2021 COVID-19 lockdown relief measures: Federal and NSW governments announce economic support packages

Practical Law ANZ Legal Update w-031-9074 (Approx. 9 pages)

2021 COVID-19 lockdown relief measures: Federal and NSW governments announce economic support packages

by Practical Law Corporate and Practical Law Commercial Real Estate

2021 COVID-19 lockdown relief measures: Federal and NSW governments announce economic support packages

The past week has seen a range of economic and financial support measures announced by both the federal government (Commonwealth Government) and the New South Wales government (NSW Government) in response to the extended lockdown due to the June 2021 outbreak of the 2019 novel coronavirus disease (COVID-19) in Sydney.

Combined support package

On Tuesday, 13 July 2021, the Commonwealth Government and NSW Government jointly announced a new combined support package for households and businesses to address the economic effects of the latest public health restrictions in effect in New South Wales (NSW) (Combined Support Package).

Under the Combined Support Package:

The existing Commonwealth COVID-19 Disaster Payment will be further expanded and increased from the fourth week of a lockdown because of a Commonwealth Government declared hotspot.
The Commonwealth and NSW will also enter into a new 50/50 cost sharing arrangement for a new business support payment for small to medium businesses, to be implemented and administered by NSW.

For the full text of the announcement, see the Commonwealth Government's media release (13 July 2021) and the NSW Government's media release (13 July 2021).

COVID-19 Disaster Payment

The COVID-19 Disaster Payment is a lump sum payment to help workers unable to earn income due to a COVID-19 state public health order, including a lockdown, hotspot or period of restricted movement, and is subject to an eligibility test.

Details of the COVID-19 Disaster Payment scheme are available at Services Australia: COVID-19 Disaster Payment.

The details of the expanded COVID-19 Disaster Payment are as follows:

From 2 August 2021, eligible workers will receive:
- $750 per week if they lose 20 hours or more of work; or
- $450 per week if they lose between 8 and less than 20 hours, or a full day of work.
The COVID-19 Disaster Payment will be available from Day 1 of any potential lockdown in the future, with claims made from Day 8 in arrears for the previous 7 days. A weekly payment will then be made for the duration of the hotspot declaration.
There will be no liquid assets test applied to eligibility for these payments and an individual does not need to run down personal annual leave.
Individuals who currently receive an income support payment will receive a weekly payment of $200, in addition to their existing payment, if they can demonstrate they have lost more than 8 hours of work and meet the other eligibility requirements for the COVID-19 Disaster Payment.

For more information, see the Prime Minister and Treasurer's joint media release.

On 29 September 2021, the Commonwealth Government announced the phase out of the COVID-19 Disaster Payment.

The details of the COVID-19 Disaster Payment phase out, in line with the National Plan to Transition Australia's COVID-19 Response (National Plan), are as follows:

In line with Phase B of the National Plan, once a state or territory reaches 70% full vaccination rate of its population (16 years and older), the automatic renewal of the COVID-19 Disaster Payments will end. Instead, individuals will need to reapply each week to confirm their eligibility.
In line with Phase C of the National Plan, once a state or territory reaches 80% full vaccination rate of its population (16 years and older), the COVID-19 Disaster Payment will step down over a period of two weeks before ending. During these two weeks, the COVID-19 Disaster Payment will be as follows:
- for the first week, $450 for individuals who have lost more than eight hours of work and $100 for individuals who receive income support; and
- for the second week, $320 for individuals who have lost more than eight hours of work and payments for individuals who receive income support will end.

For more information, see the Commonwealth Government's 29 September 2021 media release.

On 7 October 2021, New South Wales reached 70% full vaccination rate of its eligible population. As a result, and in line with Phase B of the National Plan, the last period of automatic renewal of the COVD-19 Disaster Payment was:

7 to 11 October 2021 for parts of Sydney.
3 to 9 October 2021 for Greater Sydney and other areas of New South Wales.
5 to 11 October 2021 for eligible Centrelink or Department of Veterans' Affairs payments.

For more information, see the Services Australia website.

Saving Jobs: small and medium business support payment

Additionally, under the Combined Support Package:

From the fourth week of the lockdown, the Commonwealth will fund 50% of the cost of a new small and medium business support payment to be implemented and administered by Service NSW.
The new small to medium business support payment will be available to non-employing and employing entities in NSW, including not for profits:
- with an annual turnover between $75,000 and $250 million; and
- whose turnover is 30% lower than an equivalent two-week period in 2019.
Eligible entities will receive 40% of their NSW payroll payments, at a minimum of $1,500 and a maximum of $100,000 per week.
To receive the payment, entities will be required to maintain their full-time, part-time and long-term casual staffing level as of 13 July 2021.
For non-employing businesses, such as sole traders, the payment will be set at $1,000 per week.

Businesses can register their interest and learn more from 14 July 2021 at Service NSW: COVID-19 help for businesses.

Business tax relief

The Prime Minister has also announced that:
NSW small business grants, including the new small business payments, will be made tax exempt.
Administrative relief will be offered to NSW taxpayers facing hardship, including reduced payment plans, no interest charged on late payments and varying instalments on request.
For more information, see the Prime Minister's media statement of 13 July 2021.

Further NSW support measures

On Tuesday, 13 July 2021, the NSW Government also announced a separate range of economic support measures to assist businesses and people through difficulties occasioned by the current lockdown, in conjunction with the federally funded Combined Support Package (NSW 2021 Support Package).

