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The JobKeeper scheme was announced by the governement on the following dates,

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• 30 March 2020: The $750 per week “JobKeeper” scheme is announced by the Prime Minister only in a summary form. The details from the government was yet to be finished.

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• 08 April 2020: A special one-day sitting of Parliament approved the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020

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• 14 April 2020: ATO announces further rules in relation to eligibility and obligation of the JobKeeper scheme  

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• 20 April 2020: Jobkeeper registration commenced with the ATO (by Business Portal or Tax Agent's Online Services for Agents)

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|  What is JobKeeper (current at 15 April 2020)?  

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• The JobKeeper payment is intended to assist businesses affected by the coronavirus to cover the costs of wages of their employees. 

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• Once an employer decides to participate in the JobKeeper scheme, in general, all eligible employees MUST be covered and eligible employees cannot be selected. 

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• The JobKeeper program is to be administered by the ATO

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• It will be eligible to employers, where the business turnover is less than $1Billion and has lost 30% or more of revenue (50% or more if turnover in excess of $1Billion & 15% or more for Charities registered with the Australian Charities and Not-For-Profit Commission)

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• The JobKeeper scheme starts on 30 March 2020 and ends on 27 September 2020. 

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• It is a condition of entitlement that the business has paid salary and wages of at least $1,500 to the employee in the fortnight (even if their usual wage is below this amount) 

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• The ATO pays the JobKeeper payment to entities shortly after the end of each calendar month, for fortnights ending in that month.

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• A business can also be entitled to a JobKeeper payment for one business participant who is actively engaged in operating the business

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• If eligible, the first payment should be received by employers from the ATO in May and back paid from 30 March 

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• Eligible employers will need to identify and nominate eligible employees for this payment to the ATO 

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• Employees are not eligible for both 'JobKeeper' and 'JobSeeker' payments

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• Employers and the self-employed can register their interest in applying for the payment from 30 March 2020

 

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|  (1) Eligible Business & Business Turnover Test  

 

There are no legal requirements should a business decide not to participate in the JobKeeper scheme and this would be an individual decision for each employer.

However, if the business choose to participate in the scheme, the eligibility requirements for the business are as follows,

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• On 1 March 2020, a business was carried on in Australia (or were a not-for-profit organisation that pursued your objectives principally in Australia).

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• Employed at least one eligible employee on 1 March 2020.

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• Eligible employees are currently employed by the business for the fortnights you claim for (including those who are stood down or re-hired).

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• Not an "ineligible" employer (see list => HERE)

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• The business meets the "Business Turnover Test" (see BELOW)

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The business will need to satisfy the decline in turnover test of more than 30% (50% for large groups) by comparing the GST turnover. To calculate a fall in turnover for JobKeeper eligibility for the first fortnight starting 30 March 2020, any of the following can be compared with the corresponding period in 2019.

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• the whole of the month of March 2020 with March 2019

• the whole of the month of April 2020 with April 2019　

• the whole quarters for 1 April ~ 30 June 2020 with 1 April ~ 30 June 2019　

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The above will not depend on whether the BAS are lodged monthly or quarterly and we assume that besides for the March comparison it will based on a self-assessed projection.

Once the business satisfies the decline “Business Turnover Test”, it does not need to retest its turnover in later months. However, the business will need to notify the ATO of its current GST turnover for the reporting month and its projected GST turnover for the following month. According to the rules, this information will not affect the business’ eligibility, nor will it be used to verify whether the projection given as part of the decline in turnover test was accurate.

 

As care is required for the following areas when registering for JobKeeper, our view is for businesses to discuss with a registered Tax Agent on their eligibility criteria before completing the registration process with the ATO.

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• How to calculate or estimate reduction based on GST turnover

• How to maintain records from accounting records as proof of the reduction to your turnover 

 

Also, one particular area which is still unclear is how the ATO will be the applying an alternative turnover test for businesses that demonstrate there is no appropriate comparison period for the decline in turnover. We are hoping that the ATO will consider additional factors such as,

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• where the business was not operating a year before

• if the previous year's turnover was not representative of its usual turnover

• if a business has ceased

• its operations have significantly reduced

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As the applications will require employers to make an estimate about expected fall in turnover, the government has advised there will be some tolerance if the actual fall is slightly smaller than that estimated by the employer.
 

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|  (2a) Eligible employees  

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The following employees will be eligible for the payment,

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• Are currently employed by the eligible employer (including those “stood down” or “re-hired” – not terminated employees)

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• Were employed by an eligible employer at 1 March, 2020

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• A full-time or part-time employed as at 1 March 2020

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• A long-term casuals who have been employed on a regular and systematic basis for more than 12 months as at 1 March and not a permanent employee of any other employer

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• Are at least 16 years old

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• Are an, 

  • 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

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• 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.

