Nothing like a change in the eligibility for stimulus money being sent out on a Friday afternoon to ruin your weekend. We were notified of the need to retest JobSaver eligibility for the fortnight 30 August – 11 September on Friday the 10 September. The phone calls started, the details were sketchy, yet if you wanted to get this fortnight’s payment you needed to retest now.
Taking a deep breath and uttering a few swear words, I realised there was no point looking at this until Monday as we had not reached the end of the fortnight on Friday. Maybe some more details would come out over the weekend.
Low and behold, I log in to look at the criteria for retesting and it has changed once again. We now need to retest for the fortnight 13 September – 26 September. While this is a very welcome backflip by the NSW Government, it really makes you wonder who is making the decisions and on what basis.
This change makes significantly more sense. Jobsaver was designed to cover businesses during the lockdown period. Parts of regional NSW have now come out of lockdown, so there is a requirement to retest to be eligible. This really should be based on the region you live in. It is ludicrous that the NSW Government expect businesses in Sydney who have been locked down for over 12 weeks, with no real end in sight, to have to retest. But retest they will – unless the rules change again this week. Nothing surprises me anymore.
Essentially, despite getting the notification in your inbox asking you to declare that you continue to meet the eligibility criteria, I ask you not to make that declaration yet. Today is 13th September. You will not be able to make this declaration until 26th September.
The declaration is twofold. Firstly, you need to declare that you have maintained the staffing levels (at least maintained the employment relationship) that you initially agreed to. Secondly, you need to declare that you are still experiencing a 30% decline.
The catcher on this – it must be a comparison to the same period that you originally compared to. If you compared to 2019, then compare to 2019, if you compared to 2020 or 12 June 2021-25 June 2021 then you need to compare to those periods. You can’t switch to the best period. Your comparison should also be on the basis that you report your BAS, either Cash or Accrual.
Below are a few common questions or things you need to know that have been asked over the past few weeks.
- Can I still get the COVID-19 Business Grant as well as JobSaver?
The COVID-19 Business Grant was designed to cover the first 3 weeks of Sydney lockdown. Many regional businesses or Tradies will not qualify for the Business Grant. JobSaver was designed to take over after those first 3 weeks. So, while you should qualify for Jobsaver if you got the Business Grant, you don’t necessarily qualify for the Business Grant if you qualify for Jobsaver. You only qualify for the Business Grant if you can demonstrate the decline in turnover between 26 June – 17 July. If your decline in turnover is after that date you are ineligible for the Business Grant and can only get JobSaver
- Do I have to pay Jobsaver to my staff?
No, despite the name Jobsaver is for the business, not for wages. You can use it to help pay wages but you do not need to pass this on to your staff. If your staff are working reduced hours or have been stood down you need to direct them to Services Australia for the Disaster Payment.
The reference to saving jobs is because you need to declare that you will maintain the employment relationship. It does not mean the funds need to be paid to your staff. You can stand your staff down if you don’t have work for them. Standing down staff does not end the employment relationship.
- How do I record this in my accounts?
Jobsaver needs to be paid to the business, not to you personally. It is what we call NANE (non assessable, non exempt) income. While you don’t pay tax on this, you still need to show it as income in your business accounts.
I suggest you set up a new income account called NSW JobSaver Payment and record the funds there. There is no GST on this income. If you have received the NSW Business Grant set up a separate income account for this, again free from GST.
- Deductions for expenses incurred in earning NANE income
The ATO have updated their guidance about the various government grants that are non assessable. They have advised that any expenses incurred regarding the application process are not tax deductible.
If your accountant or bookkeeper has proportioned their invoice to include the application for the grants you need to proportion your tax deduction accordingly. However, if the expense is incidental to expenses that would normally be incurred in carrying on your business you can claim a deduction for the whole expense. The wording of invoices will be important in determining this.
Stay tuned. The rollercoaster has not come to a halt as yet. I am sure there will be more twists and turns are we continue this ride. It certainly makes it difficult to predict too far into the future.