This has to STOP! Service NSW is corruptly changing its Grant guidelines and terms to manipulate extorting from 2021-approved grant recipients

October 17, 2024

2021:

Service NSW has been caught covertly (if not ‘covidly’) tweaking its own rules around its COVID-19 business support measures, as accountants struggle to keep up with ever-evolving and inconsistent guidelines.

Jihad Dib and Courtney Houssos – both hold Arts degrees so irrelevant to their ministerial portfolios. Why won’t the NSW I.C.A.C. investigate reported corruption allegations against these two Minns Ministry diversity seat-warming politicians embroiled in this grant clawback rort?

Ask NSW Labor Premier incumbent Chris Minns!

This NSW Government public authority (Service NSW) responsible for administering the COVID-19 Business Grant, Micro-business Grant and the JobSaver payment has continued to secretly change its alternative turnover comparison period from 11 to 25 June 2021 to 12 to 25 June 2021 to ensure the period was 14 days instead of 15 days.

The tweak comes just days after Service NSW introduced two alternative comparison periods for determining the decline in turnover.

Service NSW has also removed the word “national” that preceded the term “aggregated annual turnover” throughout the guidelines, and removed the requirement that a business must be GST-registered to apply for financial support.

It has also changed the accountant’s letter template for the COVID-19 Business Grant and the Micro-business Grant to specify that accountants will have to certify that the decline in turnover of a business is due to the public health order.

The Tax Institute’s senior advocate, Robyn Jacobson, said it was disappointing to see the rules still being changed seven weeks into the state’s lockdown.

She said the ever-evolving guidelines meant businesses were left wondering if they were eligible for any support, while putting practitioners on the backfoot when advising clients.

“This has to stop,” Ms Jacobson told Accountants Daily. “Accountants and businesses, who have been extremely agile and accommodating as the intermediaries throughout the pandemic, are frustrated with the lack of certainty on the eligibility requirements for the NSW COVID-19 support measures.

“We certainly acknowledge the challenge faced by the NSW government, which has had to quickly respond to the fluid health situation, but it is equally challenging to correctly advise businesses when the rules keep changing.”

Ms Jacobson, who has been tracking the guidelines since they were first released, said changes were often unannounced and updated at different times, and in some cases, reflected in one form of web guidance but not another, making it hard to determine the correct position.

She said the most recent changes were significant, particularly the changes to the accountant’s letter template.

“While accountants are comfortable with certifying a mathematical decline in turnover, a number of members of The Tax Institute have provided feedback that they consider the new certification unreasonable, or feel they are not in a position to certify that the decline in turnover is due to the public health order,” said Ms Jacobson.

The changes to the turnover comparison period and the aggregated turnover definition could also have a significant impact on a business’s eligibility, with Ms Jacobson noting that Service NSW had failed to provide advice to businesses who had applied for the support payments based on previous guidelines.

“There is still no clear pathway for businesses who have applied for support based on a previous version of the guidelines, but under the revised guidelines may be entitled to a greater level of support, less support or may indeed now be ineligible,” said Ms Jacobson.

“It is not clear how these businesses should request a review of or amend their submitted applications so that they reflect the revised rules.

“We are seven weeks into the NSW lockdown, yet some businesses in financial distress are yet to apply because of the uncertainty surrounding their eligibility. What is most important is for the money to flow to these businesses as soon as possible.”

Further…

Since the start of the ‘2021 COVID-19 Micro Business Grant‘ Service NSW has repeatedly adjusting the turnover comparison period parameters for its COVID-19 business support payments, as it hopes to streamline its claims process that has resulted in over 20,000 calls a day.

Businesses in NSW will now be able to gain access to the COVID-19 business grant, micro-business grant and the JobSaver payment if they are able to prove a decline in turnover over a minimum two-week period during the lockdown compared to the same period in either 2019, 2020, or the two-week period immediately before the Greater Sydney lockdown that commenced on 26 June.

