The Export Market Development Grant (EMDG) can net your company as much as $150,000, but it is paid out differently from many other grants. Where you may expect a lump sum or reimbursement, the EMDG is paid out through a split system. AusTrade explains that this is done to ensure that a) your activities come in under budget, and b) so everyone who is eligible and applies for the EMDG can receive it.
However – and especially if it’s your first time applying for the EMDG – the minutiae of split payments can be confusing. Here’s everything you need to know to get started.

What do you need to know about EMDG split payments

How will your EMDG payment be split?

How the EMDG’s split payments work

When your EMDG application is approved by AusTrade, you’re in. From there, the organisation will calculate exactly how much you are entitled to, based on the activities you’ve applied for and how much they will cost – then come the two split payments.

Round one of the EMDG is an initial sum which caps off at your designated payment ceiling, given shortly after applications are finalised.
Round two of the EMDG is any payments you qualify for that go above your payment ceiling, given at the end of the financial year.

It is possible to circumvent the split payment system and receive the full entitlement upon the first payment. This occurs when the full amount you applied for falls below the payment ceiling.

Defining your EMDG payment ceiling
The formula AusTrade uses to determine your payment ceiling is the total amount of money you are claiming minus $5,000, then split in half. For example – if your claim was for $45,000 of expenses, AusTrade would subtract $5,000 and split it in half to give you a payment ceiling of $20,000.

The smallest amount AusTrade will pay out for the EMDG is $5,000, up to a highest possible total of $150,000. If you have successfully applied for the EDMG, AusTrade typically announces your ceiling in the following June.

Receiving the second instalment of your EMDG
When you claim an amount under the EMDG that exceeds your ceiling, a second “tranche” payment will be made by AusTrade at the end of the financial year. This will not necessarily be the full amount you requested, as a high number of applicants can restrict the available funds.

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What do you need to know about EMDG split payments

It’s important that you do your homework to understand the limit to your first EMDG payment.
In AusTrade’s own words, “you should not plan or make financial commitments that assume you will receive any particular level of second-tranche payment for which you provisionally qualify”. However, if your application is approved, everything up to your payment ceiling should be near-guaranteed.

Be wary of diminishing EMDG returns
For your first two EMDG applications, your payment ceiling should remain the same. However, with subsequent applications, the rules will change. From this point, AusTrade requires that your export activity be measured against one of two performance benchmarks.

Under the first, AusTrade will grant you a provisional EMDG entitlement that is the smallest amount out of the initial formula (half of your total expenses minus $5,000) and a specific percentage of your export earnings. This percentage begins at 40 per cent on your third application, dropping down to 5 per cent for your seventh and eighth times going through the programme.

What do you need to know about EMDG split payments

Over time, the amount you can claim with the EMDG will diminish.

Under the second benchmark, your export activities must meet Australian Net Benefit requirements. AusTrade will calculate your entitlement based on the usual factors (available funds and your grant payment ceiling) if you pass the ANB barriers.

As you can see, the split payment system can be complex, and with dwindling returns as you return to the scheme time and time again. To ensure you don’t bite off more than you can chew, make sure to use the grant experts here at Techwitty.

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