JobKeeper Extension

Many would agree that JobKeeper has been a lifeline for many businesses through the COVID19 Pandemic.

The current JobKeeper program is due to come to an end on 27 September 2020 and with the crisis continuing and further lockdowns in Victoria, the Federal Government announced an extension to JobKeeper out to 28 March 2021.

Please note that none of the changes below have passed through parliament at the time of this article being written. Further updates will be provided, if any, once these changes have passed through parliament.

What has changed with Business Eligibility?

From 28 September 2020, all businesses and not-for-profits will need to re-assess their eligibility to be eligible from 28 September to 3 January 2021 and then re-assess again to be eligible from 4 January 2021 to 28 March 2021

Eligibility will be assessed as follows:

 JobKeeper Extension period 28 September 2020 to 3 January 2021:

  • Eligibility re-assessment based on Actual Turnover during the September 2020 quarter (1 July 2020 to 30 September 2020)

JobKeeper Extension period 4 January 2021 to 28 March 2021:

  • Further Eligibility re-assessment based on Actual Turnover during the December 2020 quarter (1 October 2020 to 31 December 2020)

Alternative tests are yet to be released for businesses and not-for-profits who don’t have a suitable comparison period to assess decline in turnover

What has changed with Employee Eligibility and payment rates?

  • The reference date for assessing which employees are eligible for the JobKeeper Payment is now 1 July 2020 with effect from 3 August 2020.
  • From 28 September 2020 to 3 January 2021, the payment rates will be the following:
    • $1,200 per fortnight for all eligible employees who, in the four weekly pay periods before the reference period, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for more than 20 hours per week
    • $750 per fortnight for employees who were working in the business or not-for-profit for less than 20 hours a week on average and business participants who were actively engaged in the business less than 20 hours per week in the reference period.
  • From 4 January 2021 to 28 March 2021, the payment rates will be the following:
    • $1,000 per fortnight for all eligible employees who, in the four weekly pay periods before the reference period, were working in the business or not-for-profit for 20 hours or more a week on average and for business participants who were actively engaged in the business for more than 20 hours per week
    • $650 per fortnight for employees who were working in the business or not-for-profit for less than 20 hours a week on average and business participants who were actively engaged in the business less than 20 hours per week in the reference period.
  • The reference period for employees regarding their hours worked to determine their tier of payment will be the two fortnightly pay periods prior to 1 March 2020 or 1 July 2020. The period with the higher number of hours is to be used for employees who were eligible at 1 March 2020.

Please note that the current JobKeeper program continues to run until 27 September 2020 and if you have not enrolled in the program, however feel that your income is declining due to the Stage 4 lockdowns in Victoria or if you have any further questions in relation to the JobKeeper Extension please feel free to contact us for assistance.

Fact Sheet – JobKeeper Payment Extension

JobKeeper – Further Information

Most people who have already registered their interest in the JobKeeper payment would have received over the past few days, further information from the Australian Taxation Office (ATO).
 

The ATO has released a large amount of information and further detail relating to the JobKeeper Payment on their website. The three areas that we will focus on are:

  • Employer Eligibility Criteria
  • Employee Eligibility Criteria
  • Enrolling in the JobKeeper Payment (from 20 April)

Most of the information below is taken directly from the ATO website and is accurate at the time of this article being published. For further information please visit the ATO JobKeeper web page.

Before we go into the three points above, below are some key points on the JobKeeper payments:

  1. If you are a business expecting a JobKeeper payment for the month of April you should already be paying your employees $1,500 per fortnight. You must ensure that your business is eligible first.
  2. For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by you by the end of April. This means that you can make two fortnightly payments of at least $1,500 per fortnight before the end of April, or a combined payment of at least $3,000 before the end of April
  3. Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to your registered tax agent if you are using one.
  4. Ensure your payroll system has the appropriate pay codes and descriptions setup to make the payments. You will need to contact your Software provider to clarify this.
  5. Determine your businesses eligibility and ensure you have adequate documentation to prove that you are eligible and your fall in turnover is due to COVID-19.
  6. Pay your employees the correct amount and in accordance with the JobKeeper fortnights. Please contact us if you require further information about how and when to pay.
  7. Sole Traders and Business Owners who are not employees but actively involved in their business are also eligible. We will provide further information soon about the eligibility.

Employer Eligibility Criteria

Employers will be eligible for the JobKeeper payment if all of the following apply:

  • On 1 March 2020, you carried on a business in Australia or were a not-for-profit organisation that pursued your objectives principally in Australia.
  • You employed at least one eligible employee on 1 March 2020.
  • Your eligible employees are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired).
  • Your business has faced a
    • 30% fall in turnover (for an aggregated turnover of $1 billion or less)
    • 50% fall in turnover (for an aggregated turnover of more than $1 billion), or
    • 15% fall in turnover (for ACNC-registered charities other than universities and schools).
  • Your business is not in one of the ineligible categories.

