26 August | Updates including service entity rules and expansion to large tourism, hospitality and recreation businesses
Details on the latest changes to the JobSaver Payment scheme are provided below. Some of these changes include:
- Rules for group employing entities (i.e. Service entities) similar to JobKeeper
- Date when entities will first become eligible for the JobSaver payment
- Expansion of the JobSaver payment to large tourism, hospitality and recreation businesses
12 August | More detail and changed guidance released for JobSaver on the Service NSW website
Updates have been made to the Service NSW website for the JobSaver payment. Some of these changes include:
- Additional comparison periods provided
- Defining aggregated annual turnover to include worldwide income of the business, its connected entities and affiliates and not just national income
- Clarification on additional documentation requirements
- Allowing accountants to apply on behalf of their clients.
Full details on JobSaver incorporating all the updates are provided below.
Further information on the eligibility requirements and application process can be found here.
Applications for the COVID-19 JobSaver payment opened on 26 July 2021 and JobSaver payments took effect from 18 July 2021. An expansion of the scheme was then announced on 28 July 2021, increasing the:
- maximum amount eligible businesses could receive to $100,000, and
- maximum national aggregated turnover threshold to $250 million (inclusive).
The JobSaver scheme has been further expanded to include large tourism, hospitality and recreation businesses with aggregated turnover between $250 million and $1 billion with higher maximum weekly payment amounts (‘JobSaver Extension’). Group employing entity rules have also been introduced.
Service NSW has made a number of updates to the Guidelines and Terms and Conditions on its website including providing additional comparison periods. As a result, more businesses may now satisfy the decline in turnover test.
Under the scheme, eligible business and not for profits will receive 40 per cent of their weekly payroll (at a minimum of $1,500 and a maximum of $100,000 per week) provided that they maintain their NSW employee headcount.
The NSW Government has provided further detail on the COVID-19 JobSaver payment including greater clarity around the eligibility requirements and the documentation required for application.
Businesses (including sole traders) and not-for-profits will be eligible for the COVID-19 JobSaver payment 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 on 1 June 2021.
- have an aggregated annual turnover of between $75,000 and $250 million (inclusive) for the year ended 30 June 2020.
- experienced a decline in turnover of 30% or more due to the Public Health Order over a minimum 2-week period within the period of restrictions (commenced 26 June 2021), compared to
- the same period in 2019, or
- the same period in 2020, or
- the 2-week period immediately before restrictions commenced (12 June to 25 June 2021).
- for employing businesses, maintain their employee headcount from 13 July 2021 if they receive payments from the commencement of JobSaver, or otherwise from the day immediately prior to the fortnight they first experienced the decline in turnover, while they continue to receive JobSaver payments (businesses that do not maintain the declared headcount must notify Service NSW).
- for non-employing businesses, the business receiving payments must be the primary income source for the associated person. Individuals with more than one non-employing business may only claim payments for one business. Non-employing businesses included in the aggregated turnover of an employing business are ineligible to apply.
Businesses that are not eligible
A business will not be eligible if any of the following criteria apply:
- for a particular period, the entity is a non-employing business and individuals associated with the business and deriving income from the business, have received a Commonwealth COVID-19 Disaster Payment for the same period.
- 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).
- the business is a Table A provider within the meaning of the Higher Education Support Act 2003.
- the business registered its Australian Business Number (ABN) after 1 June 2021, or a business that has backdated its ABN to before 1 June 2021 for the purposes of eligibility.
Eligible businesses will receive the equivalent to 40% of Weekly Payroll for work performed in New South Wales.
- The minimum payment will be $1,500 per week, and
- The maximum payment will be $100,000 per week.
A Non-employing Business can apply for a payment of $1,000 per week.
Payments will be made fortnightly in arrears. Businesses applying for JobSaver will need to nominate the 2-week period in which they first experienced the required decline in turnover on or after the commencement of JobSaver on 18 July 2021. Once approved, payments will be backdated and begin from that nominated fortnight..
How is Weekly Payroll calculated
For the purposes of JobSaver Weekly Payroll can be determined as follows:
- Identify the amount disclosed at W1 in the most recent Business Activity Statement (BAS) lodged with the Australian Taxation Office (ATO) prior to 26 June 2021 for the 2020-21 financial year
- Exclude all amounts attributable to employees who do not usually work, or were not based, in NSW during the relevant BAS period. Also exclude amounts from W1 that have been withheld on behalf of contractors under voluntary agreements.
