Covid-19 Support: Landlords, Tenants & Small Business

The effects of Covid-19 are being felt worldwide by individuals, small businesses, large corporations and government bodies. With it, comes a lot of new and unfamiliar territory, the likes of which the world has never seen.

For individuals and small business, the financial effect can be significant and could continue for the coming months and years. Putting strategies and business plans in place now for the months that lie ahead could mean that your small business can weather the harsh times and still be operating once the dust has settled. This is the hope for us, and for your small business too.

We have received a lot of enquiries from our small business clients in relation to their Lease obligations and the financial impact sustained as a result of a loss of income. This article outlines the recent government advice and packages regarding:

  • commercial tenancies;
  • JobKeeper payments;
  • PAYG withholding cash boost;
  • Queensland Government support including electricity rebates, payroll tax refunds and deferrals;
  • childcare education and relief package;
  • early superannuation access; and
  • changes to bankruptcy law.


A Moratorium on Evictions

The National Cabinet has agreed that short-term intervention is needed for commercial tenancies.

A moratorium on evictions over the next 6 months has been implemented ensuring that tenants cannot be evicted because of failed payment of their lease commitments due to the financial stress suffered as a result of Covid-19.

This decision has been made to allow businesses to “hibernate” so that they can come out of the other side of the pandemic, still intact.

The Principles

Commercial tenants, landlords and financial institutions are encouraged to sit down together and negotiate.

The National Cabinet agreed to a common set of principles to underpin and govern intervention to aid commercial tenancies as follows:

  • a short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to coronavirus;
  • tenants and landlords are encouraged to agree on rent relief or temporary amendments to the lease;
  • the reduction or waiver of rental payment for a defined period for impacted tenants;
  • the ability for tenants to terminate leases and/or seek mediation or conciliation on the grounds of financial distress;
  • commercial property owners should ensure that any benefits received in respect of their properties should also benefit their tenants in proportion to the economic impact caused by coronavirus;
  • landlords and tenants not significantly affected by coronavirus are expected to honour their lease and agreements; and
  • cost-sharing or deferral of losses between landlords and tenants, with Commonwealth, state and territory governments, local government and financial institutions to consider mechanisms to provide assistance.

In negotiating and enacting temporary arrangements, the National Cabinet has provided a 14-point code of conduct. Additionally, if an agreement cannot be reached by both parties, the matter can be referred by either party for binding mediation.

You can read the full statement, including the code of conduct, from the National Cabinet here.

Business as usual?

When negotiating, it is important to keep in mind that even if the Covid-19 situation resolves in the next six months and the country resumes business as usual, it is likely that small business trading will be slow to start.

That being the case, cashflow may not be strong enough to sustain full rent at the start.  You may also wish to negotiate a return to work solution.


In addition to rent relief, you might also want to consider and register for the JobKeeper support package the government announced recently to help keep staff employed and businesses operating.

Under the JobKeeper payment, businesses that are significantly impacted by Covid-19 will be able to access a subsidy from the government to continue paying employees. Under this scheme, the government will provide $1,500 per fortnight per employee.

Eligible employers

Employers are eligible for the scheme if:

  • their business has a turnover of less than $1 billion and their turnover has fallen by more than 30%; or
  • their business has a turnover of $1 billion or more and they estimate their turnover has fallen by 50% or more; and they are not subject to the Major Bank Levy.

For charities registered with the ACNC, they will need to show a fall of 15% or more.

Employers will be expected to establish that their turnover has or will likely fall in the relevant month or quarter (depending on the BAS reporting period) relative to their turnover in a corresponding period a year earlier.

The 30% decline is to be applied over the whole of the business. This means that you cannot single out a decline in only one division or group of divisions.

The relevant test months are March and April 2020. There is also an option to assess your projected drop in income over the April to June 2020 quarter. If you don’t qualify but later do qualify then you can apply for the support from the month in which you qualified.

Once a decline in turnover has been met, your business is entitled to JobKeeper payments for the rest of the duration of the package, even if your turnover increases. Additionally, there is no requirement to directly link the decline to Covid-19.  Therefore, the test only needs to be met once without the need for further review.

