COVID-19 updates – extensions to COVID relief schemes

COVID-19 updates – extensions to COVID relief schemes

In recognising the ongoing financial difficulty faced by businesses throughout Australia, the government are providing extensions to a number of key stimulus packages for businesses which meet the eligibility requirements.

JobKeeper extended until 28 March 2021

JobKeeper has been extended again for the period of the 4th of January to the 28th of March 2021. The new extension still requires satisfaction of the actual decline in turnover test for the December 2020 quarter in comparison to a comparable period.

What’s different?

The way the turnover test is calculated is a little different this time around. Instead of using the projected GST turnover for the quarter being tested, now the current actual GST turnover is used.

The rates for the extended period:

Tier 1: $1,000 per fortnight (pre tax)

Tier 2: $650 per fortnight (pre tax)

The extended JobKeeper scheme is still open to new business participants who meet the eligibility requirements. There is no need to re-enroll for the extension if your business was already enrolled in the JobKeeper scheme for fortnights before the 28th of September.

COVID-19 leasing regulations extended until 28 March 2021

The Retail and Other Commercial Leases (Covid-19) Regulation 2020 has been further extended by the NSW Government from 31st December 2020 to 28th March 2021. This regulation was initially introduced as a rent relief mechanism for tenants impacted by COVID-19 in April 2020.

This extension means that tenants will have to re-establish their eligibility by demonstrating a 30% decline in turnover for the 2020 December quarter under the regulations to benefit from any further negotiated rent reduction for the new extension period.

In addition to the extended period, landlords of small retail tenants who have established eligibility for the extended period will be able to access additional land tax relief (of up to 25%), when they provide rent reductions to their tenants in the new period 1st January 2021 to 28th March 2021.

Whilst this relief was previously open to lessees with an annual turnover of less that $50mil in the 18/19 financial year, the extended period from 1st January 2021 to 28th March 2021 is only available to lessees with an annual turnover less than $5mil.

Coronavirus SME Guarantee Scheme Phase 2

The Coronavirus SME Guarantee Scheme is designed to support small businesses by guaranteeing 50% of new loans issued to SMEs by participating lenders. Phase 1 provided SMEs with the ability to access additional funding required by the business to get through the dramatic and lasting impact COVID-19 has had on cash flow for many businesses.

Phase 2 enhances support for businesses in recovery by providing access to unsecured working capital loans.  Phase 2 commenced on 1 October 2020 and will be made available for loans made by participating lenders until 20 June 2021. SMEs with a turnover of up to $50mil are eligible to participate in the scheme.

The loans are able to be used for a wide range of business activities and borrowers are able to access up to $1mil, secured or unsecured, with a cap on the interest rate at 10%.

If you would like more information on the extended COVID-19 relief schemes, please contact our office.