The latest ASIC figures show a 20 per cent fall in companies entering administration between March 30 and April 12, when compared with the 2019 numbers.

But insolvency experts warn of a wave of company collapses that will peak if JobKeeper ends in September as the government plans.

Lawyers say changes to insolvency and bankruptcy laws protect businesses for six months against wind-ups and liquidation, but warn businesses and their directors need written professional advice if they intend to rely on the temporary laws.

Tony Cade, chief executive of industry group HunterNet, said this week that employers had "handed back" about 50 of the 250 apprentices HunterNet has placed with various businesses.

As a group training provider, HunterNet was trying to find them new work but it was unlikely in the current climate.

Newcastle lawyer Mark Hickey, a HunterNet director and chairman of law firm DWF (Australia), said many businesses were standing down or retrenching staff and restructuring.

"The feedback from accountants is that 'it's brutal out there'," Mr Hickey said. "They say 'three times worse than the numbers in the media', with SMEs (small to medium enterprises) folding overnight, especially in hospitality and retail.

"But the government's changes both to corporate insolvency and personal bankruptcy laws mean that businesses using professional advice can navigate the crisis rather than be forced into insolvency."

JobKeeper payments start next week and the federal government says 500,000 businesses have enrolled from the 900,000 that initially expressed interest.

One applicant, Newcastle optometrist Dom Willson, says turnover at the nine-person Darby Street practice has fallen by 80 per cent.

Mr Willson, whose Custom Eyecare Newcastle business has operated for 20 years, said he and his fellow director had paid five weeks of wages for nine people on the assumption that JobKeeper would "pan out" for them.

"Some of the advice we have had from human resources experts has been not to cover those wages unless you are certain you are getting JobKeeper," Mr Willson said.

"I understand they have to give conservative advice but we are in a better position than some, in that we were able to cover the bill at least for a while without borrowing, despite having next to no turnover."

Mr Willson said two employees who had applied for permanent residency and were paying tax as Australian residents in the meantime were ruled ineligible for JobKeeper payments.

"But we have paid them and will continue to pay them because in their personal circumstances they are otherwise up a creek without a paddle," Mr Willson said.

JOBKEEPER FILE

James Shaw of Charlestown insolvency specialists Shaw Gidley said the mood during the first week of shutdown was "panic".

"The phone was running hot from people thinking of going into administration, but when the government announced its support and incentives the phones stopped ringing overnight," Mr Shaw said.

"My take is that business people are sitting back to see how to avail themselves of what's available, and to see how things play out in the long term.

"The money will help a lot of businesses survive but many will stick their heads in the sand and not do anything to adjust things structurally until they are forced to, by which time it's too late."

Mr Shaw said business had fallen so far that Shaw Gidley had been forced to register for JobKeeper and had sent in the application forms.

The insolvency industry's peak body, Australian Restructuring Insolvency and Turnaround Association (ARITA), says the COVID-19 law changes have given businesses "breathing space in an unprecedented environment".

ARITA chief executive John Winter said he understood criticisms over the month-long delay in sending out JobKeeper payments, but he was in regular contact with Treasury officials and said the government "knows there are rough edges on these policies but it's looking at the quickest way to do things, and with the best of intentions".

"But we expect four months from now that a lot of firms will start to go broke and have nothing left to pay the bills when JobKeeper stops," Mr Winter said.

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