Are your clients eligible for the COVID-19 Micro-Business Grant?
Your micro-business clients in NSW may be able to apply for up to $1500 a fortnight to assist in covering business costs.
- Micro-businesses operating in NSW may be eligible for a payment of up to A$1500 a fortnight if they are not receiving other support.
- A letter from a qualified accountant can be used in the application.
- Applications opened on 26 July 2021 and can be made through the Service NSW website.
If you have a micro-business, sole trader or not-for-profit client affected by the current Greater Sydney COVID-19 lockdown, let them know about the COVID-19 Micro-Business Grant. It may assist if they’re not eligible for other payments.
Service NSW has provided the following eligibility criteria for the COVID-19 Micro-Business Grant. Applications close on 18 October 2021.
Who can apply for a 2021 COVID-19 Micro-Business Grant
Businesses and not-for-profit organisations impacted by the Public Health Order will be eligible if:
- they have an Australian Business Number (ABN) as at 1 June 2021 registered in, or can demonstrate they are primarily operating in, New South Wales
- they had a national aggregated annual turnover of more than A$30,000 and less than A$75,000 for the year ended 30 June 2020
- they experienced a decline in turnover of 30% or more due to the Public Health Order over a minimum two-week period within the Greater Sydney lockdown (commenced 26 June and due to end 30 July 2021) compared to the same period in 2019
- they have business costs for which there is no other government support available
- they have not applied for either the 2021 COVID-19 Business Grant, or the JobSaver scheme
- 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.
- for employing businesses, they must maintain their employee headcount on 13 July 2021 while they continue to receive grant payments (businesses that do not maintain their headcount agree to notify Service NSW)
“Maintain their 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.
The grant will be available to micro-businesses in New South Wales impacted by the Public Health Order that meet the eligibility criteria outlined.
Non-employing businesses are not eligible to apply if persons associated with the business, and who derive income from it, received a Commonwealth COVID-19 Disaster Payment.
Employees can receive Commonwealth COVID-19 Disaster Payments if their employer is receiving the grant.
Certain entities, such as those primarily earning passive income (rents, interest, or dividends) or those with an ABN registered after 1 June 2021 are not eligible for this grant.
What level of funding can a micro-business receive?
Eligible businesses (including non-employing businesses such as non-employing sole traders) and not-for-profit organisations can apply for a fortnightly payment of A$1500 to cover business expenses for the duration of the Greater Sydney lockdown.
What can the funding be used for?
The grant will help eligible micro-businesses with costs incurred from 1 June 2021. These costs may include, but are not limited to, the following expenses:
- salaries and wages
- utilities and rent
- financial, legal or other advice
- marketing and communications
- perishable goods
- other business costs.
The grant must only be used for expenses for which no other government support is available. For example, the grant cannot be used to pay government fees and charges that would be covered by the A$1500 Small Business Fees and Charges Rebate.
How do you apply for a Micro-Business Grant?
Applications will open on 26 July 2021 and close at 11:59pm on 18 October 2021. Applications are made via Service NSW website.
Once deemed eligible, businesses will receive automatic fortnightly payments. Businesses will not need to re-apply, but businesses with employees must notify Service NSW if they are not maintaining the number of employees they had on 13 July 2021.
Payments will be made in arrears with the first payment backdated to 26 June 2021.
Only one application can be submitted for a single ABN. Only one application is permitted where there are multiple businesses under a single ABN.
What information is needed for an application?
Eligible business applying for the grant are required to submit evidence they experienced a decline in turnover of 30% or more due to the Public Health Order over a minimum two-week period within the Greater Sydney lockdown (commenced 26 June and due to end 30 July 2021) compared to the same period in 2019. This will in the form of a:
- letter from a qualified accountant, registered tax agent or registered BAS agent, or
- business bank account statement (separate from any personal accounts).
They must also submit evidence they had an aggregated annual turnover of more than A$30,000 and less than A$75,000 for the year ended 30 June 2020. This can be in a form of a:
- letter from a qualified accountant, registered tax agent or registered BAS agent; or
- business activity statement (BAS); or
- business bank account statement (separate from any personal accounts); or
- Australian income tax return (or Notice of Assessment) – businesses can choose to redact their tax file number.
Non-employing businesses will need to declare the business is the primary income source for the owner of the business.
Employing businesses will need to declare they will maintain their employee headcount on 13 July for the period for which the business is receiving the grant payments and notify Service NSW if employee headcount declines over the period of the payment due to any actions of the business.
Applicants must lodge other supporting documents, as required, to demonstrate that they meet the eligibility criteria. They must also supply business bank account details for payment.
What if a business doesn’t meet these criteria?
There are several alternative circumstances that result in a business not meeting the eligibility criteria and supporting evidence. Service NSW currently outlines the below information on their website and advises businesses to contact Service NSW to discuss alternative circumstances.
Micro-businesses primarily operating in New South Wales with their ABN registered elsewhere should contact Service NSW. They may be able to apply if they can provide evidence their business was primarily operating in New South Wales on 1 June 2021.
Evidence to demonstrate this includes commercial rates notices or lease agreements. Where a rates notice or lease agreement is not available, Service NSW may accept a combination of the following:
- utility bills
- insurance papers
- supply invoices
- registration papers
- contractor licences.
Other alternative circumstances include:
- businesses not operating for the full year to 30 June 2020 (for example, new businesses)
- businesses affected by drought, bushfires or other natural disasters
- business acquisition, disposal or business restructure that has impacted the business’s turnover
- a sole trader or small partnership impacted by sickness, injury or leave.
Businesses in these circumstances should contact Service NSW to determine if an alternate comparison period, or alternative supporting evidence, can be applied.
Where a business operates through a trust structure, the applicant will be required to provide additional information to demonstrate a national aggregated annual turnover of more than A$30,000 and less than A$75,000 is derived through the trust. The entity operating the business is eligible for the grant, not other entities that are receiving passive income from the business.
Information in this article is based on details available on the Service NSW website as at 25 July 2021.
Check your clients’ eligibility criteria against the guidelines provided to ensure a business is eligible at the time of the application.
This is an edited version of an article first published on the BLG Business Advisers website.
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