Relief packages explained for NSW businesses hit during the latest wave of COVID

In response to soaring COVID case numbers and the ramifications of self-imposed lockdowns during the last few months, the NSW State Government has announced relief is now available in a $1 billion COVID rescue package.

Four new emergency measures have been introduced aimed to support businesses crippled by restrictions including payroll lump sums, Rapid Antigen Test rebates, commercial tenant and landlord grants, and financial assistance for the performing arts sector.

Small Business Support Program

The Small Business Support Program provides eligible businesses a lump sum payment of 20 per cent of weekly payroll with a minimum payment of $500 per week and a maximum payment of $5,000 per week. Non-employing businesses will receive $500 per week (paid as a lump sum of $2,000). Eligible businesses must have an annual turnover $75,000 and $50 million for FY21, have experienced a decline in turnover of 40 per cent or more due to the impacts Public Health Orders or the impacts of the Omicron COVID-19 strain during January and February 2022, and maintain their employee headcount from the date of announcement of the scheme (30 January 2022). Businesses will be able to apply through Service NSW from mid-February.

Small Business Fees, Charges and RAT Rebate

The existing Small Business Fees and Charges Rebate has been increased from the current $2,000 to $3,000. In addition, eligible employing small businesses will be able to use the rebate to cover half the cost of Rapid Antigen Tests (RATs). This will support worker availability by allowing healthy staff who have been exposed to COVID-19, but continue to test negative, to continue to work. Businesses currently registered will receive an automatic top up of $1,000 and newly registering businesses will receive a rebate of $3,000.

Commercial Landlord Hardship Grant and extended Commercial Leasing Relief

For many commercial property tenants and landlords, rent pressures due to COVID-19 restrictions have exacerbated an already challenging time. While the National Cabinet’s Commercial Leasing Code of Conduct was issued as a guideline nationally, the States have adopted it individually in varying forms and any extensions are on a state by state basis. As a result, there have been a number of relief packages offered across the country when it comes to leases and rents to ensure the economic impact of COVID-19 is shared by both property owners and tenants.

For businesses with an annual turnover of less than $5 million, the NSW State Government has extended its rent relief support under the Retail and Other Commercial Leases (COVID-19) Regulation 2021. Under the Code of Conduct parties are intended to mediate in good faith and property owners are required to reduce rent in proportion to the tenant’s decline in turnover. This means if a tenant has experienced a 40 per cent decline in turnover as a result of COVID-19 impacts, then the property owner must provide a 40 per cent reduction in rent – with at least 50 per cent of any relief in the form of a rent waiver. Any deferred rent must be paid back over the remaining lease term or over two years, whichever is greater.

There are a number of other considerations and eligibility requirements relating to the regulation but, at a high level, commercial and retail property owners cannot take certain actions against an eligible tenant (ie. evict an eligible tenant) unless they have first renegotiated rent as required and attempted meditation. From 13 January 2022, these amendments to the Regulation have extended rent negotiation rights for tenants from 13 July 2021 to 13 March 2022.

For eligible landlords of commercial properties who have provided rental relief waivers to affected tenants, grants of up to $3,000 per month (GST inclusive), per property, are available. Rent relief waived must comprise at least half of any rental reduction provided. This program has now been expanded in 2022 to landlords who claimed the 2021 land tax relief.

Performing Arts Package

For almost two years, the Performing Arts sector has been one of the hardest hit and they have been crying out for additional assistance. The NSW Performing Arts Relaunch Package provides financial support and much needed relief to eligible venues, producers, promoters, and musical and theatrical performances. The program has been extended to include performances staged from 19 September 2021 to 30 April 2022. The funding amount per performance will be calculated using a formula of average ticket price multiplied by the number of tickets available for sale (capped at 10,000) and a specified “Agreed Percentage”, and up to a maximum of $12.5m. Performances must be directly impacted by Public Health Orders. 

Visit the NSW Government site to learn more about current COVID grants and financial support available for NSW businesses.