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• Employee to agree that they have not been nominated as an eligible employee with another employer by completing the “JobKeeper employee nomination notice” (click LINK to download from the ATO) and

  • to avoid any potential discrimination issues, should be provided to ALL current employees even if they are not eligible (they can simply select “NO” or not return the form)

  • the signed nomination notice is not required to be sent to the ATO but will be required before any employee receive any “top-up” payments

 

Employee will not be eligible for the JobKeeper payment,

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• receiving a JobKeeper payment from another employer

• employment commenced after 1 March 2020

• casual employees who have been hired for less than 12 months

• casual employees if they don’t work on a regular and systematic basis

• most non-residents visa holders

 

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|  (2b) Business Participants  

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A business can also be entitled to a JobKeeper payment for one business participant who is actively engaged in operating the business as follows,

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• For Sole Traders 　   ⇒ the proprietor

• For Partnerships        ⇒ 1 x partner

• For Companies          ⇒ 1 x non-executive director or shareholder

• For Trust 　　　        ⇒ 1 x nominated beneficiary

 

The above entities will be eligible,

 

• if they carried on a business in Australia on 1 March 2020;

• satisfied the fall in turnover test;

• had an ABN on 12 March;

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Also it had lodged, on or before 12 March 2020, at least one of,

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• a 2018–19 income tax return showing that it had an amount included in its assessable income in relation to it carrying on a business, or

• an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that it made a taxable, GST-free or input-taxed sale.

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ATO also has the discretion to give further time, but only in limited circumstances, including if:

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• there was no requirement to lodge a 2018-2019 return until after 12 March 2020 or

• have deferred your lodgement under an extension of lodgement date

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Also for sole traders, the individual

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• must be at least 16 years old

• must be an, 

  • Australian resident (within the meaning of the Social Security Act 1991) – visit the Services Australia website and read residence descriptions for more details

  • 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

• was 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.

• must not be an employee (other than a casual employee) of another entity.

• must not have given another entity, a JobKeeper nomination notice.

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It will be the entity, not the eligible business participant, that will receive the JobKeeper payment from the ATO and will form part of the assessable income of that entity (for a sole trader, it will be received for their own funds). Therefore, while eligible employees have to be paid a wage/salary of a minimum of $1,500 per fortnight, there is no equivalent condition for eligible business based on business participation and there is no requirement to pay it out or pay it to the nominated individual. As such, for a company or a trust, there is no requirement for the entity to register for,

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• register for PAYG withholding

• start reporting through Single Touch Payroll or

• pay salaries and wages to the individual (not possible anyway for a sole trader or a partner in a partnership)

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Also, eligible business participants will need to download and complete the following notices (not required to be submitted to the ATO but maintain in file for 5 years),

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• Sole Traders (JobKeeper employee nomination notice)

• Partnership, trust or company  (JobKeeper eligible business participant nomination notice - excluding sole trader)

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Entities that are eligible for payments for either the fortnights starting 30 March 2020 or 13 April 2020 will need to enrol by 30 April 2020. 

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|  (3) Payments to employees (including JobKeeper portion)  

Payments of a minimum $1,500 (before tax) is required to be paid to an employee before the ATO will refund the JobKeeper payment. 

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However, for the following periods, the ATO will accept a ONE OFF exception that the minimum $1,500 (before tax) has been paid for each of the first two fortnights even if it has been paid late, provided it is paid by the end of April 2020.

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• 30 March ~ 12April 2020 

• 13 April ~ 26 April 2020

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This means that employee will be covered if by the end of April 2020, the “JobKeeper employee nomination notice” (see link) is signed & return to the employer and the business completes the following,

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• fortnightly payment of at least, $1,500 x 2 (before tax) or 　

• a combined payment of at least $3,000 (before tax)

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|  (4) Reporting requirements to ATO  

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Registration for JobKeeper to be completed during the following dates.

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• 20 ~ 30 April 2020 ⇒ Registrations to commence JOBKEEPER using the Business Portal (alternatively Tax Agents could do so on behalf of the business) 

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• 04 ~ 31 May 2020 ⇒ Application to claim the first two fortnight payments by submitting an online report

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|  Potential cashflow issues from JobKeeper  

Also as noted, it is a condition of entitlement that the business has paid salary and wages of at least $1,500 to the employee in the fortnight (even if their usual wage is below this amount). 

 

From this, we anticipate that businesses may face potential cash flow issues to fund JobKeeper until it is later reimbursed by the ATO (said to be monthly in arrears).

 

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|  Our suggestion for to avoid any potential issues:  

 (Current as at 20 April 2020 - however, please seek your own professional advice) 

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(ASAP): Complete your bookkeeping records up to the end of March 2020

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(ASAP): Provide the "JobKeeper employee nomination notice" for ALL employees should you feel that your business turnover has reduced by 30% or more  (employees to sign & return to employer by 30 April 2020)

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(Before 30 April 2020): Discuss with a registered Tax Agent on your businesses' eligibility & ATO registration process 

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(Before 30 April 2020 or once eligibility confirmed): If not done so, pay the minimum of $1,500 fortnight payment for the 2 periods in April, should the business be eligible for JobKeeper from 30 March 2020

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(Also may require assistance from a registered Tax Agent):

• If a fall in revenue to meet the “Business Turnover Test” is not expected until the month of May 2020 or quarterly commencing July 2020

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• How to handle "top-up" JobKeeper payment in Single Touch Payroll

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Also, the actual JobKeeper requirements for the following cases are quite completed and we advise that the business seeks professional advice for how to handle each situation.

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• Eligible employees are completely "stood down “or on unpaid leave

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• Eligible employees usually earn less than are $1,500 per fortnight

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• Eligible employees who are terminated or rehired

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• Eligible employees who are under "JobKeeper enabled direction" (New to the Fair Work Act)

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Disclaimer: 

Information based on facts we have summarised to the above updated date. We have not considered your personal circumstances and should you wish to consider it, please seek professional advice.

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