Government grants

The NSW 2021 Support Package includes the following grants:

An extension to the previously announced business grants program, allowing eligible businesses with Australian wages below $10 million to claim grants between $7,500 and $15,000 to cover the first three weeks of restrictions.
Up to $2 billion committed to the scheme to provide cashflow support to businesses to help them retain staff, to be delivered together with the Commonwealth.
A new grants program for micro businesses with a turnover of between $30,000 and $75,000 that have experienced a decline in turnover of 30%. Eligible businesses will be eligible for a $1,500 payment per fortnight of restrictions.
A capped grant of up to $1,500 for residential landlords not liable to pay land tax, who reduce rent for tenants.

Tax related measures

The NSW 2021 Support Package includes the following tax measures:

Payroll tax waivers of 25% for businesses with Australian wages of between $1.2 million and $10 million that have experienced a 30% decline in turnover, as well as payroll tax deferrals and interest free repayment plans.
Land tax relief equal to the value of rent reductions provided by commercial, retail and residential landlords to financially distressed tenants, up to 100% of the 2021 land tax year liability.
Deferral of gaming tax assessments for clubs until 21 December 2021 and hotels until 21 January 2022.

On Thursday 22 July 2021, the NSW government announced further payroll tax relief for business in response to the COVID-19 lockdowns. The following measures were included:

Businesses who have a payroll tax liability have the option of deferring lodgment and payment of their 2020-21 annual reconciliation until 7 October 2021.
Businesses required to lodge monthly returns will also have the option of deferring their returns due in August and September until 7 October 2021.
Businesses who defer their payments are eligible for an interest free payment plan of up to 12 months.
Businesses with wages between $1.2 million and $10 million that have experienced a 30% decline in turnover will get a 25% reduction of their 2021-22 payroll tax.

Commercial, retail and residential tenancies

The NSW 2021 Support Package includes the following relief for parties to commercial and retail leases:

Landlords will be entitled to offset up to 100% of their 2021 land tax liability equal to the value of any rent reductions provided to their tenants in financial distress.
Tenants will be protected from lockouts and evictions, and landlords may not draw down on tenant security, before the parties partake in mediation.

Similarly, parties to residential tenancies in financial distress will be entitled to the following relief:

Landlords can offset up to 100% of their 2021 land tax liability equal to the value of any rent reductions provided to their tenants in financial distress. If a landlord to a residential tenancy is not liable to pay land tax, they will instead receive a monetary grant of up to $1,500 for rent reductions provided to their tenant.
A moratorium on evictions for rent arrears will apply to residential tenants who suffer a loss of income of at least 25% due to COVID-19 measures, subject to certain eligibility criteria being met.

The details regarding these measures are set out in the Retail and Other Commercial Leases (COVID-19) Regulation 2021 (NSW) (as amended) and Residential Tenancies (COVID-19 Pandemic Emergency Response) Amendment Regulation 2021 (NSW) (respectively), which each commenced on 14 July 2021. For more details about these measures, see Checklists, COVID-19: Commercial tenancies in financial distress: key Australian legislation, legislative instruments and policies: New South Wales (NSW) and COVID-19: Residential tenancies in financial distress: key Australian legislation and legislative instruments: New South Wales (NSW).

Other support measures

Other support measures included in the NSW 2021 Support Package are:

A $75 million support package for the performing arts sector to be administered by Create NSW.
$12 million in additional funding for temporary accommodation for those at risk of, or experiencing, homelessness.
$5.1 million in funding to support mental health.

More details will be available at Service NSW: COVID-19 business support - 2021.

For the full text of the announcement, see the NSW Treasury media release: COVID-19 fighting fund to protect businesses, save jobs and support NSW through lockdown.

Summer Holiday Stock Guarantee for Small and Medium Enterprises

On 12 October 2021, the NSW Government announced the Summer Holiday Stock Guarantee for Small and Medium Enterprises (Stock Guarantee). If a local lockdown occurs, the Stock Guarantee will allow eligible, impacted businesses with an annual turnover of between $75,000 and $50,000 to:

Apply for grants of up to $20,000 to compensate for perishable stock.
Claim $10,000 for reduced capacity to sell non-perishable items.

For the full text of the announcement, see the NSW Government media release: Confidence guaranteed as we get back to work.

Small Business Fees and Charges Rebate

The Small Business Fees and Charges Rebate (Fees and Charges Rebate) allows eligible businesses and not-for-profit organisations to claim up to $1,500 to offset the costs of certain New South Wales and local government fees and charges due and paid from 1 March 2021.

To be eligible, businesses, including non-employing sole traders, and not-for-profit organisations must have:

Total Australian wages below the NSW Government 2020-21 payroll tax threshold of $1.2 million.
An Australian Business Number (ABN) registered in New South Wales or business premises physically located and operating in New South Wales.

On 12 October 2021, the NSW Government announced the Fees and Charges Rebate will be eligible for use until 20 June 2022. For the full text of the announcement, see the NSW Government media release: Confidence guaranteed as we get back to work.

For an overview of Practical Law Australia's resources on the legal, practical and commercial issues arising from the COVID-19 pandemic, see Toolkit, Practical Law Australia's guide to COVID-19 resources.

2021 COVID-19 lockdown relief measures: Federal and NSW governments announce economic support packages | Practical Law