NSW COVID-19 Stimulus Case Studies and FAQ - August 2021

By Cutcher & Neale Accounting and Financial Services - August 18, 2021

In response to our NSW COVID-19 Stimulus Update Webinar, we have created this resource to help answer any questions you may have, and help clarify what support is available for you. Refer to the links below, and as always if you have any questions, please be in touch with our team. 

I am a non-employing business.

I am an employing business.
I am a regional business (outside of Sydney).
Frequently Asked Questions.
Further COVID-19 Information.


Scenario 1 – Non-employing Business.

Dr Smith has been running his own business in Sydney for the past five years and the COVID-19 restrictions have impacted his business. A 30% or more decline in turnover due to the public health orders over a minimum two-week period has been met compared to the specified comparison periods. Dr Smith does not employ any staff in the business.

Accordingly, if Dr Smith meets the other eligibility criteria and depending on when Dr Smith experienced his 30%+ decline in turnover he may be eligible for both the COVID-19 Business Grant and/or the JobSaver payments. Due to not employing any staff in the business, Dr Smith is considered as not having payroll and will be eligible for a maximum of $1,000 per week in JobSaver payments. 

Question 1: 
If the business is an individual and additionally earns a salary are there any other considerations?

If Dr Smith also earns a salary, then he needs to review eligibility as the COVID-19 Business Grant and/or the JobSaver payments are only available if the business was the primary source of income for the individual

For a non-employing sole trader you need to determine that your primary income source comes from your sole trader medical activities. NSW Revenue have not provided clear guidance on the definition of ‘primary income', we recommend you commence the application process and contact NSW Revenue in relation to any concerns as part of the form lodgement.

Question 2:
If the business is an individual, can the individual claim both the Disaster Payment and the COVID-19 Grant and JobSaver.

An individual cannot receive both the Disaster Payment and/or the COVID-19 Business Grant and/or JobSaver payments.

Scenario 2 – Employing Business.

The Shenoy Trust has been in operation in Sydney for the past five years and the COVID-19 restrictions have impacted the business.
A 30% or more decline in turnover due to the public health orders over a minimum two-week period has been met compared to the specified comparison periods. The Shenoy Trust employs a number of staff as permanent (full-time and part-time) and casual
(long term > 12 months and <12 month casual).

Accordingly, if the Shenoy Trust meets the other eligibility criteria and depending on when the business experienced a 30%+ decline in turnover they may be eligible for both the COVID-19 Business Grant and/or the JobSaver payments.

Due to employing staff in the business, the Shenoy Trust will be eligible for 40% of the NSW Weekly Payroll costs (calculated in accordance with the guidelines) for a minimum of $1,500 per week in JobSaver payments. 

Question 1:
If the business is an individual and additionally earns a salary are there any other considerations?

For an employing sole trader you need to determine that your primary income source comes from your sole trader activities.

NSW Revenue have not provided clear guidance on the definition of ‘primary income,’ we recommend you commence the application process and contact NSW Revenue in relation to any concerns as part of the form lodgement.

Question 2:
If you are eligible for the JobSaver payment as a business, is there a requirement to keep employees on the same hours going forward, or can they be reduced?

Employees stood down (as opposed to terminated) under the Fair Work Act are considered employees for the purposes of the headcount for the business support measures.

Fairwork provides strict rules and guidelines in relation to pay, leave and stand downs. You need to be very careful with Fairwork and changes to employment arrangements. You should seek advice on this.

Generally, employers may be able to stand their employees down during the coronavirus outbreak for various reasons. This includes when: 

  • The business has closed because of an enforceable government direction (which means the employee can't be usefully employed, even from another location).
  • There's a stoppage of work due to lack of supply for which the employer can't be held responsible.

Before standing down employees, employers should consider; 

  • Working from home arrangements.
  • Temporary changes to duties, rosters or hours.

Question 3:
If employee hours are reduced due to a COVID-19 stand down, can the employees claim the Disaster Payment?

