Covid -19 Government Grants

As part of assisting those affected by Covid 19 shut downs the government introduced measures to assist those with little or no income during the Covid lockdowns.

Some of these payments include

JobKeeper – All JobKeeper payments are assessable as ordinary income of the business eligible to receive the payments. The normal rules for deductibility apply for the amounts the business pays to its employees where those amounts are subsidised by the JobKeeper payment. The payments should be declared as income in tax returns.

Pandemic leave disaster payment – The Australian Government is providing support for individuals in certain states who can’t earn an income because either they must self-isolate or quarantine at home OR are caring for someone with COVID-19. The payments they receive are assessable income. An individual needs to report this income in their tax return.

COVID-19 Disaster Payments for people affected by restrictions. One of the requirements for eligibility is that the individual is unable to earn income because state or territory health restrictions prevent them working in their usual employment. The payments are assessable income. An individual needs to report this income in their tax return for the year in which the amounts are received.

Childcare Transition Payment – Implemented measures throughout 2020- 2021 to help the early childhood education and care sector manage the impacts of COVID-19. The measures included a Transition Payment available to approved early childhood education and care providers. The Transition Payment was made instead of JobKeeper Payment for workers of these providers. It was paid for the period 13 July 2020 to 27 September 2020 (the Transition Period). The Transition Payment was paid as a grant under the Community Child Care Fund. It was to support providers to return to the Child Care Subsidy.

Conditions of the Transition Payment were that you were an approved provider of child care services and must have met certain conditions to receive and maintain the Transition Payment, including:

  • offering an employment guarantee – by continuing to employ those employees over the Transition Period who were working or being paid JobKeeper at the end of the relief package
  • cap fees charged during the Transition Period to an amount that would otherwise have been charged for the same care in the relevant Relief Payment reference period
  • not claim JobKeeper for ineligible employees or themselves as JobKeeper eligible business participants.

A government payment to assist a childcare business to continue operating is included in its assessable income. This will include assistance provided as a one-off lump sum or a series of payments.

Consumer Travel Support program- The COVID-19 Consumer Travel Support Program is administered by Services Australia on behalf of Austrade. The program assists travel agents and tour arrangement service providers to continue to trade and meet their legal obligations to process refunds and credits to Australian consumers who were unable to travel due to COVID-19.

If eligible, a provider will receive a one-off grant during the 2020–21 financial year. The payment will be between $1,500 and $100,000, depending on the business’ annual GST turnover in the 2019 calendar year. Eligible businesses will not be required to prove how they spend the payment. The grant is included in its assessable income. This will include assistance provided as a one-off lump sum.

As professionals we will be able to assist you in making sure you only pay tax on those grants and payments that should be included as income for the 2020 -2021 financial years.