- This amount should be divided by the number of days in the BAS period and multiplied by 7. This will give the Weekly Payroll amount.
Item W1 in the BAS includes amounts of wages, salaries and other payments that are subject to PAYG withholding tax (as defined by the ATO). It does not include payments such as superannuation contributions, amounts subject to salary sacrifice, interest or dividends.
Businesses that do not submit a BAS or have no W1 amount should use the ATO definition of W1 to calculate the total wages, salaries and other amounts, excluding amounts withheld on behalf of contractors, for employees who usually worked, or were based, in NSW during the month of April or May 2021. That amount should be divided by the number of days in the month and multiplied by 7. This will give the Weekly Payroll amount.
What you need to apply
To apply, businesses on the highly impacted industries list applying for a maximum weekly payment of $10,000 or less will need to:
- declare that you meet the decline in turnover eligibility criteria
- declare your employee headcount at 13 July 2021 if receiving payments from the commencement of JobSaver, or from the day immediately prior to the fortnight your business first experienced the required decline in turnover
- if you have employees, declare that you will maintain this employee headcount for the period for which you will receive JobSaver payments. Service NSW must be notified if the headcount declines over the payment period
- if you do not have employees, declare that the business is the primary income source for the owner of the business
- submit an Australian income tax return, Notice of Assessment or other documentation demonstrating the business had a national aggregated annual turnover between $75,000 and $250 million (inclusive) for the year ended 30 June 2020
- provide details of your qualified accountant, registered tax agent or registered BAS agent
- provide evidence of weekly payroll
- lodge other supporting documents as required to demonstrate you meet the eligibility criteria.
Businesses not on the highly impacted industries list or applying for a maximum weekly payment of more than $10,000, will need to provide the information above, in addition to a letter from your qualified accountant, registered tax agent or registered BAS agent as evidence of their decline in turnover.
How to Apply for the JobSaver Payment
Applications for the JobSaver payment are made through the Service NSW website and are open until 11:59pm on 18 October 2021.
- Check you meet the eligibility criteria.
- Have your documentation and evidenceready 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 to 7 business days from the approval date.
Accountants may now apply on behalf of their clients. They will need to provide a letter of authority from the business to show that they are authorised to act on behalf of their client.
In limited circumstances, there are alternative rules for businesses that do not meet the standard eligibility criteria.
If one of the following circumstances applies, the business may be able to demonstrate that it satisfies the aggregated annual turnover criteria through alternative ways:
- Business commenced after June 2019 but on or before 1 June 2021 (e.g. new businesses)
- A business acquisition, disposal, or business restructure occurred that impacted the business’ turnover
- A sole trader or small partnership impacted by sickness, injury or leave.
Where one of these applies, a shorter period can be accepted to demonstrate the minimum $75,000 aggregated annual turnover has been derived provided that shorter period is representative of the “normal operating environment” of the business. The turnover for this shorter period will be annualised to get an equivalent annual turnover figure for the business.
Businesses should generally use a minimum 3-month period to demonstrate turnover, and should provide:
- a BAS for at least one quarter (or 3-monthly BAS), or
- an Australian Tax Return annotated to show when the business commenced during the financial year.
Where a business does not have the evidence outlined above (e.g. because the business started between 1 January and 1 June 2021), the following may be provided as evidence of annual turnover:
- letter from a qualified accountant, registered tax agent or registered BAS agent; or
- business bank account statement for a minimum 3-month period (separate from any personal accounts), or the period for which the business has been operating if less than 3 months
Importantly, businesses that fall under one of those three alternative circumstances will still have to satisfy the decline in turnover using the standard comparison periods.
For businesses impacted by natural disasters, they will have to provide the same information to demonstrate they meet the aggregated annual turnover requirement. However, they may also compare their turnover to the same period in 2018 in addition to the standard comparison periods.
Where a business’s ABN is not registered in NSW but the business was operating in NSW as at 1 June 2021, it will need to provide additional information. This additional information should be in the form of commercial rates notices or lease agreements. Where none of these are available, the Service NSW website lists some alternative documentation that they may accept.
Where a business operates through a trust structure, the business will be required to provide a letter from an independent accountant that demonstrates that an aggregated annual turnover of $75,000 or more is derived through the trust, as opposed to a business linked to a trust.
Group Employing Entities
Similar to the JobKeeper scheme, group employing entities such as service entities that have the principal function of supplying employee labour to other members of the group may use an alternative decline in turnover test to assess their eligibility.