If staff have a reduction of hours due to a COVID-19 stand down, and they satisfy any other criteria they may claim the Disaster Payment.

Question 4:
If the employees claim the Disaster Payment, does this affect the business in any way?

Employees may apply for the Disaster Payment (based on their hours). Business that satisfy the eligibility criteria can apply for business support even if their staff are getting Disaster Payments.

Question 5:
If a staff member resigns while the business is receiving JobSaver payment, does the business have to do anything?

No, only actions within the employer's control will affect whether they meet this criteria.

Businesses will remain eligible if their employee headcount declines for reasons outside the control of the employer, for example, if employees voluntarily resign. Maintaining the headcount means that the employer will not take active steps to end an employment relationship with their employees. 

Question 6:
If a staff member is a close contact and needs to isolate for 14 days what benefits are available for the staff member?

The Pandemic Leave Disaster Payment (visit Services Australia website) provides assistance for people living in New South Wales who can't earn an income because they must self-isolate, quarantine, or care for someone who has COVID-19. Please note there are requirements to be met prior to claiming the payment such as exhausting leave entitlements first.

 

Scenario 3 – Regional Business (outside of Sydney).

Similar to Scenarios 1 and 2, The Herden Trust has been in operation in Newcastle (Regional NSW) for the past five years and the COVID-19 restrictions have impacted the business. However, the Herden Trust did not experience their decline in turnover for a minimum of two weeks until Mid- August when they were placed into lockdown.

Are there any changes to the eligibility criteria and payments to be aware of?

Question 1:
What are the comparison dates?

For the COVID Business Grant have to show minimum 30% reduction in turnover over a two-week period from 26 June 2021 to 17 July 2021 – as compared to the same period in 2019, the same period in 2020 or the two-weeks of  12 June 2021-25 June 2021 

The JobSaver program applies from 18 July 2021 and is designed to cover costs from week 4 of the lockdown onward if you show a minimum 30% reduction in turnover over a two-week period from 26 June 2021 onward – as compared to the same period in 2019, the same period in 2020 or the two-weeks of  12 June 2021-25 June 2021 

Question 2:
Is the business eligible for the Grant?

The test period for the Grant program is 26 June – 17 July. If your business has experienced the downturn after 17 July then it is not eligible for the Grant but may be eligible for JobSaver

Question 3:
When do the JobSaver payments commence?

The Services NSW website states that JobSaver payments will be backdated to cover costs incurred from week 4 i.e. payments will be made in arrears with first payment backdated to 18 July. Service NSW have not provided an end date for the scheme. Their guidelines refer to the end of the Greater Sydney lockdown which is currently 28 August. However it is expected that if the lockdown continues the JobSaver scheme will also continue.  

 

FAQ

I have already applied for the grant, but I have now checked my figures and realised that turnover decline is higher than originally calculated. Can I reapply for the grant?

Contact Services NSW to request more info e.g. a retest for the Grant. 

 

Are the disaster payments taxable?

The disaster payments are not taxable.

 

When calculating turnover for the support payments are JobKeeper and Cash Flow Boost payments included?

No, the turnover referred to is the GST definition of turnover, and the Cash Flow Boost and JobKeeper payments are not included. 

 

When calculating turnover, can we choose between cash and accruals for the decline in turnover?

Businesses must use the same basis they account for GST on their Business Activity Statements.

 

When do the JobSaver payments commence and when do they end?

The Services NSW website states that JobSaver payments will be backdated to cover costs incurred from week 4 i.e. payments will be made in arrears with first payment backdated to 18 July. Service NSW have not provided an end date for the scheme. Their guidelines refer to the end of the Greater Sydney lockdown which is currently 28 August. However it is expected that if the lockdown continues the JobSaver scheme will also continue.  



If you have any further questions, please get in touch with our team. 

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The material contained in this article is in the nature of general comment only, and neither purports, nor is intended to be advice on any particular matter.  Persons should not act or rely upon any information contained in or implied by  this article without seeking appropriate professional advice which relates specifically to his/her particular circumstances.  Cutcher & Neale expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this article.