The NSW Government has provided further detail on the 2021 COVID-19 Business Grant including greater clarity around the eligibility requirements and the documentation required for application.
The program provides grants of between $7,500 and $15,000 to eligible businesses with annual Australian wages up to $10 million.
Businesses (including sole traders) and not-for-profits will be eligible for the 2021 COVID-19 Business Grant if they meet the criteria below.
- have an ABN registered in NSW or can demonstrate that they are physically located and primarily operating in NSW as at 1 June 2021 (only one grant is available for each ABN).
- have total Australian annual wages below $10,000,000 as at 1 July 2020.
- have an aggregated annual turnover of between $75,000 and $50 million (inclusive) for the year ended 30 June 2020.
- have business costs for which there is no other government support available.
- maintain their employee headcount as at 13 July 2021 for the period which the business is receiving payments under this Grant and the JobSaver scheme.
Businesses that are not eligible
A business will not be eligible if any of the following criteria apply:
- the entity is a non-employing business if persons associated with the business, and who derive income from it, have applied for, or are receiving, the Commonwealth COVID-19 Disaster Payment.
- 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).
Eligible businesses will receive:
- $15,000 for a decline in turnover of 70%, or more
- $10,500 for a decline in turnover of 50%, or more
- $7,500 for a decline in turnover of 30%, or more.
The decline in turnover is calculated by comparing the business’s turnover over a minimum two-week period from 26 June 2021 to 17 July 2021, to the same period in 2019 (not 2020 as the desired comparison period is specifically June/July 2019 which was pre-COVID).
A different comparison period applies to ‘Southern Border businesses’ (as defined in the Guidelines – but broadly a business located near the Victorian border) impacted by the NSW stay at home orders that commenced on 27 May 2021. The comparison period for these businesses is a minimum 2-week period from 27 May 2021 to 17 July 2021 compared to the same period in 2019.
What you need before you apply
To apply, you will need to provide:
- a MyServiceNSW Account
- proof of identity
- a valid ABN/ACN number
- your business banking details for payment
- Australian income tax return or Notice of Assessment
- Details of your qualified accountant, registered tax agent or registered BAS agent
In addition, you will need to submit a letter from your qualified accountant, registered tax agent or registered BAS agent as evidence of your decline in turnover if one of the following applies:
- Your business is not on the highly impacted industries list. This applies for all three grant tiers.
- Your business is on the highly impacted industries list and you are eligible for a $15,000 grant (i.e. decline in turnover of 70% or more). Note – you will not receive the full amount unless you provide the letter.
How to Apply for the Grant
Applications for the Grant are made through the Service NSW website and are now open until 11:59pm on 13 September 2021.
- Check you meet the eligibility criteria.
- Have your documentation and evidence ready for uploading.
Note: You cannot save and resume your application once you’ve started.
- Select the ‘Apply online’ button.
- Log in,or create your MyServiceNSW Account.
- Select and verify your identity documents.
- When your identity is verified, select ‘Continue’.
- Confirm your personal details.
- Enter your business details and answer the eligibility questions, then select ‘Next’.
- Provide information about your decline in turnover and upload your supporting documentation, then select ‘Next’.
- Enter your bank details, then select ‘Next’.
- Review your application.
- Check the declaration boxes.
- Select ‘Submit’ to complete your application.
After submitting your application, you will receive a confirmation email with your application reference number. If you do not receive this confirmation email, check your junk mail folder, and then call Service NSW on 13 77 88 if you’re still unable to locate the email.
Service NSW will review your application and contact you should they require additional information to support your application. If your application is approved, funds will be transferred to your specified bank account within 5 business days from the approval date.
If you do not satisfy the above eligibility criteria, businesses should contact Service NSW if any of the following alternative circumstances apply:
- Your ABN is not registered in NSW but the business was operating in NSW as at 1 June 2021
- You cannot demonstrate the minimum $75,000 aggregated annual turnover or minimum decline in turnover because:
- Your business was not operating for the full year to 30 June 2020 (e.g. new business) but you can demonstrate income consistent with $75,000 per annum over a shorter period prior to 26 June 2021, and can demonstrate your business has been significantly impacted by the Public Health Orders, or
- Turnover in June/July 2019 was not representative of the business’s usual or average turnover which is usually at least $75,000 per annum, and they can demonstrate they have been significantly impacted by the Public Health Orders.
Further if your business does not lodge a Business Activity Stamen (BAS) with the Australian Taxation Office (ATO)the business should contact Service NSW.
Where a business operates through a trust structure, the business will be required to provide additional information to demonstrate that an aggregated annual turnover of $75,000 or more is derived through the trust, as opposed to a business linked to a trust.
How do I determine if my business has aggregated annual turnover of between $75,000 and $50 million?
Aggregated Annual Turnover is calculated by applying the ATO’s ‘income assessment concept’ when assessing whether a business had ‘national aggregated annual turnover’ between $75,000 and $50 million (inclusive). This includes the business’s turnover and the Australian turnover of its connected entities and affiliates but does not include turnover of non-Australian connected entities and affiliates.
A small Australian subsidiary of a large multinational group may therefore be eligible for the Grant.
Decline in Turnover Test – What is turnover? Do I use cash or accruals? Is it NSW turnover or national turnover of the business?
When calculating the decline in turnover, the Guidelines state that the ATO’s GST concept should be applied when assessing whether a business has experienced a 30% or more decline in national turnover. Therefore, businesses should use whichever accounting method is used when preparing their BASs – i.e. if they prepare their BAS on a cash basis, then they should calculate the decline in turnover using turnover calculated on a cash basis.
The decline in turnover is calculated on all turnover of the business (i.e. national turnover) and not just NSW turnover.
No guidance has been provided on whether government grants are included in the turnover for not-for-profit businesses.
Which employees are included in the employee headcount?
Employee headcount is the number of persons who are employed in NSW who are permanent (full-time or part-time),or have been employed by the business on a casual basis for more than 12 months (long term casuals).
What is meant by maintaining employee headcount?
Maintaining employee headcount requires maintenance of the employer-employee relationship consistent with employment law (speak to your legal adviser if you have questions on the status of your employees). Employers will, however, remain eligible if employees voluntarily resign.
How is ‘total annual Australian wages’ calculated?
To calculate ‘total annual Australian wages’, businesses already grouped by Revenue NSW should apply these rules. Businesses not already grouped should apply the ownership grouping provisions set out in the New South Wales Payroll Tax Act. Please contact your William Buck advisor if you have questions regarding payroll tax grouping.
Can my business receive the 2021 COVID-19 Grant and I receive the Commonwealth COVID-19 Disaster Payment?
A business cannot receive this Grant if it is a non-employing business and persons associated with the business, and who derive income from it, have applied for (or are receiving) the Commonwealth COVID-19 Disaster Payment.
If the business is an employing business, the business may receive this Grant and employees may receive the Commonwealth COVID-19 Disaster Payment provided all eligibility criteria are met for both schemes.
Is the Grant assessable to the Business?
The 2021 COVID-19 Business Grant is tax free for income tax purposes.