Eligible Employees

Employees are eligible if:

  • they are currently employed by the employer (including those stood down or re-hired);
  • were employed by the employer at 1 March 2020;
  • are full-time, part time or long-term casual (a casual employed on a regular and systemic basis for longer than 12 months as at 1 March 2020);
  • are at least 16 years of age at 1 March 2020;
  • are an Australian citizen, the holder of a permanent visa or a Special Category visa at 1 March 2020 and were a resident for tax purposes; and
  • are not in receipt of a JobKeeper payment from another employer.

There is a “one in, all in” requirement, meaning that all eligible employees must be included in JobKeeper payments.

There has been some controversy over the requirement for a casual employee to be long term. There is some scope to claim for casual employees and their continuity of employment is what is of importance over that 12 month period.

Self-employed and closely held entities

Individuals who are not employees of their business may qualify for JobKeeper payments if they are:

  • a sole trader;
  • a partner in a partnership;
  • an adult beneficiary in a trust; or
  • a shareholder in or director of a company.

Only one actively involved business participant (director, partner etc.) can be nominated per business and the ABN must have been held since at least 30 March 2020.

Application Process, PAYG & Super

Employers can register their interest via from 30 March 2020.

Eligible employers will need to identify eligible employees and provide monthly updates to the ATO. The entire payment must be passed onto the employee. However, it will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper payment. Additionally, the payment is a before tax amount – tax must be withheld.


The payment will be available from 30 March 2020 until 27 September 2020. The first payment will be received by employers from the ATO between May 1 and May 14. The payment will be made by the ATO monthly, in arrears. The last payment will be made on 27 September 2020.

However, employers must make payment to employees for the first two fortnights from 31 March, before the end of April for these weeks to be covered by the JobKeeper payment.


Employers have a number of obligations when receiving these payments. These include a duty to inform employees of utilising the JobKeeper payment, making minimum payments to employees and reporting employee data and turnover to the ATO on a monthly basis. The ATO has released some of these forms and will continue to release reporting forms in the coming weeks.

More  information is available here.


In addition to the JobKeeper payments, the ATO will provide cash flow boosts delivered as credits in the activity statement system from 28 April 2020.


Eligible businesses include:

  • small or medium businesses or not-for profit businesses with an aggregated annual turnover less than $50 million;
  • held an ABN on 12 March 2020;
  • made a payment to employees subject to withholding (even if the amount withheld is 0) such as salary and wages, director fees, eligible retirement or termination payments, compensation payments of voluntary withholding from payments to contractors; and
  • the business lodged, before 12 March 2020:
    • a 2018-19 tax return showing an assessable income in relation to carrying on a business; or
    • an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing a taxable, GST-free or input-taxed sale.

Eligibility is with each employer entity. It is not a group test. Note also that there are anti-avoidance measures that will be taken by the ATO ie. If a structure is split after the announcement. There will be a statutory obligation to repay the boost if you are aware that your business is not entitled to it.

The cash boost may still be applicable if you took over an existing business after 12 March 2020.

Amount of cash flow boost

These businesses will receive between $20,000 and $100,000 in cash flow boost amounts by lodging all activity statements up to the month or quarter of September 2020.

The amounts will generally be equivalent to the amount withheld from wages paid to employees in the March to June 2020 periods. Essentially, it will equal the amount of your PAYG withholding.

Eligible businesses that withhold tax on their employees’ salary and wages will receive a credit equal to 100% of the amount withheld, with the following exceptions:

  • Monthly lodgers will receive a credit for March 2020 which is 300% of their withholding for that month. This will provide an approximate equivalent to lodgers reporting quarterly.
  • Eligible businesses will receive a minimum of $10,000 across March to June 2020, even if their total withholding is less than $10,000.
  • If you receive a minimum credit of $10,000 you will not be eligible to receive any more cash flow boosts until your PAYG withholding exceeds $10,000 over the eligibility periods.
  • Total cash flow boosts for March to June 2020 cannot exceed $50,000.

