SWASWASWA

What lockdown support is available to NSW business? – PART 1

  • 31/03/2023
Up to $100,000 in weekly JobSaver cashflow support payments

What lockdown support is available to NSW business? – PART 1

JobSaver: Cashflow Support of up to $100,000

JobSaver is a weekly payment between a minimum of $1,500 and maximum of $100,000 based on 40% of the NSW payroll payments of your business (including not-for-profits).

Eligible businesses without employees that meet the eligibility criteria (such as sole traders with no employees), will be able to access a payment of $1,000 per week.

The cashflow support will cease when lockdown restrictions are eased or when the Commonwealth hotspot declaration is removed.

Funding is also limited to specific purposes.

How to apply

Applications can be made online through Service NSW and close at 11:59pm on 18 October 2021.

If your business has successfully applied for the COVID-19 business grant, your business will be automatically eligible for JobSaver but will need to provide the additional information on payroll and headcount.

To apply for JobSaver, you will need your business’s Australian income tax return, Notice of Assessment or other documentation demonstrating the business had a national aggregated annual turnover of between $75,000 and $250 million for the 2020 income year.

If your business is not on the highly impacted industries list, you will also need to submit a letter from us demonstrating that that you meet the decline in turnover test.

If your business is in the performing arts sector, please see the NSW Performing Arts COVID support package – CreateNSW is streamlining all applications through them.

Eligibility

  • Have an active ABN; and
  • Can demonstrate that your business was operating in NSW as at 1 June 2021; and
  • Had an aggregated turnover between $75,000 and $250 million for the year ended 30 June 2020; and
  • Maintain employee headcount as at 13 July 2021 – the number of people you employed in NSW including full time, part time and long-term casuals that have been employed by the business for more than 12 months; and
  • Have experienced a decline in turnover of at least 30% over a minimum 2-week period from the start of the Greater Sydney Lockdown (from 26 June 2021), compared to the same period in 2019. The application will ask you for your lowest fortnightly turnover in this period.

Some businesses are ineligible for JobSaver. These include businesses predominantly earning passive income (rent, interest, or dividends), businesses owned by sovereign entities (foreign Governments), businesses in liquidation or bankruptcy proceedings, businesses that did not have an ABN as at 1 June or backdated their ABN, government agencies, local governments, banks, and universities.

How is the 40% of payroll calculated?

Your payroll is based on your most recent Business Activity Statement (BAS) lodged with the ATO prior to 26 June 2021 for the 2020-21 financial year. Use the figure at item WI, removing any amounts withheld on behalf of contractors. To determine weekly payroll, divide the amount by the number of days in the BAS period and multiply this by 7.

For businesses with employees outside of NSW, you will need to calculate the amount based on just the NSW employees using the same method you use to report on your BAS.

If your business does not submit a BAS with a W1 amount, use your 2019-20 NSW payroll tax reconciliation return. If your business does not submit a BAS, you will need to contact ServiceNSW to discuss alternatives.

Where an employer’s headcount changed because of circumstances outside the control of the employer (such as voluntary resignations, death of an employee) it will not be taken as a reduction in employee headcount on 13 July.

I don’t have employees, can I still qualify?

If your business does not have employees (such as sole traders) but meets all the other eligibility tests, you can apply for JobSaver but only if the individuals associated with and deriving income from the business have not received a Commonwealth COVID-19 Disaster Payment since 18 July 2021. You also need to ensure that the business is the primary income source for the associated person.

I have stood down my employees, do they still qualify for the headcount test?

Yes. If you have stood down your full time, part time or long-term casual employees, they are counted in the headcount. During a stand down the employment relationship remains (their role has not been terminated), the employee is not paid (unless they are taking paid leave), and they continue to accrue annual leave. See the FairWork website to clarify how and when an employer can stand down employees.

An employee has resigned, does this impact my headcount?

No. If the employee is no longer with the business due to circumstances outside of your control, such as resignation or death, this will not impact the headcount test.

If however you forced the employee to resign or terminated their employment, this will impact on your headcount and eligibility for JobSaver and the COVID-19 business grant. Any actions taken by the business that reduce headcount will need to be reported to Service NSW.

How is aggregated annual turnover measured?

Aggregated turnover is generally your business’s annual turnover plus the annual turnover of any business connected with you or that are an affiliate of yours. If you have any related entities that carry on a business, please contact us and we’ll work with you on calculating this figure.

Annual turnover generally includes income that has been generated in the ordinary course of carrying on a business. You would normally use GST-exclusive figures for this purpose. ATO guidance suggests that JobKeeper and cash flow boost amounts would probably be ignored as part of this calculation.

How is decline in turnover measured?

In general, GST turnover concepts are used to determine whether the business has suffered a decline in turnover of at least 30%.

However, ServiceNSW has not provided clear guidance on how GST turnover should be calculated for the purpose of this grant. If it is not clear whether your business can pass this test, it may be necessary to contact ServiceNSW to discuss the situation.

I don’t have a 2019 comparison period, can I still get help?

Businesses that are not able to meet all the eligibility criteria can still potentially qualify for the grant, but it is necessary to contact ServiceNSW to discuss the situation before applying. Alternatives may be available where:

  • You can demonstrate over a shorter period prior to 26 June 2021 that your aggregated income would have been $75,000; or
  • Your turnover in the test period in 2019 was not representative of your normal turnover, for example because of bush fires.

You are likely to need us to verify any alternative scenarios for you as part of your application.