JobSaver update and things to consider over the coming months
As NSW will soon start to exit lockdown, business owners need to plan for the Government's announcement to reduce and end the JobSaver payments. Cash flow is going to be one of the key issues many businesses will face over the coming months.
End of JobSaver
The Government have announced the following changes to the JobSaver payment, which will be reduced as vaccination rates increase and businesses start opening again:
- When NSW reaches 70% double vaccination, JobSaver will reduce
from 40% of weekly payroll to 30% and up to a maximum of $75,000
per week (reducing from $100,000). This is anticipated to occur on
10 October 2021.
- When NSW reaches 80% double vaccination, JobSaver will reduce
from 30% of weekly payroll to 15% and up to a maximum of $37,500
per week (reducing from $75,000). This is anticipated to occur by
31 October 2021.
- On 30 November 2021, JobSaver will end.
We remind you that during this period, the business needs to continue reconfirming its eligibility on a fortnightly basis and if you no longer meet the decline in turnover requirement, you may not be eligible for the JobSaver payment. The following table summarises the changes to the payment:
|Relevant dates||% of weekly payroll||Weekly payment range||Non-employing businesses|
|Current - 9 October 2021||40%||$1,500 to $100,000||$1,000|
|10 October 2021 - 80% double vaccination||30%||$1,125 to $75,000||$750|
|80% double vaccination - 30 November 2021||15%||$562.5 to $37,500||$375|
We have summarised some issues to consider for businesses below which we are well placed to assist with:
- Cash flow forecasting - Cash flow forecasting
should be undertaken by businesses to consider the cash impact of
the reduction in available grants, taking place over the next few
months. Understanding your debt covenants and your cash flow
requirements to meet your contractual obligations is essential.
This is even more crucial when you have provided personal
guarantees or security over the loan. When preparing a cash flow
forecast, it is important to have a clear understanding of the
liquidity you need to maintain to meet your financing
- Grants available – The Government have
provided a wide range of grants and financial assistance over the
last few months, and it is imperative that you maximise the funding
your business may be eligible for.
- Financing – The Government has recently
expanded the SME loan recovery scheme which may be available to
businesses with a turnover of up to $250 million for a broad range
of business purposes. Through this scheme, the Government can
guarantee 80% of the loan and businesses can access up to $5
million from the banks if they have been adversely economically
affected by COVID-19. Furthermore, through this scheme, banks are
offering repayment holidays and loans can be either unsecured or
secured. The expanded scheme applies from 1 October 2021 – 31
- Lease negotiations – In August 2021, the
NSW government announced the requirement for landlords to
renegotiate rents with eligible commercial and retail tenants with
a turnover of up to $50 million who were adversely impacted by
COVID-19. In negotiating these agreements, landlords must offer
tenants rent relief proportionate to the tenant's decline in
turnover. Waivers should make up at least 50% of any rent relief
provided and the balance would need to be a rental deferral. If you
have not already done so, it may be prudent to speak to your
landlord and start negotiations now.
- Budgeting - Careful consideration needs to be given in relation to all aspects of your budget which may include (but will not be limited to) changes to the level of staffing, amount of stock you need to hold etc. You will also need to critically look at your overheads and determine whether these are still appropriate.
- Staffing issues – It is important to be
aware of the HR issues that come with opening your workplace.
FairWork has put out significant guidance on issues employers need
to keep in mind including workplace rights and obligations in
relation to COVID-19 vaccinations.
Refer to the FairWork website for more information.
With the end of JobSaver and the reopening of NSW, it could highlight changes in staff requirements. It is important to consider your obligations under the National Employment Standards and/or your contractual obligations with your employees. We remind you that any terminations and/or redundancies are subject to "special" treatment for PAYG withholding and superannuation guarantee purposes.
This article is issued as general commentary - please contact us about your specific circumstances.