JobKeeper Payment – Update 3

Parliament passed the JobKeeper legislation on Wednesday 8 April 2020 which provided a framework for the Treasurer to make the rules for the scheme. On Thursday the treasurer legislated the rules for the scheme which will be administered by the Australian Taxation Office. Yesterday the Australian Taxation Office provided an update to how the scheme will work. The main points are below but we are still awaiting further clarification on some issues.

Main Points

  • Reduction in turnover of 30% (business < $1 Billion in turnover)
  • Turnover is GST turnover as defined in the GST act– but this is not necessarily what is reported on your BAS – ATO to provide further guidance
  • To meet turnover test when you enroll in job keeper you need to confirm that your business in a relevant period has had, or is likely to have the required fall in turnover
  • Can use actual GST turnover or projected GST turnover – ATO to provide further guidance
  • Once the test is satisfied you do not need to retest in later periods
  • 9 test periods (you choose)
    • March
    • April
    • May
    • June
    • July
    • August
    • September
    • 1 April to 30 June
    • 1 July to 30 September
  • Only receive payments for the fortnights starting in the relevant period when you qualify and beyond
  • To be eligible for the first fortnight starting 30 March 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 April to June 2020 quarter with GST turnover in April to June 2019 quarter
  • You can choose to test monthly or quarterly period regardless of your BAS reporting cycle
  • Ongoing monthly reporting requirements, monthly turnover, projected turnover, eligible employees – ATO to provide further guidance
  • ATO will allow alternative tests to establish eligibility in certain circumstances – ATO to provide further guidance
  • Eligible employees
    • Following employed at 1 March 2020 and still employed by the business during relevant jobkeeper fortnight
      • Full time employees
      • Part time employees
      • Casual employees with 12 months or more service (employed on a regular and systemic basis)
      • At least 16 years old on 1 March 2020
      • Australian or New Zealand citizens or permanent residents
      • Not receiving parental leave or Dad and partner pay
      • Not receiving workers compensation payments and unable to work
      • Have Agreed to be nominated by the business
    • Sole traders are eligible
    • One partner in a partnership is eligible if actively engaged in the business
    • One director or shareholder is eligible if actively engaged in the business
    • One adult beneficiary in a trust is eligible if actively engaged in the business
  • Employees stood down without pay under FairWork Act can be eligible
    • You need to pay the employees at least the minimum $1500 per fortnight for each claim
  • Terminated employees eligible if terminated after 1 March 2020 and you re engaged them
    • You need to pay the employees at least the minimum $1500 per fortnight for each claim
    • Confirm they want to be rehired and participate in jobkeeper scheme
    • You can only claim for the fortnight they were reengaged and forward, you can’t claim retrospectively for employees you reengage
  • You can Enrol from 20 April 2020
    • 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 our office.
    • Step 6 – From 20 April 2020, you can enrol 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).
  • You can Apply from 4 May 2020
    • Step 1 – Apply to claim the JobKeeper payment by logging in to the ATO Business Portal
    • Step 2 – Ensure you have paid each eligible employee a minimum of $1,500 per JobKeeper fortnight before tax.
    • Step 3 – Identify your eligible employees in the application form by
      • selecting employee details that are prefilled from your STP pay reports if you report payroll information through an STP enabled payroll solution, or
      • manually entering employee details in ATO online services or the Business Portal if you do not use an STP enabled payroll solution, or
      • using Williamson Partners who will submit a report on your behalf through Online services for agents.
    • Step 4 – Submit the confirmation of your eligible employees online and wait for your confirmation email or SMS showing it has been received.
    • Step 5 – Notify your eligible employees you have nominated them.
    • Step 6 – The ATO will pay you the JobKeeper payment for all eligible employees after receiving your application.
    • Step 7 – Each month, you will need to reconfirm that your reported eligible employees have not changed through ATO online services, the Business Portal or via Williamson Partners. This will ensure you will continue to receive the JobKeeper payments from the ATO. You do not need to retest your reported fall in turnover, but you will need to provide some information as to your current and projected turnover. This will be done in your monthly JobKeeper Declaration report.
    • Step 8 – If your eligible employees change or leave your employment, you will need to notify us through your monthly JobKeeper Declaration report.
  • If you use the ATO Business Portal, you will need a myGovID linked to your ABN in relationship Authorisation Manager (RAM). You can find out how to set this up at ato.gov.au/mygovid
  • You can opt out of the scheme at a later date
  • Need to be able to provide evidence to justify your projected turnover – “more likely than not” approach

More information can be found at https://www.ato.gov.au/general/JobKeeper-payment/