NSW Covid-19 Relief for Business – technical analysis

by | Jul 30, 2021

Yesterday, 28 July, the NSW Government announced additional assistance measures for businesses with employees in NSW, in response to the Greater Sydney Area Covid-19 “Delta variant” lockdown.

Below is a summary of the main features, but you can access our detailed report on the complex requirements and how your business can navigate the eligibility tests HERE.

Business Grants and JobSaver Payments

From the commencement of lockdown on 26 June 2021 to 17 July 2021, the support is the “2021 Covid-19 Business Grant”.  From 18 July, the assistance is the “Covid-19 JobSaver Payment” on 18 July 2021 (Grant and JobSaver, respectively).

These measure are rapid responses to a serious situation, without the benefit of extensive drafting efforts and community consultation.  Consequently, they have some shortcomings in covering all relevant businesses, and drafting and definitional issues that inevitably lead to ambiguity and confusion.

Types of Benefit

Qualifying applicants may be eligible businesses or not-for-profit organisations (applicants).They may have employees (employing businesses} or no employees (non-employing businesses), but the latter are limited to a fixed payment of $1,000 per week.

The Grant is a single payment of:

  • $7500 (tier one) for declines in turnover of 30% or more;
  • $10,500 (tier two) for declines in turnover of 50% or more ; or
  • $15,000 (tier iii) for declines of 70% or more

covering the period from 26 June 2021 to 17 July 2021.

JobSaver, operating from 18 July, is a fortnightly payment equivalent to the value of 40% of weekly payroll for employees who usually work, or were based, in NSW.  The minimum payment is $1500 per week and the maximum is $100,000 per week.


To be eligible for either benefit, applicants must satisfy the following

  • Carrying on Business in NSW on 1 June 2021 test;
  • Aggregated annual turnover within range;
  • Decline in turnover test; and
  • Maintaining headcount

For the Grant a maximum total annual Australian wages limit also applies.

Carrying on Business in NSW on 1 June 2021 Test

Grant the applicant must have had an ABN and been operating in NSW on 1 June 2021.
JobSaver an applicant must either have had an ABN registered in NSW as at 1 June 2021, or be able to demonstrate it was operating in NSW as at 1 June 2021 provided it had an ABN registered elsewhere in Australia as at that date.

Our report explains recent case law precedent affecting the requirement to have an ABN at a certain date.

Wages Limit (Grant applicants only)

The applicant must have total annual Australian wages of $10 million or less at 1 July 2021.

Turnover Limit

Grant the employer entity (but see below) must have an “aggregated annual turnover” of between $75,000 and $50 million for the year ended 30 June 2020.
JobSaver requires a “national Aggregated Annual Turnover” of between $75,000 and $250 million for the year ended 30 June 2020.

Our report identifies that “aggregated annual turnover” and “national Aggregated Annual Turnover” are defined differently and explains both definitions. Our report notes the relevance of annual turnovers of any connected entity and affiliated entity of the applicant (which include entities where only common 40% control interest), and of businesses that do not operate in common. The report also raises issues with respect to the effect of turnovers of foreign branches and of export sales revenues of domestic entities.

Decline in Turnover

Grant provides for three different amounts, for declines in turnover of 30%, 50% or 70%, measured over a two week period from 26 June to 17 July compared to the same two week period in 2019.
Job Saver the recipient must have experienced the Required Decline in Turnover meaning “a decline in Turnover of 30 per cent or more due to the Public Health Order over a minimum two-week period from 26 June 2021 to 30 July 2021 compared to the same period in 2019.”

The decline in turnover tests are different for each of these reliefs.

Importantly, the JobSaver decline in turnover calculation has a ‘causation’ element – it is only the decline “due to the Public Health Order”. Our report explains the differences in the tests and the impact of the causation element.

Maintaining Headcount Requirement

Both the Grant and JobSaver require the applicant to maintain its employee headcount as at 13 July 2021 for the period for which the applicant receives payments.

Our report notes the relevance of the definition of employee here viz a viz independent contractors, for both the maintenance of headcount and the payroll level. It notes the focus on numbers rather than individual employee relationships and considers the impact of reductions of hours and changes to the permanent, part-time and casual mix.

Many other issues

Our report addresses many other questions. For example:

  • are capital gains included? Or so-called statutory income, such as the proceeds of sales of depreciable assets?
  • Does the turnover of not-for-profits include donations?
  • Are there alternative tests or provisions for abnormal trading conditions, businesses not operational two years ago, or businesses who have increased revenues through acquisition during the intervening period.
  • Businesses (and thus employees) that suffer 30% plus turnover declines in NSW but not a national decline?
  • Is turnover computed on a cash basis or accruals basis?
  • In a group that satisfies the turnover limit, can an employer entity suffer a 30% decline in turnover based on internal trading conditions

You can obtain a copy of our report HERE

Or, if you have a question or would like to discuss your eligibility for relief, please contact us:

+612 8599 8320






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