This cash flow boost is tax free, unlike the JobKeeper payment.

Delivery of cash flow boost

This cash flow boost will be applied automatically by the ATO.

The cash flow boosts will be applied to reduce liabilities arising from the activity statement. If there is credit remaining after this occurs, you will generally receive a refund of that amount.

An additional cash flow boost will be applied when activity statements are lodged for June to September 2020. These credits are equal to the total boosts credit for March to June 2020.

The credits will be paid out in either two or four instalments depending on your business’s reporting cycle.

Key dates

If you lodge quarterly, you will be eligible to receive the credit for:

  • Quarter 3 (January – March 2020). Lodgment due date is 27 April 2020.
  • Quarter 4 (April – June 2020). Lodgment due date is 28 July 2020.

If you lodge monthly, you will be eligible to receive the credit for:

  • March 2020. Lodgment due date is 21 April 2020.
  • April 2020. Lodgment due date is 21 May 2020.
  • May 2020. Lodgment due date is 22 June 2020.
  • June 2020. Lodgment due date 21 July 2020.


The Queensland Government has released a variety of measures to assist businesses. We encourage you to follow the relevant links to secure further information. You can use the business assistance finder to find support available for you.

Payroll tax relief

The Queensland Government will provide immediate payroll tax refunds and deferral for Covid-10 affected businesses. More information is available here.

All small and medium businesses in Queensland will be eligible for:

  • a two month refund of payroll tax, giving an average of nearly $9,000 cash
  • a three month payroll tax holiday, saving an average of  $13,360
  • deferral of all payroll tax payments for the rest of 2020

The Queensland Government considers a small or medium business to be one with annual payrolls of $6.5 million or less.

Larger businesses affected by Covid-19 will be eligible for:

  • the two month payroll tax refund
  • the deferral extended for all of 2020.

A larger business is one with annual payrolls over $6.5 million.

Job support loans

The Queensland Government has also created a loan facility of at least $500 million to support businesses impacted by Covid-19 to retain employees and maintain operations.

They will provide low interest loans of up to $250,000 for carry on finance with an initial 12-month interest free period. Any eligible business can apply for a loan. Information is available here.

Power bill rebates

Sole traders, small and medium businesses will receive a $500 rebate on their power bills from the Queensland Government.

Any business consuming less than 100,000 kilowatt hours will receive the rebate, which will be automatically applied on business electricity bills.

Extended operating hours

Businesses that mainly sell food or groceries can open for longer to enable people to obtain essential services.

Mentoring for small business

Additionally, they have created a Mentoring for Growth program ready to provide tailored support to impacted small businesses. This includes financial mentoring and business planning.

Businesses can access information and one-on-one support by calling the Small Business Hotline on 1300 654 687 or completing the online survey at Find out more here.


The Federal Government announced the Early Childhood Education and Care Relief Package on 2 April 2020.

From 6 April 2020, weekly payments will be made directly to early childhood education and care services. Payments will be made until 28 June 2020 and will complement JobKeeper payment. Additionally, families will not be charged fees during this time.

More information is available from the Department of Education, Skills and Employment here.


The government is allowing individuals affected by Covid-19 to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Tax will not need to be paid on amounts released and it will not need to be included in your income tax return.

To apply for early release, one or more of the following requirements must be met:

  • you are unemployed;
  • you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment, special benefit or farm household allowance; or
  • on or after 1 January 2020, either you were made redundant, your working hours were reduced by 20% or, if you were a sole trader, your business was suspended or there was a reduction of 20% or more.

More information is available from the ATO here.


The temporary debt relief measures include the following:

  • a temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond;
  • a temporary increase in the threshold for a creditor to initiate bankruptcy proceedings, an increase in the time period for debtors to respond to a bankruptcy notice and extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition;
  • temporary relief for directors from any personal liability for trading while insolvent; and
  • temporary flexibility in the Corporations Act 2001 to provide targeted relief for companies from provisions of the Act to deal with unforeseen events that arise as a result of the coronavirus health crisis.

