Tag: cash flow

JobSaver cash flow support to impacted businesses to help maintain NSW employee headcount on 13 July.

Applications close 18 October

The eligibility for JobSaver has been released and is expected to be open for applications from 26 July 2021. The program objective is to help businesses save jobs to support the economy after restrictions are lifted.

JobSaver will provide cash flow support for impacted businesses that will receive a backdated fortnightlypayment to cover costs from week 4 (18 July) of the Greater Sydney lockdown, onwards.

Businesses that have applied and are eligible for the  2021 COVID-19 business grant  will generally be automatically eligible for JobSaver but must provide further information on employee headcount and payroll. These businesses may be contacted by Service NSW if further information is required. 

Some businesses that are not eligible for the 2021 COVID-19 business grant are still eligible provided they meet specific criteria. These businesses will be required to complete an application form.

Available funding

• Fortnightly payments backdated to cover costs incurred from week-4 of the Greater Sydney lockdown (from 18 July). Once eligible, fortnightly payments will be automatic and businesses will not need to re-apply but must notify Service NSW if they are not maintaining their headcount that they had on 13 July. First payment backdated to 18 July.
• Minimum payment of $1,500 per week and maximum of $10,000 per week equivalent to 40% of Weekly Payroll for work performed in NSW.
• Non-employing businesses will receive $1,000 per week.
• The Weekly Payroll amount will be worked out by reference to the W1 amount reported on the most recent activity statement lodged with the ATO prior to 26 June 2021. For most businesses this will be either the March 2021 BAS (for quarterly withholders) or the May 2021 IAS (for monthly withholders). Amounts withheld on behalf of contractors and wages not related to NSW should be removed.
• Weekly Payroll Calculation– Take amount at W1 subtractW1 amounts that relate to states other than NSW subtractamounts withheld on behalf of contractors. The remaining amount is then divided by the number of days in the BAS period (depends on quarterly or monthly lodgment) and multiplied by 7. This will give the Weekly Payroll amount.
• The weekly payment (paid fortnightly) will be calculated as 40% of the amount calculated above as the Weekly Payroll amount.

Example

As an example, a business that lodged a W1 amount of $20,000 on their May Activity Statement (so a monthly withholder – assume only NSW wages and no contractors):

• W1 = $20,000
• Weekly Payroll – $20,000 divided by 31 days multiplied by 7 days
• Weekly Payroll equals $4,516
• Weekly Payment – $4,516 x 40%
• Weekly Payment equals $1,806
• This business would receive a payment of $3,612 per fortnight

Note: A quarterly withholder would likely use the March 2021 BAS and 90 days rather than 31 days in the above example.

Businesses that do not submit a BAS (such as weekly withholders) or have no W1 amount should use the ATO definition of W1 to calculate total wages. Then apply the same method as above.

Eligibility criteria

• Must have an ABN and operating in NSW at 1 June 2021. There are some exemptions if you have an ABN outside NSW but can demonstrate you operated within NSW at 1 June 2021.
• Aggregated turnover of more than $75,000  and less than $50M for year ended 30 June 2020. A micro business grant for businesses or sole traders with turnover of more than $30,000 but less than $75,000 will be available from late July.
• Decline in turnover of 30% or more due to the Public Health Order over a minimum 2-week period within the Greater Sydney lockdown (26 June and due to end 30 July compared to the same period in 2019).
• For employing businesses, maintain head count as at 13 July (Persons employed in NSW and who are Full-time and part-time and long-term (more than 12-month casuals) while they continue to receive JobSaver payments.
• Businesses that do not maintain the declared headcount must notify Service NSW. An employer will remain eligible if an employee voluntarily resigns.
• For non-employing businesses, the business receiving the payments must be the primary income source for the associated person. Individuals with more than one non-employing business can only claim from one business.
• Entities earning passive income (such as rental income) are not eligible.
• Employees canreceive Commonwealth COVID-19 Disaster Payments if their employer is receiving JobSaver.
• Non-employing businesses are noteligible for JobSaver if individuals associated with and deriving income from the business are receiving the Commonwealth COVID-19 Disaster Payment.

Evidence in support of eligibility

• Applicants must have experienced a decline in turnover of 30% or more over a minimum 2-week period from 26 June 2021 to 30 July 2021 compared to the same period in June and/or July 2019.
• Declare headcount on 13 July and declare this headcount will be maintained.
• Submit a tax return, notice of assessment or other document to show turnover between $75,000 and $50M.
• Evidence of Weekly Payroll:
  • Most recent BAS with a W1 amount submitted prior to 26 June within the 2020-21 financial year;
  • For businesses with no W1 (weekly withholder) their 2019-20 payroll tax return;
  • For business that do not submit a BAS – contact Service NSW.
• There is no alternate test for businesses that were not operating in 2019 (or if 2019 is not a true comparison) or did not meet the minimum $75,000 turnover. These applicants must contact Services NSW.
• If you are in a highly impacted industry a letter from your accountants is not required with your application.
• Anyone not in one of the highly impacted industries will require an accountant letter to submit with their application.

Some important notes

• Applicants must have lodged a 30 June 2020 tax return to demonstrate a minimum $75,000 turnover. We understand some clients that are eligible may not have lodged their 2020 tax return, however, we understand there will be other options available to prove the $75,000 turnover requirement. If you are in this position, please contact your Allan Hall advisor.
• Funding received from JobSaver is to be used to cover costs incurred from 18 July (Wages, rent etc.) The primary objective is to maintain employee relationships.
• Businesses that applied and were eligible for COVID-19 business grant will generally be automatically eligible for JobSaver but must provide further information on employee headcount and payroll.
• Construction and other industries are now considered highly Impacted .
• Where a business operates through a Trust, they will be required to provide additional information to demonstrate an aggregated turnover of $75k or more is derived through the Trust, as opposed to a business linked to a trust.

See more information at https://www.service.nsw.gov.au/jobsaver-payment-guidelines or call Allan Hall’s team on 02 9981 2300.

Other Employment Options

There are also a number of other options for employers to consider at this time, including:

• Allowing employees to continue to work from home
• Standing down employees unable to work with no pay
• Agreeing on changing rosters and hours of work
• Agreeing on changing employees’ duties

See our HR team’s article here for more details. Alternatively, please contact our HR team directly to discuss your unique business circumstances by emailing [email protected] or calling 1300 675 393.

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