JobKeeper Guidelines

 

The main features of the JobKeeper Payment measures are as follows:

–       Eligible employers will receive $1,500 per fortnight per eligible employee for six months. This is to be offset against the employee wages, or to be passed on in full, if the payment is in excess of the wages.

–       In order to be eligible, the employer has to estimate that their business turnover has or will decline by 30% or more. For charities registered with the Australian Charities and Not-For-Profit Commission (ACNC) where estimated turnover has or will likely fall by at least 15% relative to a comparable period. Turnover is currently defined to be according to the employer’s current calculation for GST purposes as reported on Business Activity Statements. Therefore, only Australian based turnover is relevant. As the definition refers to turnover as defined under GST, all taxable supplies and GST-free supplies such as exports will be included. But input-taxed supplies like interest income will not be included.

–       Eligible employees have to be full-time, part-time, long-term casuals or recently stood down employees on the business payroll as of 1 March 2020. Long-term casuals have to be employed regularly for at least 12 months as of 1 March 2020. The employee must be aged 16 years or older, an Australian citizen, holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder, and a resident of Australia for tax purposes as of 1 March 2020.

 

Other Key Factors regarding eligibility for the JobKeeper Payment:

 

–       Employees must continue to be employed

Employers can only claim the JobKeeper Payment for eligible employees that were in their employment on 1 March 2020 and continue to be employed while the employer is claiming the JobKeeper Payment. Employees who ‘continue to be employed’ include employees who have been stood down or rehired but does not include those who have been made redundant or terminated.

–       The first cash subsidy to be received in May 2020

The JobKeeper Payment will be available from 30 March 2020 for a six-month period until 27 September 2020, with the first payments by the ATO being received by employers in the first week of May. This creates a cash flow issue for those employers who do not have the funds to pay employees prior to May. The Government suggests that those businesses may want to speak to their bank to discuss their options.

 –       Employers must pay their eligible employee

Importantly, employers will need to pay their eligible employees a minimum of $1,500 per fortnight in the scheme payment periods, commencing on 30 March 2020.

If the employer has stood down eligible employees without pay after 1 March 2020, the employer can ‘back pay’ the employees to 30 March 2020 and will be eligible to claim the JobKeeper Payment for these employees for each 14 day period.

 –       Enforcement of compliance

Employers must pass the full $1,500/fortnight subsidy on to each eligible employee, even if the employee did not previously earn that amount.  Enforcement and compliance to ensure the JobKeeper Payment is passed on to employees will be done by the ATO.

 –       Self-Assessment if turnover falls

The ATO will issue guidance about the self-assessment process of determining actual and anticipated falls in turnover.  Further, it has been clarified that an employer who may not initially be eligible to apply at the commencement of the scheme on 30 March 2020, may apply to receive JobKeeper payments at a later time, if their turnover subsequently falls. However, the payments will not be backdated to 30 March 2020, but will commence from when they became eligible.

 –       Application for Commissioner’s discretion

Where it would appear not evident using the comparable period approach to substantiate a fall in turnover or where the Commissioner does not in the first place grant the subsidy, an employer has an ability to apply for the Commissioner’s discretion, in specific circumstances 

–       Employers must elect to participate

An application to the ATO will be needed when further details are announced and provide supporting information demonstrating a downturn in their business.

–       Unpaid owner managed and family employees

Partnerships can only nominate one partner to receive the payment and a partner cannot be an employee.

In relation to trusts where beneficiaries of a trust only receive trust distributions, rather than being paid salary and wages for work done, one individual beneficiary can be nominated to receive the payment.

Companies with an eligible business can nominate only one director to receive the payment if they are not paid as an employee.

An eligible business that pays shareholders by way of dividends rather than paid as an employee can nominate one shareholder.

 –       Sole traders

People who are self-employed (as sole traders) will be eligible for the payment where at the time of applying;

–       they were actively engaged in the business;

–       estimate their turnover has or will fall by 30 per cent or more;

–       had an ABN on or before 12 March 2020; and

–       meet conditions relating to assessable income or supplies for GST purposes during the period to 12 March 2020.

 

Astro Tax is not licensed to provide financial product advice under the Corporations Act and taxation is only one of the matters that must be considered when making a decision on a financial product. You should consider taking advice from an Australian Financial Services Licence holder before making a decision on a financial product.

 

The information contained in this document is of a general nature and is not intended to address the objectives, financial situation or needs of any particular individual or entity. It is provided for information purposes only and does not constitute, nor should it be regarded in any manner whatsoever, as advice and is not intended to influence a person in making a decision, including, if applicable, in relation to any financial product or an interest in a financial product. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

 

To the extent permissible by law, Astro Tax and its associated entities shall not be liable for any errors, omissions, defects or misrepresentations in the information or for any loss or damage

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