More information is available here.

Termination of Contract

Termination of ContractThe High Court’s decision in Koompahtoo v Sanpine spelled out the circumstances which can give you a right, under the common law, to terminate a contract. You’ll have a right to seek termination of a contract if:

  1. an essential term of the contract was breached; or
  2. a non-essential term of the contract, causing substantial loss, was breached; or
  3. repudiation of the contract took place.

What Is An Essential Term Of A Contract?

Essential terms are also known as conditions; they are distinct from warranties. A term is said to be essential when it is of such importance to the party receiving a contractual promise “that he would not have entered into the contract unless he had been assured of a strict or a substantial performance of the promise” and the other party knows or ought know of this.

A breach of an essential term will give the innocent party a right to terminate a contract and seek to recover damages for the loss of contract.

A breach of a warranty, on the other hand, will not give you a right to terminate a contract. The available remedy is to seek recovery of damages caused by a breach of warranty (Sale of Goods Act 1896 (Qld)).

It should be noted that even though most contracts use specific language to differentiate between essential and non–essential terms, for example, by using words like ‘conditions’ and ‘warranties’, such usage is not compulsory and the meaning of terms will be determined by the Court, including the meaning of ‘conditions’ if such words were used (Wickman Machine Tool Sales Ltd. v L. Schuler A.G. [1974] AC 235, [1973] 2 All ER 39).

What is a non-essential term of a contract?

A non-essential term is a term occupying a place somewhere between a condition and a warranty (Ankar Pty Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15 at 561-2), which is why it’s often referred to as an intermediate term in common law. An intermediate, or non-essential term is classified as a term of lesser importance than an essential term because its breach doesn’t give you a right to terminate a contract but its legal value is higher than that of a warranty—a breach of warranty only gives you a right to damages caused by a warranty breach (Sanpine Pty Ltd v Koompahtoo Local Aboriginal Land Council & Ors [2006] NSWCA 291 at 176).

A contract can be terminated, however, if a breach of an intermediate term is sufficiently serious. To determine if a sufficiently serious breach of an intermediate term took place, the courts will consider:

  1. if the whole of the contract was affected by the breach so that its fulfilment is seen substantially different from that originally intended by the parties, as a result of the breach;
  2. the seriousness of the breach will depend on the consequences of the breach, both actual and foreseeable, for the innocent party;
  3. the onus of proof is on the innocent party to show the seriousness of the consequences of the breach which will be assessed by the court.

What is a repudiation of a contract?

In common law, repudiation may refer to conduct which indicates an unwillingness or an inability of a party to perform a substantial part of the contract. It can demonstrate itself in a form of an intention to no longer be bound by the contract or “to fulfil it only in a manner substantially inconsistent with the party’s obligations.”

In Freeth v Burr ((1874), L.R. 9 C.P. 208 at p. 214), Justice Keating said : “It is not a mere refusal or omission of one of the contracting parties to do something which he ought to do, that will justify the other in repudiating the contract; but there must be an absolute refusal to perform his part of the contract.”

This is an important point to keep in mind—a party does not necessarily repudiates a contract when it acts on misinterpreted terms of it (although repudiation may arise if the party persists on wrongful interpretation after the terms have been clarified and brought to their attention). If a party to a contract misinterprets its terms but the other party, instead of trying to clarify the terms, attempts to terminate the contract for repudiation, it may find itself being a repudiating party, giving the party that was acting wrongfully in the first place an opportunity to terminate the contract.

Unexpected twists like that highlight the importance of professional legal advice in the area of commercial law.

A team of experienced solicitors at Hollingworth & Spencer is available to assist your business in matters of commercial law should you require any advice.

Work Health & Safety Due Diligence


Have you really met this new set of obligations?

A new uniform Work Health and Safety regime has been adopted in Queensland, New South Wales, the ACT, the Northern Territory and the Commonwealth since 1 January 2012.

