The Commonwealth and New South Wales governments yesterday announced a joint package of support measures. The measures will also be available for other states and territories. The goal is to support business cashflow and households to get them through extended lockdowns.
The measures are targeted, and intended to be rolled out as quickly as possible. The support will be available from the fourth week onwards, where a lockdown because of a Commonwealth-declared hotspot extends beyond three weeks. Despite the intended quick roll out, there are eligibility details requiring clarification.
Small & medium business support payments
Eligible businesses and not-for-profits in New South Wales can register to receive support payments in the style of last year’s Cash Flow Boost. The support payments will be 40% of an entity’s NSW payroll payments, at a minimum of $1,500 and a maximum of $10,000 per week, and will be available from next week.
To be eligible, an entity must satisfy the following:
- Annual turnover between $75,000 and $50 million.
- Turnover is 30 per cent lower than an equivalent two-week period in 2019.
- Maintain full-time, part-time and long-term casual “staffing level” as of yesterday, 13 July.
The wording in the announcement suggests that the above annual turnover thresholds are for the entity alone, and not grouped with related entities. It’s also not clear what period of time will be the basis for measuring annual turnover (eg, the year ended 30 June 2021?). It’s also not yet clear what precise dates in 2019 and 2021 will mark the two-week periods for comparison. And again, it’s not clear if maintaining yesterday’s staffing level applies separately to those three categories of staff, or the total overall.
It is expected that details will be confirmed as soon as possible. For eligible non-employing businesses, such as sole traders, the payment will set at $1,000 per week.
The payments will be funded 50/50 between the Commonwealth and NSW governments, and will be administered by Service NSW.
If you believe you might be eligible, here are the things to get started on:
- Registration is open from today (go here).
- Satisfy yourself that you meet the annual turnover thresholds.
- Extract records to evidence your business’s weekly turnover for, say, the month of June and the first two weeks of July 2019.
- Extract your records for your weekly turnover for the last few weeks.
- Once the precise dates for measuring the two-week comparison are confirmed, satisfy yourself that the 30 per cent decline in turnover has been met.
It’s not clear if the payments will be made weekly or less frequently, but perhaps will be weekly due to being based on weekly payroll. It is presumed that registered eligible entities will be required to submit a statement declaring their weekly NSW payroll payments in order to receive the payments. This of course will be data-matched to disclosures in the normal payroll tax compliance.
The payments will cease when the lockdown restrictions are eased, or when the Commonwealth hotspot declaration is removed.
Tax administration relief
The Commonwealth government will provide additional support through the tax system by:
- Making the above support payments exempt from income tax, and same for NSW small business grants (see here).
- Provide administrative relief to NSW taxpayers facing hardship, including reduced payment plans, no interest charged on late payments, and varying tax instalments on request.
COVID-19 Disaster Payment
The Commonwealth government will enhance this payment as follows:
- From week four of a lockdown because of a Commonwealth declared hotspot, this payment will increase from $500 to $600 each week if a person has lost 20 hours or more of work a week, or $325 to $375 each week if a person has lost between 8 and 20 hours of work.
- Make this payment 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.
- Amend the COVID-19 Disaster Payment so that a person would be eligible for the payment, including where they are still working, provided they have lost more than 8 hours or a full day of work.
From 18 July 2021 the COVID-19 Disaster Payment will be available to those outside Commonwealth declared hotspots in NSW that meet the criteria for the payment.
The NSW Government will fund any payments outside a Commonwealth declared hotspot, with the Commonwealth continuing to fund payments to recipients in a Commonwealth declared hotspot. This arrangement will also be available to other states and territories for future lockdown as a result of a Commonwealth declared hotspot.
The NSW government will provide micro-businesses with turnover above $30,000 but below $75,000 with a backdated $1,500 per-fortnight payment from week one of the lockdown if they have experienced a 30 per cent reduction in turnover. Payroll tax liabilities will also be deferred for two months.
The business grants program announced two weeks ago has been expanded, with grants between $7,500 and $15,000 available to eligible businesses with annual wages up to $10 million. Also, there will be a payroll tax waiver of 25 per cent for businesses with Australian wages of between $1.2 million and $10 million that have experienced a 30 per cent decline in turnover.
Commercial landlords in NSW will receive a land tax rebate to help quell commercial evictions. Also, residential evictions will not be permitted for the next 60 days for workers who have experienced a reduction in income of 25 per cent or more. A land tax rebate will also be afforded to residential landlords.
Mental health support
The Commonwealth and NSW governments will provide additional funding for a number of mental health support services in NSW. Similar additional support will be provided to other states or territories experiencing lockdowns.
As noted, there are details to be confirmed, but talk to your trusted Nexia advisor if you think your business might be eligible for any of these support measures.