Most Businesses will be subject to the 30% decline in turnover test to be eligible for the JobKeeper Payment.

To work out your fall in turnover, you can compare either:

  • GST turnover for March 2020 with GST turnover for March 2019;
  • projected GST turnover for April 2020 with GST turnover for April 2019;
  • projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019.

If your business does not qualify now, it may qualify in the future so it is important to monitor your trading and projections regularly.

If your business does not have a comparable period, for example because your business is newly established, the Commissioner of Taxation will have discretion to set “Alternative Tests”. Further information on the alternative tests is not yet available and will be released by the ATO in due course.

Please note that the ATO have advised that they will be expecting you to have strong records to prove that your business meets the eligibility criteria. If you are audited in the future and can not prove your eligibility, penalties will apply and there may be a requirement to repay the JobKeeper payments back to the ATO.

Employee Eligibility Criteria

You are an eligible employee if you:

  • are currently employed by the eligible employer (including if you were stood down or re-hired).
  • were for the eligible employer (or another entity in their wholly owned group), either a
    • permanent full-time or part-time employee at 1 March 2020
    • long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020 and not a permanent employee of any other employer.
  • were aged 16 years or older at 1 March 2020.
  • were either
    • an Australian resident (within the meaning of the Social Security Act 1991) – visit the Services Australia website and read residence descriptions for more details
    • an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
  • were not in receipt of any of these payments during the JobKeeper fortnight
    • government parental leave or Dad and partner pay under the Paid Parental Leave Act 2010
    • a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work.

If you started work with your current employer after 1 March 2020, your employer will not be eligible to claim the JobKeeper payment on your behalf.

Enrolling in the JobKeeper Payment (from 20 April 2020)

You or a registered tax professional can enrol for the JobKeeper payment:

  • Step 1 – Register your interest and subscribe for JobKeeper payment updates.
  • Step 2 – Check you and your employees meet the eligibility requirements.
  • Step 3 – Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).
  • Step 4 – Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.
  • Step 5 – Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to your registered tax agent if you are using one.
  • Step 6 – From 20 April 2020, you can enrol with us for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.
  • Step 7 – In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader.
  • Step 8 – Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).

If you prefer to engage our office to administer the JobKeeper program on your behalf with the ATO please click here and opt-in. We will then contact you with further information.

 

JobKeeper Payment Explained

The Government announced yesterday a JobKeeper Payment for businesses significantly impacted by the Coronavirus. This payment is a subsidy provided by the Federal Government that affected businesses can access to give them the ability to continue paying their employees. This payment will also be made available to the self-employed.

An Eligible business will be provided with $1,500 per fortnight per eligible employee for up to 6 months.

This subsidy will start on 30 March 2020.

Who is an Eligible Employer?

  • Turnover less than $1 billion and turnover has reduced by more than 30% relative to a comparable period a year ago
  • Turnover more than $1 billion and turnover has reduced by more than 50% relative to a comparable period a year ago
  • Employer is in an employment relationship with an eligible employee as at 1 March 2020 and the employee is currently engaged
  • Not-for-profit or self-employed/sole trader who meet the above turnover test

Who is an Eligible Employee?

  • Currently employed by the eligible employer (including stood down or re-hired)
  • Employed by the employer at 1 March 2020
  • Full-time, part-time or a long-term casual (a casual employed on a regular basis for more than 12 months)
  • 16 years of age or older
  • An Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder
  • Not receiving the JobKeeper payment from another employer

How will it be paid?

  • $1,500 will be paid directly to the Eligible Employer for each Eligible Employee per fortnight.
  • The payments will be made to the employer monthly in arrears by the ATO
  • The Payment is before tax and employers can top up the payment if they wish to do so
  • Employees will be paid in the following manner:
    • For an employee who usually receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their current workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employees.
    • For an employee who usually receives less than $1,500 in income per fortnight before tax, their employer must pay their employee a minimum $1,500 per fortnight, before tax.
    • For employees who have been stood down, their employer must pay their employee a minimum $1,500 per fortnight, before tax.
    • For employees who were employed on 1 March 2020, then ceased employment with their employer, and then been re-engaged by the same eligible employer, the employee will receive a minimum $1,500 per fortnight, before tax.

When will the first payments be paid by the ATO?

First payments will be paid to eligible employers by the ATO in the first week of May.

How does a business apply?

Businesses with employees can register their interest in the JobKeeper Payment from 30 March 2020 by following the below register link below.

Eligible employers who register will be able to apply for the subsidy via an online application and will need to identify the employees eligible for the JobKeeper payments.

Businesses without employees (self-employed/sole traders) can register their interest in the JobKeeper Payment from 30 March 2020 by also following the below register link.

Eligible businesses without employees who register will be able to apply online and will need to provide their ABN, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration of their recent business activity.

REGISTER YOUR INTEREST IN JOBKEEPER

As usual please feel free to contact us to discuss your individual situation and for further advice on the above.