The new laws comprise the model Work Health and Safety Act 2011 (model Act), the model Work Health and Safety Regulations 2011 (model Regulations), model Codes of Practice, as well as a National Compliance and Enforcement Policy.

1. Are you caught?

The safety obligations under this regime, which we explain below, bind not only company directors, but also “officers” of companies, partnerships and government departments.

The term “officer” includes:

  • de facto directors (i.e., persons acting in the position of directors who gives instruction or guidance);
  • shadow directors;
  • company secretaries;
  • persons who make decisions that affect a substantial part, if not the whole, of an organisation’s business;
  • a person who is able to significantly affect the organisation’s financial standing;
  • a trustee who administers a compromise or an arrangement of the organisation;
  • project managers;
  • lawyers involved in decisions affecting a substantial part of the organisation’s business;
  • receivers;
  • administrators or liquidators of companies; and
  • officers of the Crown.

2. What does “due diligence” mean in the real world?

All “officers” of companies, partnerships and government departments are obliged, under the new regime, to exercise due diligence in order that the organisation that they head or significantly affect complies with the safety duties that are imposed by the new regime.

“Officers” cannot delegate this duty to anybody else.  Moreover, an “officer” can be found to be in breach of that duty even if their organisation has not breached its safety obligations under this new regime.  This means that, if the organisation has been lucky enough to avoid a safety incident, its “officers” could still be in breach of their due diligence duty if they do not have appropriate safety systems in place, etc. Practically, this means that even though you may specifically employ someone or task someone with a role, something like “safety officer” or similar, you still have to check to see that systems are in place to meet the potential safety risks in the workplace.

3. How do I meet these standards?

An “officer’s” exercise of due diligence comprises the following obligations:

  1. Acquiring and maintaining up to date knowledge of Work Health and Safety matters, both in terms of familiarisation with the current law and also in terms of acquiring internal organisation reports regarding safety performance and workplace health and safety regulationsany issues of concern.
  2. Familiarisation with the nature of the organisation’s operations and the hazards and risks associated with these.
  3. Provision of appropriate resources and processes to enable the identification of hazards and their elimination from the organisation.  At a minimum, this requires recruiting appropriate staff members with relevant safety expertise as well as training personnel to ensure that safety is taken into account in decision-making processes.
  4. Reporting and analyzing safety performance so the organisation can promptly respond to hazards.
  5. Ensuring that the organisation implements processes for complying with its safety obligations.  This includes not only reporting hazards, but also consulting with personnel, ensuring compliance with notices issued under the new legislation, and ensuring the training of personnel with regard to Work Health and Safety issues.
  6. Conduct of safety audits and officers’ personal verification that the organisation’s systems ensure compliance with safety obligations.

Overall, the due diligence duty on “officers” requires personal vigilance to ensure that their organisation complies with its safety obligations.

4. What if I am too busy or don’t get around to it?

Penalties apply.

The following penalties are the maximum penalties:

1. Category 1 offence:
The officer without reasonable excuse and with recklessness exposing an individual to a risk of death or serious injury or illness – $600,000 fine or 5 years imprisonment or both.

2. Category 2 offence:
Failure by an officer (without recklessness) exposing an individual to a risk of death or serious injury or illness – $300,000 fine.

3. Category 3 offence:
Officer’s failure to exercise due diligence, but there is no exposure of an individual to a risk of death or serious injury or illness – $100,000 fine.

5. Is there some way to limit my personal exposure?

Although “officers” cannot delegate their due diligence duty to any other person, they should, ensure that appropriate clauses are included in their Employment Contracts to provide for support with the payment of legal advice and costs so they can understand their legal position and respond to any enquiries made by the authorities.  It is also appropriate for organisations and “officers” to ensure that insurance policies maintained by the company provide this style of cover to “officers”.

If you have any further questions, please contact Adam Robinson of our office on (07) 3123 5700.

Due to the impact of specific facts on any given case please treat this information as a general guide and not as legal advice. If you require advice on how to adequately protect your security rights please contact Adam Robinson on 07 3123 5700.