Small Business COVID Hardship Fund

There is no doubt that Victorian small businesses have been hit hard by the rolling lockdowns, both by restrictions on trading and also ongoing uncertainty on the ability to undertake and deliver projects.

Throughout lockdowns 5 and 6 economic support has been provided by the Victorian Government, but a number of businesses have fallen through the cracks based on their GST registration status or the ANZSIC code that their ABN is registered for.

On 12th of August applications opened for a new Small Business COVID Hardship Fund, jointly funded by the Victorian and Commonwealth governments.  Successful applicants can receive a one-off payment of $10,000.  This fund is available to businesses that don’t qualify for the existing funds, provided they meet the eligibility criteria.

Eligibility criteria

The Small Business COVID Hardship Fund has the following eligibility criteria for the business in question must:

  • Be located within Victoria and have an annual Victorian payroll of up to $10M in the 2019-2020 financial year on an ungrouped basis
  • Be registered for GST and hold an ABN on and from 28 July 2021
  • Be registered with Worksafe Victoria (for employing businesses) as well as attesting that workers are being supported with access to any paid leave entitlements, or to work from home during restrictions
  • Have been severely impacted by COVID-19 restrictions that have been in place between 27 May 2021 and August 2021
  • Have experienced at least a 70% decline in turnover for a minimum consecutive two week period against a particular benchmark period – see below
  • Prove the 70% decline is as a direct consequence of COVID-19 restrictions
  • Be ineligible for other key COVID-19 Victorian Government business grant programs such as business cost assistance program that have been announced since 27 May 2021

Like previous grants, as part of the application, there must also be a proof of identity documents for the key contact in the business, which includes driver licence, Medicare Card or passport.

70% decline in turnover

There are two comparison periods to test turnover, but these are dependent on whether or not the business was operating in May 2019.  In assessing the drop in turnover, there is a need to compare GST Turnover for consecutive two week periods.

If the business was operating in May 2019, then the comparison is the best consecutive two-week trading period between 27 May 2019 and 10 September 2019, with their worst consecutive two-week trading period between 27 May 2021 and 10 September 2021.

For businesses that were not actively trading in 2019, the alternative benchmark period is 1 February 2021 to 28 July 2021.

The reduction turnover evidence must be attested to by a qualified agent (qualified accountant, registered BAS agent, registered tax agent) in a sample template provided by the Victorian Government.

This support fund will include businesses that are able to operate but COVID-19 restrictions preclude them from generating revenue, for example:

  • Key customer was required to close (e.g. food and beverage manufacturers that supply closed venues)
  • the location or type of business meant that access to customers was severely impacted
  • customers cancelled bookings or orders.

As some business applicants await outcome of another application to a key COVID-19 Victorian Government business grant program (such as the business cost assistance program), you can still apply for a grant under this program but the existing application to another program will be considered first.

Should business owners have received the COVID-19 Disaster Payment, this does not affect your eligibility to apply for the Small Business COVID Hardship Fund.

Record keeping

Records supporting the application should be kept and readily accessible, as the Victorian Government may ask applicants for evidence of both the benchmark and impacted periods.  Evidence they can request includes; BAS lodgements, total sales, invoices, financial statements, bank statements.

Finally, they retain the discretion to validate any information with the Qualified Agent and/or the Australian Taxation Office as part of the assessment process or future audits.

The Small Business COVID Hardship Fund is now open for application and will close on 10 September 2021.

For any assistance that you require for this application, Please contact Accru Melbourne.
About the Author
Chee Hii - Accru Melb
Chee Hii
With a friendly and welcoming approach, Chee is dedicated to providing expert taxation advice to her clients. Not only does Chee provide her clients with fantastic customer service but she is a great role model for her team.
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