Businesses can only use this alternative test when they meet the requirements specified in the JobKeeper Rules which are then modified to apply to the JobSaver scheme. In broad terms, the businesses need to be entities in a consolidated, consolidatable or GST group to be eligible. These requirements are complex so we recommend you speak to your William Buck advisor should you think these are applicable to your business.
Once you meet these requirements, turnover is defined as the sum of the current GST turnovers of all the group members to which the business supplied employee labour services during the defined period of restrictions and the relevant comparison period.
Expansion to Large Tourism, Hospitality and Recreation Businesses – JobSaver Extension
In recognising the significant impact of the current lockdown, the JobSaver payment has been extended to larger businesses in the hospitality, tourism and recreation sectors.
Eligible businesses will receive the equivalent of 40% of weekly payroll for work performed in New South Wales.
- The maximum payment will be $300,000 per week for businesses with an aggregated annual turnover of more than $250 million and up to $500 million, and
- The maximum payment will be $500,000 per week for businesses with an annual aggregated turnover of more than $500 million and up to $1 billion.
To be eligible for this, your business should:
- have an ABN registered in NSW or can demonstrate that they are physically located and primarily operating in NSW on 1 June 2021.
- have an aggregated annual turnover of more than $250 million and up to $1 billion for the year ended 30 June 2020.
- experienced a decline in turnover due to the Public Health Order of:
- 50% for businesses with aggregated annual turnover of more than $250 million and up to $500 million; or
- 70% for businesses with aggregated annual turnover of more than $500 million and up to $1 billion
- Demonstrate the relevant decline turnover over a minimum one-month period within the lockdown (commenced 26 June), compared to the same period in 2019 or another agreed period.
- Maintain your employee headcount from the day immediately prior to the month you first experienced the required decline in turnover while you continue to receive JobSaver payments.
- be a tourism, hospitality or recreation business – see Attachment D of the JobSaver payment guidelines for the full list of eligible industries
The Service NSW Guidelines also set out the evidence required as part of the application process for these businesses and the rules for businesses that are part of a group structure.
What evidence is required to prove weekly Payroll? What if my business doesn’t lodge BASs or is not required to complete W1?
Evidence of weekly payroll is one of the following:
- for businesses that submit a BAS with a W1 amount (wages and salaries) recorded: their most recent BAS that was submitted to the ATO prior to 26 June 2021 within the 2020-21 financial year.
- for businesses that submit a BAS without a W1 amount (wages and salaries) recorded: their 2019-20 NSW payroll tax reconciliation return and copies of the payroll report/s filed with the ATO using single touch payroll (STP) which include information used in the calculation of Weekly Payroll. The STP report should include the effective date, branch ID, Submission ID, Event Type, Gross payments and PAYGW.
- for businesses that do not submit a BAS: copies of the payroll report/s filed with the ATO using STP which include information used in the calculation of Weekly Payroll. The STP report should include the effective date, branch ID, Submission ID, Event Type, Gross payments and PAYGW.
- For businesses that do not submit a BAS or payroll reports using STP: Contact Service NSW to discuss alternative evidence of wages and salaries.
How do I determine if my business has aggregated annual turnover of between $75,000 and $250 million? Or up to $1 billion for the JobSaver Extension?
Aggregated Annual Turnover means aggregated turnover as defined in s. 328-115 of the Income Tax Assessment Act 1997 (Cth) (“ITAA 97”). Therefore it will include the worldwide turnover of the entity plus the worldwide turnover of its connected entities and affiliates – including non-Australian entities when assessing whether a business had aggregated annual turnover between $75,000 and $250 million (inclusive) or up to $1 billion for large tourism, hospitality and recreation businesses.
This means, for example, that a small Australian subsidiary of a large multinational group may not be eligible if the worldwide aggregated annual turnover was greater than $250 million (or $1 billion for large tourism, hospitality and recreation businesses) for the year ended 30 June 2020.
Note this is a change in the aggregated annual turnover condition by Service NSW. Previously the Guidelines and Terms & Conditions on the Service NSW website specified it was “national Aggregated Annual Turnover”. Further, information dated 28 July 2021 which was provided to accounting bodies by the NSW Government specified that:
“Aggregated annual turnover means the annual Australian turnover of your business as well as the annual Australian turnover of any business that is “connected with you” or any business that is your “affiliate” for the year ended 30 June 2020.”
No guidance has been provided by Service NSW if businesses have already applied based on the original Terms & Conditions, but going forward applicants will need to follow the updated guidelines.
