Tax Alert - More Victorian COVID grants added to list treated as NANE income

Lowe Lippmann Chartered Accountants

More Victorian COVID grants added to list treated as NANE income

The Federal Government has recently announced that various grant programs administered by Victoria and the ACT will be added to the list of eligible grant programs to be treated as being non-assessable non-exempt income (NANE), instead of being treated as assessable income.


The NANE tax treatment under section 59-97 of the Income Tax Assessment Act 1997 is available for the relevant grant payments received in the 2020–21 or 2021–22 income years.



The new eligible grant programs added to the list include the following:


  • Business Cost Assistance Program Round Four — Construction (Victoria)
  • Business Cost Assistance Program Round Two — Top Up (Victoria)
  • Business Cost Assistance Program Round Three (Victoria)
  • Business Cost Assistance Program Round Four (Victoria)
  • Business Cost Assistance Program Round Five (Victoria)
  • Commercial Landlord Hardship Fund 3 (Victoria)
  • Impacted Public Event Support Program Round Two (Victoria)
  • Licensed Hospitality Venue Fund Top Up Payments (Victoria)
  • Live Performance Support Program (Presenters) Round Two (Victoria)
  • Live Performance Support Program (Suppliers) Round Two (Victoria)
  • Homefront 3 (ACT).

The new eligible grant programs above now join the original list of eligible grants below, listed state-by-state.


ACT state grants

  • COVID-19 Business Support Grant


NSW state grants

  • 2021 COVID-19 business grant
  • 2021 COVID-19 JobSaver payment
  • 2021 COVID-19 micro-business grant
  • NSW Accommodation Support Grant
  • Commercial Landlord Hardship Grant
  • NSW Festival Relaunch Package
  • NSW Performing Arts COVID Support Package
  • NSW Performing Arts Relaunch Package
  • 2022 Small Business Support Program


QLD state grants

  • 2021 COVID-19 Business Support Grants


SA state grants

  • COVID-19 Additional Business Support Grant
  • COVID-19 Business Hardship Grant
  • COVID-19 Business Support Grant – July 2021
  • COVID-19 Tourism and Hospitality Support Grant


VIC state grants

  • Alpine Business Fund
  • Alpine Resorts Support Program (Streams 1, 2 and 3)
  • Business Continuity Fund
  • Business Costs Assistance Program Round Two
  • Business Costs Assistance Program Round Two – July Extension
  • Business Support Fund 3
  • Impacted Public Events Support Program
  • Independent Cinema Support Program
  • Licensed Hospitality Venue Fund
  • Licensed Hospitality Venue Fund 2021
  • Licensed Hospitality Venue Fund 2021 – July Extension
  • Live Performance Support Program
  • Melbourne City Recovery Fund – Small business reactivation grants
  • Outdoor Eating and Entertainment Package
  • Small Business COVID Hardship Fund
  • Sole Trader Support Fund
  • Sustainable Event Business Program

Given the new eligible grant programs listed above may have distributed the funds during the 2020–21 and/or 2021–22 income years, it may be necessary to lodge amended tax returns to update the NANE tax treatment of the funds received where relevant tax returns have already been lodged.




Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.

October 13, 2025
In response to continuing criticism and significant industry feedback, Treasurer Jim Chalmers has announced substantial revisions to the proposed Division 296 tax. The government has decided not to apply the tax to unrealised capital gains on members superannuation balances above $3 million. The removal of the proposed unrealised capital gains tax is undoubtedly a welcome change. Division 296 was initially set to take effect from 1 July 2025. The revised proposal, effective from 1 July 2026, still imposes an additional tax but now only on realised investment earnings on the portion of a super balance above $3 million at a 30 percent tax rate To recover some of the lost tax revenue, the Treasurer announced a new 40 percent tax rate on earnings for balances exceeding $10 million. It is also anticipated that both tax thresholds will be indexed in line with the Transfer Balance Cap. We will provide more details and guidance on the new proposal as they become available.
October 3, 2025
ATO interest charges are no longer tax deductible – What you can do As we explained in our Practice Update for September, general interest charge ( GIC ) and shortfall interest charge ( SIC ) imposed by the ATO is no longer tax-deductible from 1 July 2025. This applies regardless of whether the underlying tax debt relates to past or future income years. With GIC currently at 11.17%, this is now one of the most expensive forms of finance in the market — and unlike in the past, you won’t get a deduction to offset the cost. For many taxpayers, this makes relying on an ATO payment plan a costly strategy. Refinancing ATO debt Businesses can sometimes refinance tax debts with a bank or other lender. Unlike GIC and SIC amounts, interest on these loans might be deductible for tax purposes, provided the borrowing is connected to business activities. While tax debts will sometimes relate to income tax or CGT liabilities, remember that interest could also be deductible where money is borrowed to pay other tax debts relating to a business, such as: GST; PAYG instalments; PAYG withholding for employees; and FBT. However, before taking any action to refinance ATO debt it is important to carefully consider whether you will be able to deduct the interest expenses or not. Individuals If you are an individual with a tax debt, the treatment of interest expenses incurred on a loan used to pay that tax debt really depends on the extent to which the tax debt arose from a business activity: Sole traders: If you are genuinely carrying on a business, interest on borrowings used to pay tax debts from that business is generally deductible. Employees or investors: If your tax debt relates to salary, wages, rental income, dividends, or other investment income, the interest is not deductible. Refinancing may still reduce overall interest costs depending on the interest rate on the new loan, but it won’t generate a tax deduction.
September 9, 2025
Costs incurred in acquiring / forming a business. Further to the recent blog about capitalisation of costs when acquiring an asset, we have received a number of questions in relation to costs incurred in setting up / purchasing a business. Formation costs on establishing a business: These costs would include: Incorporation fees ASIC registration fees Legal fees Business name registration Pre-operating costs Pre-opening costs. The relevant standard for these costs is AASB 138 Intangible Assets and paragraph 69a confirms that these start-up costs are expensed when incurred. There is no identifiable asset controlled by the entity when the costs are incurred as the entity does not exist. Business acquisition costs These costs would include: Legal and accounting fees Due diligence and valuation costs Stamp duty Advisory or brokerage fees Project management costs related to the acquisition Internal costs allocated to the transaction In contrast to the asset acquisition discussed previously, AASB 3 Business Combinations requires all acquisition costs to be expensed as incurred. This means that they are not included as part of the consideration paid and therefore do not affect calculated goodwill.  Entities purchasing businesses should be aware that these costs are not able to be capitalised as they can often be substantial, and purchasers often do not expect the costs to be taken directly to the income statement
More Posts