Update on JobKeeper Payment

The Government’s $130b Jobkeeper Package was passed in Parliament yesterday. However we still await ATO guidelines for some of the finer details, particularly how the reduction in turnover will be assessed.

Some of the key points and new developments/clarifications are:

To be an eligible employer, you will need to assess that you have or are likely to experience the required turnover decline of 30%. It appears that the ATO will have discretion in assessing this and a degree of flexibility,
The relevant period for assessment of your turnover will depend on how you report your BAS – for most businesses this will be quarterly relative to their turnover in a corresponding period a year earlier. Turnover is calculated as it is for GST purposes and is reported on Business Activity Statements.
Initial registration of your interest for the Jobkeeper Payment with the ATO is required and you will then subsequently be required to complete online application (not yet available – we imagine that the ATO will contact all of the businesses that have registered to advise them how and when to complete the online application),
- The Jobkeeper payment is available to self employed people who will be eligible to receive one JobKeeper Payment. This means that:
  - where the business operates through a sole trader structure – one owner can be nominated to receive the JobKeeper Payment;
  - where the business operates through a partnership – one partner can be nominated to receive the JobKeeper Payment;
  - where the business operates through a company – one director can be nominated to receive the JobKeeper Payment;
  - where the business has shareholders who provide labour to the company and receive dividends in lieu of wages – one such shareholder can be nominated to receive the JobKeeper Payment; and
  - where the business operates through a trust – one individual beneficiary (that is, not a corporate beneficiary) can be nominated to receive the JobKeeper Payment.
  - The nominated individual must be at least 16 years of age and an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) visa holder and a resident for Australian tax purposes on 1 March 2020. Payments will be made to the nominated individual monthly in arrears by the ATO.
  - We urge self employed business owners to now register if their turnover meets or is likely to meet the turnover decline of 30%.
  - It appears that self employed people (whose business meets the eligibility criteria) and already pay themselves a wage (not drawings) will be entitled to the Jobseeker Payment and that if there are two or more business owners already taking a wage then all would be entitled to the Jobkeeper Payment. However, please note that the Government has made it quite clear that it will not entertain any schemes where business owners add themselves to the payroll in to obtain the payment where they would not normally be entitled to it. The ATO will be able to monitor such activity through Single Touch Payroll.
- You must ensure that each eligible employee receives at least $1,500 per fortnight (before tax). Employees who receive $1,500 per fortnight or more from their employer will continue to receive their regular income according to their prevailing workplace arrangements. For employees that have been receiving less than this amount, the employer will now need to pay them, at a minimum, $1,500 per fortnight before tax.
- You must notify all eligible employees that you are receiving the JobKeeper Payment.
- You must continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
- Most businesses are now using Single Touch Payroll, with the exception of self employed businesses with no employees or employees that are family members or the business owners which have an exemption to 30 June 2020. If should currently be but aren’t using Single Touch Payroll, we urge you to contact us asap so that we can assist you to set this up as it appears that the Jobkeeper Payment will be administered largely through STP. We are unsure at this stage how this will apply to those with an exemption and will provide further information on this when it is available.
- The payments will commence n the first week of May and will be backdated to March so employers will need to fund the payments in the meantime (refer to our previous circulars which can be found in the News Section of our website http://staaccountants.com.au/news/ or on our Facebook Page).