NSW’s 2021 lockdown – support packages amended

Maximum entitlements available

Businesses that qualify for either the Small Business or Hospitality and Tourism Grant can receive:

• $10,000 for a decline in turnover of 70%, or more
• $7,000 for a decline in turnover of 50%, or more
• $5,000 for a decline in turnover of 30%, or more

Eligibility criteria

The grants are not restricted to businesses within the lockdown area of Greater Sydney. Rather, regional NSW businesses can apply if they have been impacted by the restrictions, especially tourism and hospitality businesses given school holidays are an important trading period.

Small businesses and not-for-profits

Small businesses and not-for-profits will be eligible if they:

• Have fewer than 20 FTE (including non-employing businesses)
• Have an Australian Business Number (ABN) registered in NSW or can demonstrate they are physically located and primarily operating in NSW. Only one grant is available for a single ABN
• Have total Australian annual wages below the NSW Government 2020-2021 payroll tax threshold of $1,200,000 as at 1 July 2020
• Have an annual turnover of more than $75,000 as at 1 June 2021
• Have not applied for, or received, the Hospitality and Tourism COVID-19 Support Grant
• Have business costs for which there is no other government support available.

Tourism and hospitality businesses

Tourism and hospitality businesses will be eligible if they:

• Have an ANZSIC code that is classified as a tourism or hospitality business
• Have an Australian Business Number (ABN) registered in NSW or can demonstrate they are physically located and primarily operating in NSW. Only one grant is available for a single ABN
• Have total annual Australian wages below $10 million as at 1 July 2020
• Have an annual turnover of more than $75,000 as at 1 June 2021
• Have not applied for, or received, a 2021 Small Business COVID-19 Support Grant
• Have business costs for which there is no other government support available

This eligibility criteria may be relaxed even further especially if the lock down is extended.

What can the grants be used for?

Grant funds can be used for business expenses for which no other government support is available, for example: 

• Meeting business costs, including utilities, wages and rent 
• Financial, legal or other advice to support business continuity planning 
• Marketing and communications activities to develop the business
• The cost of perishable goods that can no longer be used
• Other activities to support the operation of the business

How to apply?

Applications for grants must be made through Service NSW. The online application form is not yet available on the Services NSW website but will be later this month.  It is likely that most claimants will not receive their grants until after they have paid the claimable expenses. Thus, while the reimbursement of expenses will be welcomed, the objective of alleviating cash flow constraints may not be achieved.  There is no deadline for lodging applications at this stage and we suspect claimants will have until at least 31 August 2021.

To apply, businesses will need to compare their turnover over a minimum two-week period after lockdown commenced, to a minimum two-week period in June and/or July 2019.

Businesses that were not operating in June/July 2019 may still be able to apply for the grants. These businesses should contact Service NSW to discuss their application.

Example

In June to July 2019, the Precipice Café’s takings were at least $10,000 each week except for the first fortnight in July where school holidays resulted in trading falling to $8,000 per week.

In the first week of the 2021 lockdown, the Café’s takings were $5,000.  That dropped to $3,000 for each of the second and third weeks as both the school holidays and the severity of the lockdown took effect.

When exploring its eligibility for the grant, the Café compared takings during any two weeks in June 2019 (at least $20,000) with the total takings in the second and third weeks in the 2021 Lockdown ($6,000).  The fall in turnover was at least 70% hence the Café was entitled to the maximum $10,000 grant. 

To claim that maximum amount, the Café compiled a list of its eligible expenses during the three weeks of the lockdown period, including:

• Rent - $3,000 ($1,000/week)
• Wages - $6,600 ($2,200/week)
• Utilities - $300 ($100/week)
• Disposal of unsaleable pastries on hand at the start of the lockdown - $200
• Various COVID-19 related costs (masks, sanitizer, signs, changes to website) - $100

As these total costs ($10,200) exceeded the maximum applicable grant, the Café applied online for a $10,000 grant.

Other Business Support

These two grants are in addition to existing business support programs such as Dine & Discover NSW.  That program has been extended to 31 August 2021 to give people across NSW the time to use their Dine & Discover NSW Vouchers and support local businesses once restrictions ease.

Should you have any questions, please contact your usual Mazars advisor, the author, or if you require assistance with claims or want to know more, please contact your local office below.

Author: Stephen Baxter

Published: 08/07/2021

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