The JobKeeper payment is a $1,500 per fortnight (before tax and salary arrangements) subsidy from the government that businesses and not-for-profits impacted by Coronavirus will be able to claim per eligible employee from 30 March 2020 until 27 September 2020.
Eligible Employers
An entity carrying on a business in Australia or a not-for-profit body pursuing its interests principally in Australia as at 1 March 2020
A business with an aggregated turnover of less than $1 billion whose turnover has fallen or will likely fall by 30% or more; or
A business with an aggregated turnover of more than $1 billion whose turnover has fallen or will likely fall by 50% or more; and
A business not subject to the Major Bank Levy
Charities registered with the Australian Charities and Not-for-profits Commission (ACNC) will be eligible if their turnover has fallen or will fall by 15%.
Specifically Excluded
Businesses that are in liquidation are not eligible for the payment
Any government body or agency and wholly-owned corporations of these bodies are not eligible.
You can receive the JobKeeper payment at any time between 30 March 2020 and 27 September 2020 where you are an eligible employer and able to prove the required decline in turnover. Once you establish the eligible decline in turnover there is no need to retest in later months to continue receiving the payment.
Decline in Turnover Test
The decline in turnover is tested using two available methods. Turnover is calculated as it is for your GST reporting purposes either on a cash or accruals basis. It includes taxable supplies, all GST free supplies but not input taxed supplies (for example interest and other investment income, residential rent).
The basic decline in turnover test works by comparing your projected GST turnover for a period with your GST turnover in the corresponding period a year earlier. This period can be a month or a quarter. If a one month turnover test period is being used, it must be – March 2020, April 2020, May 2020, June 2020, July 2020, August 2020 or September 2020. If a three month period is being used it must be one of the following periods – quarter starting 1 April 2020 or quarter starting 1 July 2020
The alternative turnover test will be made available by the Tax Commissioner. This test is for those businesses or not-for-profits who were not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover. The Tax Commissioner will be given the discretion to accept additional information to establish eligibility in specific cases. We are still waiting on further information from the ATO as to how these alternative tests may look.
There will be some tolerance where an entity has predicted the eligibility turnover decline in good faith but actually experiences a slightly smaller fall.
Businesses, individuals and entities that deliberately enter into arrangements in order to reduce their turnover and gain access to JobKeeper payments will not be entitled to the payment. General Interest charge will apply to any overpayment and significant administrative and criminal penalties may also apply to anyone involved in such schemes.
Eligible Employees
Person aged 16 years or over on 1 March 2020
Must be employed by the business on 1 March 2020 & continue to be engaged by the employer, including – full time, part time, long term casuals (employed for more than a year) and stood down employees.
An Australian citizen, holder of a permanent visa or a Special Category (Subclass 444) Visa holder
Employees receiving Parental Leave from their employer are eligible but employees receiving Parental Leave Pay from the government are not eligible.
Those employees on workers compensation but working reduced hours will be eligible. Employees receiving workers compensation who are not working are not eligible.
Employees that were re-employed by a business that were previously an employee at 1 March 2020.
Where employers participate in the scheme, they must pay employees as follows:
Where an employee receives $1,500 or more a fortnight before tax, they will continue to receive their regular income based on their current workplace arrangements.
If an employee would normally receive less than $1,500 per fortnight before tax, their employer must now pay that employee $1,500 per fortnight before tax.
If the employee was stood down, the employer must pay their employee the minimum $1,500 per fortnight before tax
No superannuation guarantee payments will be required to be paid on any additional payments made because of the JobKeeper payment.
Qualifying employers that decide to participate in the JobKeeper scheme must notify all employees in writing that they have elected to participate in the scheme and that their eligible employees will be covered by the scheme. The link below will take you to the ‘JobKeeper employee nomination notice’ ATO instruction page:
https://www.ato.gov.au/Forms/JobKeeper-payment---employee-nomination-notice/
Employees can only be nominated for the JobKeeper payment by one of their employers. If a casual employee has another employer where they are employed on a permanent basis (full time or part time), they must nominate with their full time or part time employer under the scheme.
An employer needs to notify the Commissioner of their election to participate in the JobKeeper scheme. This notification needs to be provided before the end of a fortnight to qualify for the fortnight on an on-going basis. In the case of qualifying from 30 March 2020 (the beginning of the first fortnight), the employer must notify the commissioner by 26th April 2020 (the end of the second fortnight).
For the first two fortnights (30 March 2020 – 12 April 2020 & 13 April 2020 – 26 April 2020) the ATO will accept the minimum $1,500 payment for each employee even if it has been paid late, provided it has been paid by the end of April. You can pay at least two fortnightly payments of $1,500 per employee before the end of April, or a combined payments of at least $3,000 before the end of April.
Business Participation
A business can still qualify for the JobKeeper payment where they do not actually employ anyone. One individual who is actively engaged in the business can be nominated to receive the JobKeeper payment:
Sole traders – the business owner
Partnerships – one partner
Trust – the individual must be an adult beneficiary of the trust
Company – either a director or shareholder in the company
Where an individual is receiving the JobKeeper payment as a business participant they are not able to receive the payment as an employee of another employer. In each entity only one individual can be nominated to receive the payment.
Participation in the JobKeeper Payment
A business must elect to participate in the JobKeeper payment. The first step is to Register your interest for the JobKeeper payment with the ATO. Please use the link below if you have not already registered
https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeepe
You will need to make an application to the ATO and provide information regarding your eligible employees and demonstrating the required downturn in your business. Enrolment for the JobKeeper payment for Employers or Business participants will be available online from 20 April 2020. You must enrol by the end of April to claim any JobKeeper payments for April.
Click below to access the ATO ‘Enrol and apply for the JobKeeper payment’ instructions.
Timing of JobKeeper Payments
The ATO have indicated that the payments will commence from early May 2020 and be backdated to 30 March 2020 for eligible employers.
The ATO must pay the JobKeeper payment no later than:
14 days after the end of the calendar month in which the fortnight ends or
14 days after the Commissioner is satisfied if the employer is eligible.
The amount will be a direct credit to a nominated bank account and will not be offset against tax liabilities unless the ATO so directs.
Temporary Changes to the Fair Work Act
There are also temporary changes to the Fair Work Act that employers should be aware of. This includes temporary changes to various awards and JobKeeper Fair Work Act changes. The changes give employers a broad discretion over work hours, timing of work, work location, taking leave and task allocation.
These changes are in place until 28th September 2020.
Below is a link to the updates and advice from the Fair Work Commission.
https://www.fwc.gov.au/about-us/coronavirus-covid-19-updates-advice
State Based Assistance
The Australian State and Territory governments have also announced Covid-19 stimulus packages to assist households and small business. These measures contain various concessions for businesses including grants, payroll tax and land tax relief. Below we have included links to pages that highlight the assistance on offer.
NSW
https://www.service.nsw.gov.au/campaign/covid-19-help-small-businesses
SA
https://business.sa.gov.au/COVID-19-business-information-and-support/Economic-response-package
QLD
https://www.business.qld.gov.au/covid-assistance
TAS
https://www.business.tas.gov.au/covid-19_business_support_packages
NT
https://nt.gov.au/industry/support-for-business/programs-and-initiatives
ACT
https://www.revenue.act.gov.au/covid-19-assistance
Please contact our office should you require further information specific to your situation on any of the measures we have highlighted above.