Victorian small businesses wait months for COVID-19 payments amid confusion over GST rules

business-support Business Cost Assistance Program

Small business closes doors during COVID-19. Source: Unsplash/Anastasiia Chepinska.

Confusing advice, unanswered queries and weeks without COVID-19 business support payments are causing anger among some small business owners in Victoria.

The Victorian government’s Business Cost Assistance Program, which paid up to $8400 a week to struggling businesses during lockdown, has become a source of frustration for business owners who fear they’ve missed out on payments because they received confusing advice.

Jacob Kotaridis, owner of the events management business Modus Operandi, says he was told to backdate his GST before applying for the payments in order to become eligible.

But since he lodged his application on September 9, he hasn’t received a response from Business Victoria, the department responsible for approving the grants, despite numerous enquiries.

“It’s quite frustrating,” Kotaridis tells SmartCompany. “I’ve messaged them on multiple occasions now and no one ever gets in contact.”

GST rules cause confusion

Kotaridis is an events manager and planning consultant who operates Modus Operandi as a sole trader. He engages contractors to help deliver large scale projects, which prior to COVID-19 included outdoor events and festivals.

Had Kotaridis’ initial Business Cost Assistance Program been approved, he says he would have received “upwards of $30,000”.

“It’s quite a significant grant,” he says.

Kotaridis says “what puts salt in the wound” is that he knows multiple people who backdated their GST and then successfully applied for the Business Cost Assistance Program before he lodged his application.

“It’s not like the rule was you cannot have a backdated GST registration from the start,” Kotaridis says.

Another small business owner, who sells giftwares online, in stores and at markets, told SmartCompany they have experienced similar problems.

The business owner, who has asked not to be named because they don’t want their payments to be affected, called Business Victoria before lodging an application for the Business Cost Assistance Program Round Two July Extension in the first week of August.

“I was informed that I actually had to backdate the GST and would then be eligible for it,” they tell SmartCompany.

But since lodging the grant application almost two months ago, the business owner has not received the outcome.

“I made regular phone calls to Business Victoria, every time I rang they would look at it and say ‘no problem, everything looks fine’ […] You just have to wait for the approval,” they say.

To make matters worse, this business owner says they may have missed out on the federal government’s weekly COVID-19 Disaster Payment of either $750 or $450 due to confusion over the GST rules.

They postponed applying for the disaster payments while their Business Cost Assistance Program application was pending. Applicants are unable to receive the federal government’s COVID-19 payments if they are on other support.

“The advice not only potentially means I can’t get the Business Cost Assistance Program, but it impacted me getting any support at all,” they say.

There are 6000 applications for the Business Cost Assistance Program with outstanding issues related to GST registration, making up 3.6% of the 167,000 applications the Victorian government received.

A Victorian government spokesperson confirmed the Department of Jobs, Precincts and Regions has examined call recordings and email records with the Business Victoria hotline to find out whether incorrect advice was given to business owners.

The spokesperson told SmartCompany the department “has not found any evidence to suggest agents have been advising applicants to backdate their GST registration”.

“The Department of Jobs, Precincts and Regions assesses all grant applications to ensure public money is allocated fairly and to eligible applicants,” the spokesperson said.

A lifeline for small businesses

The Business Cost Assistance Program was one of several support payments available to Victorian businesses affected by tough COVID-19 restrictions this year.

The state and federal government jointly funded the program, which saw $4.7 billion paid out to businesses since June. 

The grants, which were available in multiple rounds of varying amounts, included automatic weekly payments dependent on payroll of up to $8400.

To be eligible for the payment from August onwards, businesses needed to be in a specific industry and have incurred direct costs as a result of COVID-19. 

Stacey Price, accountant and BAS agent at Healthy Business Finance in Bendigo, says issues with the grant programs emerged when the criteria was updated in the weeks after applications opened.

“The criteria changed to say that not only did [businesses] have to be GST registered but the GST registration had to be active at a certain point in time,” Price says.

“That wasn’t necessarily in the main criteria, you had to go through the FAQ section to read that,” she adds.

Currently, the FAQ for the grant states that businesses must have been registered for GST on or from July 15, 2021 to be considered.

“Often the criteria wasn’t clear the day the grant opened and I think some of the confusion comes in because the criteria was clarified a week or two after,” Price says. 

COMMENTS

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments