also available for those working in the public events space as well.

South Australia’s Business Support Package

The recent outbreak in our nation’s south has led its State government to place the entire region into a week-long lockdown, with strict stay-at-home orders applicable across the board.

Premier Steven Marshall unveiled a new business support package in light of the latest lockdown, with once-off cash payments of $3,000 available to eligible businesses with a turnover of $75,000 or more, a payroll of less than $10 million, and a turnover-decline of 30 percent in over the week period from July 20.

Applications for this once off payments are set to open within the coming weeks and close 30 September, and the South Australian government is currently appealing to eligible businesses to register their interest in the program online. A $1,000 grant is also available to eligible non-employing businesses.

Western Australian Lockdown Assistance program

While Australia’s west is not currently in lockdown, funding is currently available to businesses who were impacted by the stay-at-home orders that were issued in late June.

The grant program, which is currently available to those in Perth, Peel and regional WA, is offering once-off payments of up to $3,000, which can be claimed via the Small Business WA website.

To be eligible, the business needs to have a turnover of $75,000, a payroll of less than $4 million during the 2020 income year, and operate within a series of eligible industries, as well as having suffered a financial loss due to the lockdown period, or experienced at least a 30 percent reduction in turnover.

More information about this funding package can be found on the Small Business WA website as well.

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