Annual turnover includes all ordinary income you earned in the ordinary course of running your business. It includes:
- trading stock sales,
- fees for services you provide,
- interest from business bank accounts and
- amounts received to replace business income.
The following are not included in aggregated annual turnover:
- the GST you charge on transactions,
- amounts borrowed,
- proceeds from selling business capital assets,
- certain insurance proceeds and
- JobKeeper payments.
Decline in Turnover Test – What is turnover? Do I use cash or accruals? Is it NSW turnover or national turnover of the business?
An entity satisfies the decline in turnover test if the entity’s current GST turnover for a minimum 2-week period from 26 June to 28 August 2021 declines by at least 30% compared to the relevant comparison period.
Current GST turnover has the meaning given by the Income Tax Assessment Act 1997 (Cth) and the A New Tax System (Goods and Services Tax) Act 1999 (Cth).
For businesses that are part of a GST group, their ‘GST turnover’ will need to be disaggregated from the GST turnover reported in the group’s BAS, including the re-instatement of intra-group transactions.
A business must use the accounting method they use when preparing their BAS – 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. It should be calculated based on a minimum 2 consecutive weeks; note the period used can start midweek.
Service NSW have updated their guidance to state that the JobKeeper modifications to include gifts and exclude grants do not apply for not-for-profit organisations when calculating aggregated annual turnover or decline in turnover.
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? Are employees who have been stood down included in headcount?
Maintaining employee headcount means the employer will not take active steps to end the employment relationship with their employees. Employees who have been stood down under the Fair Work Act 2009 or take leave without pay are considered employees for the purpose of headcount.
Businesses will remain eligible if their employee headcount declines for reasons outside the control of the employer, for example if employees voluntarily resign or death of an employee.
Can my business receive the COVID-19 JobSaver payment if I receive the Commonwealth COVID-19 Disaster Payment?
A business cannot receive the JobSaver payment for a period if it is a non-employing business and persons associated with the business, and who derive income from it, have received the Commonwealth COVID-19 Disaster Payment for the same period.
If the business is an employing business, the business may receive the JobSaver payment and employees may receive the Commonwealth COVID-19 Disaster Payment provided all eligibility criteria are met for each scheme.
Can my business receive the COVID-19 JobSaver payment if it got the 2021 COVID-19 business grant?
Businesses that have applied and are eligible for the 2021 COVID-19 business grant will generally be automatically eligible for JobSaver. These businesses will have to provide further information on their employee headcount and payroll.
Can my business receive the COVID-19 JobSaver payment if it did not get the 2021 COVID-19 business grant?
The JobSaver scheme has expanded criteria compared to the 2021 COVID-19 Business Grant. Therefore businesses that are not eligible for the 2021 COVID-19 business grant may still be eligible for JobSaver provided they meet the criteria outlined above. These businesses will be required to complete an application.
Are there any ongoing reporting requirements to receive the fortnightly payments?
Once deemed eligible, businesses will receive automatic fortnightly payments. Businesses will not need to re-apply.
However, if their headcount has declined due to circumstances not outside their control, the business will need to notify Service NSW. They will no longer be eligible for JobSaver.
My headcount has declined. What do I do?
If the reduction in employee headcount was as a result of circumstances outside the control of the employer (such as voluntary resignations, death of an employee), then you will not be taken as having had a reduction in employee headcount on 13 July (or later date if not receiving JobSaver payments from the scheme’s commencement on 18 July 2021). You will still be eligible to keep receiving JobSaver.
If the business reduced its employee headcount due to circumstances within the employer’s control, it will need to notify Service NSW. The business will no longer be eligible for JobSaver.
What is a non-employing business?
Non-employing Business means a business that does not have employees. This may include a range of entity types, such as non-employing sole traders, partnerships, trusts or any other businesses without employees.
What additional information do Not-For-Profit organisations (NFPs) need to provide?
If you are an NFP you will need to provide all of the following:
- a copy of your constitution (or a governing document such as articles of association)
- minutes and resolutions from AGM (bi-annual meetings) for the previous 3 years
- audited financial statements for the previous 3 years.
Is JobSaver assessable to the Business?
The COVID-19 JobSaver Payment is tax free for income tax purposes if the following criteria are met:
- the payment was received by the entity in the 2021–22 financial year;
- the entity carries on a business; and
- the entity has an aggregated turnover of less than $50 million for the year in which the entity receives the payment.
Businesses receiving JobSaver with an aggregated turnover of $50m or more in 2021–22 will not be able to treat the JobSaver payments received as tax-free income.