“So, any two weeks in that period with the equivalent two-week period either in 2020 or if bushfires or other lockdowns affected them that year, then they can go back to 2019,” said Michael Gadiel, executive director of Economic Strategy at NSW Treasury.

NSW Treasury’s Michael Gadiel:

“If the business doesn’t have a trading history that long, then it can compare that revenue to two weeks immediately prior to the lockdown. I think this is an improvement because it gets up front with what the tests are; people don’t have to contact Service NSW; they can just apply directly using one of those three comparisons of their choice.”

Mr Gadiel has also clarified that the Decline in Turnover (grant eligibility criterion) must be calculated using the same method that GST is currently accounted for by the business.

Michael Gadiel:

“If you are reporting GST on cash terms, then it is cash; if you are reporting GST on accrual terms, then it is accruals,” said Mr Gadiel on Service NSW’s webinar for tax practitioners on Monday.

I know there are issues around a cash business saying I can’t demonstrate a decline because I am still getting cheques coming in.

We know the main difference between cash and accrual is timing, and given the length of the lockdown, you will be eligible at some point because if the business has ceased to trade then the income will decline, but it just may be a deferred decline to what it might be for an accruals business.

You will still be eligible for payments under the JobSaver package, but you might have to wait until the revenue has actually declined before making the application.”

The change in the turnover comparison period comes as Service NSW looks to ease pressure on its application assessment team, who have been dealing with up to 20,000 calls a day and a further 5,000 requests for a callback each day.

To date, Service NSW has received 104,000 applications for its COVID-19 business grant, with $278 million approved to be paid. Its micro-business grant has attracted 22,000 businesses, with $417,000 worth of payments approved. Over 67,000 businesses are also on JobSaver, with $86 million approved for payment.

Service NSW has also now confirmed that accountants can apply for the support payments on behalf of their clients. Businesses will need to provide a letter of authority to show that their accountant is authorised to act on their behalf if their accountant is not listed as an associate on the Australian Business Register.

Comments (3):

(1) John Wednesday, 11 August 2021
That’s great information that would have been useful THREE WEEKS AGO

(2) Anonymous Tuesday, 10 August 2021

What hasn’t been clarified yet is how the thousands of businesses that applied for the grant prior to the comparisons being tweaked can now amend their original grant applications.

For example a business may have applied prior to the tweak announcement for the grant amount of $7,500 based on their turnover decline against the 2019 year as being 32%.
After the decline period has been tweaked. That same business is now eligible for a $10,500 grant amount based on a 45% turnover declined compared to the newly announce decline year of 2020. But they have already lodged their application of $7,500 based on the old turnover period.
It could well be that the business applied the very day before the turnover decline dates were tweaked. What is the process of amending the original application or cancelling the old application & putting in a new application?

(3) Anonymous Tuesday, 10 August 2021

Webinar was a regurgitation of the website, 4 weeks too late, and with a panel of ‘experts’ who didn’t know the difference between an IAS and a BAS and neatly avoiding pertinent accountant style questions…. a lot of spin and impractical information to be honest. State publIc servants trying to administer and explain ATO rules will always be a recipe for disaster…..as long as they continue to be over paid whilst businesses receive no assistance for up to 6 weeks and counting….thanks for nothing Service NSW.

References:

[1] ‘This has to stop’ : Service NSW faces backlash over changing guidelines’, 13 August 2021, by Jotham Lian, Editor of Accountants Daily, https://www.accountantsdaily.com.au/business/16041-this-has-to-stop-service-nsw-faces-backlash-over-changing-guidelines

[2] ‘Service NSW tweaks turnover comparison period‘, 10 August 2021, by Jotham Lian, https://www.accountantsdaily.com.au/business/16020-service-nsw-tweaks-turnover-comparison-period

[3] ‘Service NSW Micro Business Grant – Terms and Guidelines‘, 17 July 2024, Nature Trail website, Government Indian Givers campaign blog, https://naturetrail.com.au/blog-post/service-nsw-micro-business-grant-terms-and-guidelines/