07. Business Matters

COVID-19 Business Support

By Brent Szalay FCPA, Managing Director, SEIVA.

Regional Victoria is now opening up, with Metropolitan Melbourne showing positive steps to keep it on track to achieve a ‘COVID normal’ in late November. This comes as a breath of fresh air in what has been a long and hard lockdown.

We can see the light at the end of the tunnel! What’s more, there’s extra support to get your business there!

Regional Victoria is now opening up, with Metropolitan Melbourne showing positive steps to keep it on track to achieve a ‘COVID normal’ in late November. This comes as a breath of fresh air in what has been a long and hard lockdown.

To help you make it to the finish line, we’ve summarised some of the additional support that may be available to you in the coming months.

JobKeeper Extension

JobKeeper is a wage subsidy to assist businesses to retain the relationship with their employees during this COVID-19 pandemic. For your business to be eligible, you must experience a 30 per cent downturn in turnover in a particular time period compared to a relevant comparison period.

At the end of September, JobKeeper, in its original form, ended. However, you might be able to access the JobKeeper extension!

The JobKeeper extension sees an expansion of the program through to March 2020, with some rule alterations for the December and March business quarters.

To be eligible for December quarter: you must have had a revenue downturn of 30 per cent in your September quarter.

To be eligible for March quarter: you must have a revenue downturn of 30 per cent in your December quarter.

Unlike the original JobKeeper program tests, your turnover for the JobKeeper Extension is calculated as your current GST turnover (actual GST turnover for the test period), compared to your GST turnover in a respective comparison period (usually the same period last year). This means you must use the same calculation method as you use to report for GST on your BAS (i.e. Cash or Accruals). In most cases, this will mean your test amounts will match the total sales label on your BASs. There may be some alternative tests you can use to determine eligibility.

It’s vital for your cashflow to understand if you’re eligible for the extension as soon as possible! Make sure you’ve checked your eligibility.

Remember, you may have had employees eligible at 1 March 2020 and more employees eligible at 1 July 2020!

Another update to JobKeeper 2.0 is a reduction in payment amounts, which are tied to hours worked per week during a test period. This table provides a visual explanation:

Dec Quarter March Quarter

Worked < = 20 hours per week

$750 per fortnight

$650 per fortnight

Worked > 20 hours per week

$1,200 per fortnight

$1,000 per fortnight

Some important things to note about calculating the hours worked:

The hours are calculated as hours worked (including paid leave and public holidays) in the 28 days immediately prior to the end of the last pay cycle before their eligibility measurement date (1 March 2020 or 1 July 2020), divided by four (4);

Business participants’ hours involved in the business are calculated across the month of February, with the total hours being divided by four (4) to calculate the weekly average;

There are some special rules that apply for monthly payrolls where the hours-worked requirement may need a higher number of hours to access the higher rate. We suggest checking this with your accountant; and

In some instances, a different test period may be used. We suggest you work through these provisions with your accountant.

Once the payment rate is determined, you must notify the ATO and then notify employees in writing within seven (7) days.

Business Support Fund

Good news! The Business Support Fund has been extended for a third round. Under the third round, eligible businesses will be able to access grants of $10,000 up to $20,000, depending on the size of their payrolls.

To be eligible for the Business Support Fund, businesses must meet the following criteria:

Operate a business in Victoria; Employ people; Be registered for GST; Have payroll of less than $10,000,000; Hold an ABN; Be registered for GST; This includes sole traders that meet the above criteria; Be registered for JobKeeper; and Be registered with WorkSafe.

Importantly, under this third-round, businesses with larger

Your grant amount will depend on the size of your payroll. The table below summarises this scale:

Annual Payroll Size

Less than $650,000 $650,000 up to $3,000,000 $3,000,000 up to $10,000,000

Grant Amount

$10,000 $15,000 $20,000

Sole Trader Support

payrolls are now able access this round of support.

The Victorian Government is establishing a fund to support sole trader businesses who may not have been able to access other support measures.

This measure will provide $3,000 grants to eligible sole traders who hold a commercial lease and that lease is in their name.

Further eligibility criteria yet to be announced.

Knock Knock, it’s the Tax Man

The Victorian Government and the Federal Government are in negotiations as to whether the Victorian stimulus measures will be taxable income in the 2021 Financial Year, in order to provide further relief to businesses come tax time.

JobKeeper continues to be ‘ordinary income’ for businesses, meaning that tax will be payable on the amounts received. The good news is the wages paid to employees under JobKeeper offset this income as a deduction.

If you would like some assistance, we are here to help. Please reach out to us at admin@seiva.com.au

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