JobSaver Payment Scheme
By Paolo Coniglio, 18.08.2021
The second most significant support initiative by the State Government to aid NSW Businesses is the JobSaver Incentive Scheme. The scheme has been introduced to provide cashflow support to NSW Businesses impacted by the Enforceable Lockdown Government directions and help them maintain their Employee headcount during this period.
The goal of the JobSaver scheme is to help the continuation of jobs and support the rise of the State Economy after the COVID restrictions are lifted.
Eligible Businesses and Not-For-Profit Organisations will receive fortnightly payments equivalent to 40% of the average of their NSW based weekly wages.
Whilst the 2021 COVID-19 Business Grant covers Businesses impacted during the first 3 weeks of the Greater Sydney lockdown or the period immediately prior to the Grater Sydney lockdown for Businesses located close to the Victorian border. The JobSaver Scheme is set to support NSW Businesses for the period immediately after the first 3 weeks of the lockdown.
Businesses affected by the lockdown have from 26 July 2021 to 18 October 2021 to apply for the scheme. The NSW Government will then backdate the payments to cover costs incurred from week 4 of the Greater Sydney lockdown (from 18 July 2021 onwards).
Eligible Businesses and Not-For-Profit Organisations thave have Employees will receive from a minimum payment of $1,500 to a maximum of $100,000 per week.
Eligible Businesses and Not-For-Profit Organisations that do not have any Employees will receive $1,000 per week.
Upon successful application, Businesses will receive automatic fortnightly payments made in arrears with the first payments backdated to 18 July.
Businesses that will not maintain their employee headcount as of 13 July 2021 will need to notify Service NSW.
What types of Businesses are eligible?
The following Business types can apply to the JobSaver Scheme:
- Not for Profit Organisations;
- Sole Traders and Partnerships (providing that the Business applying for the scheme represents the primary source of income for the associated person(s)
As well as meeting the required decline in turnover, to be eligible for the Covid-19 Business Grant, Businesses must also meet the following eligibility criteria:
- have a valid Australian Business Number (ABN) operating in New South Wales as of 1 June 2021;
- have an aggregated annual turnover between $75,000 and $250 million for the Financial Year ended on 30 June 2020;
- maintain their employee headcount as of 13 July 2021 for the period in which the Business is receiving payments under this Grant and the JobSaver scheme.
What type of Businesses are not eligible?
A business is not eligible for the 2021 COVID-19 Business Grant if any of the following conditions apply:
- the Major Bank Levy was imposed on the entity or a member of its consolidated group for any quarter before 1 July 2021
- the entity is an Australian government agency (within the meaning of the Income Tax Assessment Act 1997)
- the entity is a local governing body
- the entity is wholly owned by an Australian government agency or local governing body
- the entity is a sovereign entity or owned by a sovereign entity
- the entity is a company in liquidation or provisional liquidation
- the entity is an individual who has entered bankruptcy
- the entity has been found to have been engaged in fraud
- the entity primarily earns passive income (rents, interest, or dividends).
See the full list of ineligible business types.
Meeting the GST Decline in Turnover
Eligible Businesses need to have experienced a decline in turnover over a 2 week period between 26 June 2021 and 28 August 2021 compared to one of the following periods:
- the same 2-week period in 2019;
- the same 2-week period in 2020;
- the 2-week period immediately before the lockdown commenced (12-25 June 2021)
Businesses may be eligible to use alternate testing periods if they fall within specific Alternative Circumstances.
The Decline in Turnover test must be assessed using the same reporting method (Cash or Accruals) applied to the GST reported on the Business Activity Statements.
Application Process – Evidence in support of eligibility
Businesses need to Declare and submit evidence of their eligibility.
As part of the Application process, Businesses must declare the following:
If the Business has Employees:
- their employee headcount as of 13 July 2021;
- that they will maintain their employee headcount from 13 July 2021 for the period for which the business is receiving payments under the JobSaver scheme and they will notify Service NSW if their employee headcount declines over the period of the payment due to any actions of the business.
Note: Reductions in employee headcount resulting from circumstances outside the control of the Employer (such as voluntary resignations) will not be considered as a reduction in employee headcount from 13 July.
If the Business does not have employees:
- that the business is the primary income source for the associated person(s).
In support of their Application Businesses need to provide Service NSW with the following documents:
- A copy of their 2020 Financial Year Australian Tax Return or equivalent documentation which can demonstrate the eligible aggregated turnover
- A copy of the most recent Activity Statement lodged prior to the 30th June 2021 (however lodged within the 2020-21 Financial Year) to provide evidence on how their Weekly Payroll amount was calculated;
Note: Businesses that do not declare wage as part of their Activity Statements can provide the 2020 Financial Year NSW Payroll Tax Reconciliation Return and copies of the payroll report/s filed to the ATO through Single Touch Payroll.
- A letter of evidence showing the Business has met the required decline in turnover issued by a Registered Practitioner (BAS Agent, Tax Agent or qualified Accountant).
Note: this requirement only applies if the Business is not part of the list of highly impacted industries list or the expected JobSaver weekly payment is over $10,000.
Finally, as part of the Application, Businesses should provide the average of NSW Weekly wages.
Calculate the Average of NSW Weekly Wages
The Average of NSW Weekly Wages must be calculated using the following formula:
- Use the amount reported in W1 on the most recent Activity Statement lodged prior to June 2021;
- From W1 deduct the following wages (if applicable):
- Wages paid to Employees based outside of NSW;
- Payments reported on behalf of contractors under a Voluntary Withholding Agreement.
- Calculate the number of days in the BAS period used
- Calculate the Average Daily Wages as follows: Wages in W1 – (Wages Outside NSW + Subcontractor Wages) / Number of days in the BAS period used
- Calculate the Average Weekly Wages as follows: Daily Wages * 7.
How funding can be spent
As general guidelines, funding can be spent towards the following expenses:
- salaries and wages;
- utilities and rent;
- financial, legal or other advice;
- marketing and communications;
- perishable goods; or
- other business costs.
Whilst JobSaver payments can be used to cover general business costs, the primary objective of the Scheme is to help Businesses maintaining employment and be in a position to start trading immediately once the restrictions are lifted, without incurring additional hiring and training overheads.
However, unlike previous COVID Support Measures implemented to support the continuation of Employment (JobKeeper), Employers have no obligation to pass the JobSaver payments to their Employees. This means that Employers can stand down Employees without pay and still receive the JobSaver payments.
This blog and attached resources are of general nature designed for informational and educational purposes only. They should not be construed as professional financial advice for your individual business. Should you need such advice, consult a licensed financial or tax advisor.