The bill that included the JobKeeper Payment Scheme has passed as law on 8 April 2020.
The JobKeeper Payment is a wage subsidy that enables eligible employees and active business participants to receive a minimum fortnightly gross payment (before tax) of $1,500 through their eligible employers or businesses for a period of up to six months, commencing first week of May 2020. The payments will be received monthly in arrear.
Who Is Eligible?
A. For businesses that hire employees
An employer will be eligible to receive the JobKeeper Payment in relation to an eligible employee, if at the time of applying:
Aggregated annual turnover of $1 billion or less: the employer estimates that their projected GST turnover has fallen or is likely to fall by 30% or more; or
Aggregated annual turnover of more than $1 billion: the employer estimates that their projected GST turnover has fallen or is likely to fall by 50% or more
Is not specifically excluded
An eligible employee is one who satisfies the following requirements:
Currently employed by the employer including one who has been stood down or re-hired
Employed by the employer as at 1 March 2020 on the basis of:
Full-time, or
Part-time, or
Long term casual who has been employed on a regular basis for over 12 months and is not a permanent employee of another employer
At least 16 years old as of 1 March 2020
Australian resident for social security purposes (i.e. an Australian citizen or holder of a permanent visa, etc.)
Has not given a nomination notice to any other employers (i.e. the employee can only receive the JobKeeper Payment from one employer)
Not receiving government-funded parental leave pay or dad and partner pay, and is not fully supported by a works’ compensation scheme
If eligible for the JobKeeper Payment, the employer must also satisfy the wage condition, which means:
If the employee’s normal fortnightly pay is $1,500 or more: the employer must continue to pay the employee their regular wages;
If the employee’s normal fortnightly pay is less than $1,500 or has been stood down after 1 March 2020, the employer must now make gross payment of $1,500 to the employee (less any PAYG withholding)
The payments must be made by the end of each fortnight starting from 30 March 2020, with the exception that the first two fortnightly payments (for the fortnights ended 12 April and ending 26 April 2020) can be made by the end of April as a transitional measure.
B. For businesses with active business participants
The Government also recognises that some business owners are actively involved in the operation of the business without receiving regular payments in the form of wages and salary, and they have also been affected by COVID-19. As a result, the payment can also be provided to an eligible business participant who can be either:
A sole trader
An individual partner of a partnership
A director or individual shareholder of the company, or
An adult beneficiary of a trust
It is important to note while a business might have more than one business participant, only one can be nominated to receive the Payment.
To be eligible, the business must satisfy all the following conditions:
It meets the decline in turnover test, discussed above, and
The business had an ABN as of 12 March 2020 and either:
Has reported assessable income in its 2019 income tax return lodged on or before 12 March 2020 (or a later time as allowed by the Commissioner), or
Made a supply and reported it in a lodged business activity statement (BAS) during the period 1 July 2018 to 12 March 2020
The nominated business participant also needs to satisfy the following conditions:
Actively engaged in the business as of 1 March 2020, and
Not entitled to another JobKeeper Payment, and
Not a permanent employee of another employer, and
16 years old or over
Is a resident of Australia for social security purchase as of 1 March 2020, or a holder of Subclass 444 visa
How to Establish Decline in Turnover?
The business needs to compare its projected GST turnover in the current period (either monthly or quarterly from 1 March to 30 September 2020) to the corresponding period in 2019, and decide whether it has decreased by 30% (or 50%) or more. The JobKeeper Payment will be available from the period when the decline in turnover test is satisfied. For example, if an entity estimates that its projected GST turnover will fall for more than 30% in June 2020 comparing to June 2019, it will be eligible for the Payment from June 2020, provided other conditions are also met.
The GST turnover here is the value of all supplies made during the relevant period (not necessarily cash sales received even if an entity is registered for GST on a cash basis).
Note that an entity is not required to be registered for GST to pass this test.
The business needs to keep record that can substantiate the claim.
How to Apply?
The following steps are to be followed to enrol for the JobKeeper Payment:
Step 1 – register your interest and subscribe for update at https://www.ato.gov.au/Job-keeper-payment/
Step 2 – check your eligibility
Step 3 – continue to pay at least $1,500 to your employees by the end of each fortnight starting from 30 March 2020
Step 4 – notify your eligible employees that you are intending to claim the Payment on their behalf, and send them the JobKeeper employee nomination notice to complete, the form can be downloaded at https://www.ato.gov.au/Forms/JobKeeper-payment---employee-nomination-notice/
Step 5 – enrol with the ATO from 20 April 2020 using the Business Portal (authenticated by your myGovID), this must be completed by the end of April if the Payment is claimed for April 2020
Step 6 – complete the online form
Once successfully enrolled, the employer needs to confirm (available from 4 May 2020) the eligible employees by the following steps:
Step 1 – apply to claim the JobKeeper Payment on the Business Portal
Step 2 – identify the eligible employees in the application form
Step 3 – submit the application form
Step 4 – notify your employees that they have been nominated
Step 5 – reconfirm the eligible employees each month on the Business Portal and report any changes
Anti-avoidance Provisions
If you make changes to your current remuneration arrangement or business structure for the sole purpose of obtaining the JobKeeper Payment, you will be caught by the anti-avoidance rules and the Payment denied or recalled.
Disclaimer
All information provided in this publication is of a general nature only and is not personal financial or investment advice. It does not take into account your particular objectives and circumstances. No person should act on the basis of this information without first obtaining and following the advice of a suitably qualified professional advisor. To the fullest extent permitted by law, no person involved in producing, distributing or providing the information in this publication will be liable in any way for any loss or damage suffered by any person through the use of or access to this information.
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