Jobkeeper Payment - Are you eligible and the info you need!
It may feel like months since lock-down began but it's only been weeks, some very tough weeks indeed! With the ATO (Australian Taxation office) opening up JobKeeper applications and encouraging eligible business to sign up, we are hoping to see some relief to the stress you and your small businesses are under.
The government estimates that 6 million workers will receive this payment. But with so much information rapidly changing, many business owners, especially sole traders are confused and struggling with how to apply for Jobkeeper. To help with this I will aim to keep this blog up to date so you have a handy place to come and check information. I have also added a heap of helpful resources and fact sheets at the bottom of the blog.
If there is any way I can help you please don't hesitate to get in touch.
>>Updated 4th May<<
We’ve updated the blog with new JobKeeper guides that include the latest information and the alternative test, find more helpful links at the bottom of the blog.
The ATO are experiencing high numbers of call, to reduce call times they have created a page with the answers to the most commonly asked questions about JobKeeper, early release of super and cash flow boost.
>>Updated April 30th<<
As you may know there is a rush to apply for JobKeeper. Businesses hoping to access JobKeeper wage subsidies for April will now have an additional month to enrol, after the Australian Taxation Office extended its application deadline to 31 May.
Previously, businesses looking to claim $1,500 JobKeeper payments for the fortnights between 30 March to 12 April, and 13 April to 26 April, were required to determine their eligibility and enrol by 30th April.
Employers have until 8 May to make top up payments for April, but can join the scheme at any time before 31 May. Jobkeeper is legislated to continue for up to six months.
Full time students aged 16 and 17 years old: A change to existing rules for full time students aged 16 and 17 years old who satisfy the basic eligibility criteria, will no longer be eligible for JobKeeper Payment unless they are financially independent. This change will apply prospectively, so employers who have made the minimum $1,500 to those students who will now be ineligible for the payment, are not financially disadvantaged. This change will have significant impact on the hospitality and retail industries but will no doubt be welcomed by small businesses struggling to find cash resources to fund up front payment of wages to eligible employees. Important Info before we get stuck in!
You must check that your business or not-for-profit organisation meets the eligibility requirements, including the turnover test. The turnover calculation is based on GST turnover. This applies even if an entity is not registered for GST.
You will need to compare the month of March 2019 with March 2020, April 2019 with April 2020 or you can compare quarterly by forecasting April, May and June 2020 with the same period in 2019, if you identify or forecast a 30% or greater drop in income then you may be eligible for JobKeepr payments.
Each month, you must report your Income and eligible employees in the business monthly declaration report.. This can be done through the Business Portal or via your registered tax or BAS agent.
Do I need to re-test each month?
I wanted to answer this question here as I understand there is confusion around this.
You only have to complete the test once!
Then you will need to provide information as to your current and projected GST turnover. This is not a retest of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment scheme. OK, grab a cuppa and lets jump in...
JOBKEEPER PAYMENT OVERVIEW JobKeeper is a Federal Government subsidy paid to eligible businesses effected by COVID-19 to cover the costs of their employee’s wages.
Affected employers will be able to claim a fortnightly subsidy payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months. This full amount of $1,500 must then be paid to all eligible employees, whether they are full time, part time or casuals.
Here is a brief summary of how the JobKeeper payments are made: • They are paid by the ATO within 14 days of month end. • The first payment will be on mid May 2020. • The eligible payroll periods are every 14 days, commencing 30 March 2020. • Employer payroll reporting is required to trigger the payment by the ATO – using Single Touch Payroll (STP)
The employer will continue to receive the subsidy payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the business.
Were employed by an eligible employer at 1 March 2020
Can be sole traders, full-time, part-time, or long-term casuals employed on a regular basis for longer than 12 months as at 1 March 2020.
Are at least 16 years of age, but those aged 16 or 17 must be financially independent to qualify
Are an Australian citizen, the holder of a permanent visa, a protected special category visa, a non-protected special category visa who has been residing continually in Australia for 10 years or more, or a New Zealander on a special category (subclass 444) visa.
Business Participation Entitlement Sole traders and some other entities (such as partnerships, trusts or companies) may be entitled to the JobKeeper Payment scheme under the business participation entitlement. A limit applies of one $1,500 JobKeeper payment per fortnight for one eligible business participant. Sole traders, one partner in a partnership, one beneficiary of a trust, and one director or shareholder of a company may be regarded as an eligible business participant. It's important that you let us know as soon as possible if you would like some assistance in making the jobkeeper claim and determine your drop in turnover or eligible employees.
STATE GOVERNMENT SUPPORT The ATO requires you to keep all records in relation to your JobKeeper claim for a 5 year period.
The ATO has specific actions that must take place within tight timeframes for an employer to receive the JobKeeper payment.
We have limited time to enrol you for JobKeeper (starting on 20 April 2020) and then making your first Application for JobKeeper Payments (starting on 4 May 2020).
OBLIGATIONS + RISKS FOR YOU If a wrong claim is made or if the ATO in the future decides that you were ineligible to receive the JobKeeper payment, the ATO will require you to repay them any JobKeeper payments that you have received plus penalties and interest. The key risks to you as the employer include: 1. The employer certifies the facts provided to the ATO and the JobKeeper claim made. 2. The employer receives significant JobKeeper payments over a 6 month period. For example, an employer with 10 employees would receive $195,000, and an employer with 20 employees would receive $390,000. 3. If the employer makes a mistake and is found to be ineligible by the ATO (for example, its turnover is not down by 30%), then they may have to repay all amounts received back to the ATO. 4. An employee ceases to be eligible if they cease employment during the life of this JobKeeper scheme. 5. Keep all records in relation to your JobKeeper claim for a 5 year period.
Make Correct Wage Payments to Eligible Employees – NOW
Ensure your payroll software is correctly set up to record JobKeeper “top up” payments
Pay the minimum $1,500 before tax to each eligible employee each fortnight (starting with the fortnight 30 March to 12 April) to be able to claim the JobKeeper payment for that fortnight
Continue to pay the minimum $1,500 to employees in every subsequent fortnight until 27 September 2020
If an employee is entitled to wages for the fortnightly periods above, you must ensure they are paid those wages in line with their contractual agreement and any applicable award or enterprise agreement. However, if they require a ‘top up’ to get to the minimum JobKeeper amount of $1,500, you can choose to pay this by the end of April.
Do we have to pay the full $1,500 per fortnight to all our employees? If you receive the JobKeeper payment for an employee, you must ensure that employee receives a minimum of $1,500 per fortnight, before tax. If you believe you cannot afford to make the payments, it would not be advisable to seek the JobKeeper payment. We recommend you seek advice from your accountant or contact me as to what your options may be in order to continue claiming the JobKeeper payment if it happens after the payments commence.
What about superannuation? Employers must continue to pay the superannuation guarantee on regular wages but it is up to employer whether they pay superannuation on additional jobkeeper payments.
Some helpful resources (We will keep these up to date)
I'm here to help...
I believe everyone will be feeling the effects of the COVID19 situation in some ways and I send my support. If you would like to chat do get in touch as I am here to help you.
JobKeeper tasks I can help with are:
assessing entity eligibility including performing turnover calculations
assessing employee eligibility and identifying eligible employees
enrolment with the ATO
ongoing payroll and ATO reporting requirements
reconfirming the eligibility of employees
reconciling JobKeeper payments received to initial claims.
You can also ask us about our business solution that has no big bills, just a manageable monthly fee that includes quarterly BAS and business analysis, tax planning and your end of year financials AND you can claim these expenses back at tax time✔️
Here are some other blogs you may find helpful.