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JobKeeper lite – New support measures announced by NSW and Commonwealth Government in response to the NSW lockdown.


The NSW and the Commonwealth Government together announced earlier this week additional support measures for businesses and individuals in NSW, following the new phase of restrictions and extended lockdown in Greater Sydney. 

  • You can read the joint media release from the Prime Minister, Commonwealth Treasurer, Premier for NSW and Treasurer for NSW here.
  • You can read the media release from the Treasurer of NSW here.  

Today, Prime Minister Scott Morrison proposed a new streamlined arrangement for COVID-19 lockdown relief around Australia, as a result of the increasing number of lockdowns caused by the Delta variant. The new arrangement will be put to the national cabinet tomorrow, 16 July 2021, and appears it will largely mimic the announcements earlier this week from the Commonwealth Government in relation to the Greater Sydney lockdown.

This article focuses on the support measures for business and individuals in NSW available at the time of this article.

Unlike 2020 at the height of the COVID-19 restrictions, at this time there have been no proposed amendments to the insolvency regime. In simple terms, this means directors are still on risk for insolvent trading and creditors may still issue a statutory demand at the revised threshold of $4,000 payable within 21 days. Directors should be mindful of the new government assistance available to them but also of the broader position of their businesses moving forward and whether additional protection through safe harbour is appropriate.  

Business support payments

  • A business support payment of between $1,500 and $10,000 per week will be made available to eligible businesses (including not-for-profits) with an annual turnover between $75,000 and $50 million who can demonstrate a 30 per cent decline in turnover.  The amount of the payment will depend on the size of the business’s payroll.
  • To be entitled to the payment, businesses will be required to maintain their full time, part time and long term casual staffing level as at 13 July.
  • For non-employing businesses, such as sole traders, the payment will be set at $1,000 per week.

Expanded business grants, payroll support and tax relief to support businesses in NSW through lockdown

  • The business grants program previously announced has been extended. Grants between $7,500 and $15,000 are available to eligible businesses with annual Australian wages below $10 million to cover the first three weeks of restrictions.
  • A new grants program has also been announced for micro businesses with a turnover between $30,000 and $75,000 that experience a decline in turnover of 30 per cent. Those businesses are eligible for a $1,500 payment per fortnight of restrictions.
  • Payroll tax waivers of 25 per cent, payroll tax deferrals and interest free repayment plans are available for businesses with annual Australian wages of between $1.2 million and $10 million and that have experienced a 30 per cent decline in turnover.
  • There is a short-term eviction moratorium for rental arrears where the tenant suffers a loss of income of 25 per cent due to COVID-19 and meets a range of criteria. In addition, residential landlords may apply for a capped grant of up to $1,500 or land tax reductions where they have decreased rent for impacted tenants.
  • Commercial, retail and residential landlords to financially distressed tenants who reduce the rent of their tenants are eligible for land tax concessions equal to the value of the rent reduction, up to 100 per cent of the 2021 land tax year liability.
  • Commercial and retail landlords must attempt mediation prior to any recovery of security bonds, lockouts or evictions of impacted tenants.
  • Deferral of gaming tax assessments for clubs until 21 December 2021 and hotels until 21 January 2022.
  • A $75 million support package for the performing arts sector to be administered by Create NSW.
  • A support package for the accommodation sector worth $26 million.

Support through lockdown for individuals in NSW

  • From week four of the COVID-19 lockdown in NSW, the COVID‑19 Disaster Payment will increase to $600 if a person has lost 20 or more hours of work a week or $375 if a person has lost between 8 and less than 20 hours of work a week.
  • From 18 July 2021, the COVID‑19 Commonwealth Disaster Payment will be available to those outside Commonwealth declared hotspots in NSW that meet the criteria for the payment.
  • The NSW Government will cover payments for areas outside a Commonwealth declared hotspot.

Safe harbour

Many companies and businesses still carry the scars of the pandemic in the form of deferred liabilities on their balance sheet and an overall reduction in revenue. Many of these businesses have also exhausted their cash reserves weathering the economic storm of the past 12 months and are now faced with uncertainty as a result of ongoing lockdowns.

If directors are concerned the current lockdown in NSW will push their company into further distress, they should consider entering (or re-entering) the formal safe harbour regime as prescribed by section 588GA of the Corporations Act 2001 (Cth). Importantly, unlike 2020, there is no moratorium on insolvent trading liability for directors, so directors concerned about solvency should actively consider the choices available to them.

The safe harbour regime is designed to encourage directors of distressed or near insolvent companies to formulate a plan (or plans) that is reasonably likely to deliver a better outcome for the company than an immediate administration or liquidation. The provisions offer directors protection from personal liability for debts incurred directly or indirectly in connection with a course of action or plan developed to achieve a better outcome. Further details on the safe harbour process can be found here.

For businesses where there is ongoing uncertainty, directors should consider taking advantage of the safe harbour regime in conjunction with the support measures announced by the NSW and the Commonwealth Government.

Other proactive steps that directors may consider are detailed in our previous article here

We recommend reaching out for expert advice should you have a query, or wish to consider your options, either as a company looking to understand its options or as a creditor. The Hamilton Locke Restructuring and Insolvency team have a broad range of top tier experience acting for a variety of stakeholders in distressed scenarios. For more information please contact Nicholas EdwardsZina Edwards or Brit Ibanez.