15 Apr What you need to know about JobKeeper Payments
It’s Now Legislated – JobKeeper Payments Initiative
What does it mean for you?
As you would be aware the Government is routinely announcing stimulus initiatives for the economy. As business and financial advisors we are focused on analysing and assessing the relevance of each for our clients.
One such initiative that will interest businesses with employees is ‘JobKeeper Payments’. Legislation for this was introduced and passed by Parliament on 8 April 2020.
Eligible businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees.
Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
Employers will be eligible for the subsidy if:
- Their business has a turnover of less than $1 billion and their turnover has been, or estimated will be, reduced by more than 30 per cent relative to a comparable period a year ago; or
- Their business has a turnover of $1 billion or more and their turnover has been, or estimated will be, reduced by more than 50 per cent relative to a comparable period a year ago; and
- The business is not subject to the Major Bank Levy.
The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.
Eligible employees are employees who:
- Are currently employed by the eligible employer (including those stood down or re-hired);
- Were employed by the employer at 1 March 2020;
- Was aged 16 years or older at 1 March 2020;
- Are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020
- Are an Australian citizen or the holder of a permanent visa (other specialised visa categories are also eligible. Check with us or visit treasury.gov.au for the full list).
- Were a resident for Australian tax purposes on 1 March 2020; and
- Are not in receipt of a JobKeeper Payment from another employer.
If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.
How do I apply?
You can register your interest via the ato.gov.au website, and once it is ready, fill in an online application form to register for the payments.
During the registration process, you will have to identify your projected turnover and provide information on your eligible employees. All eligible employees must receive, at a minimum, the amount of $1,500 per fortnight, before tax.
Self-employed businesses will be required to provide their ABN for their business and nominate an individual to receive the payment. The nominated individual must provide his/her TFN and provide a declaration to recent business activity.
Other business or remuneration structures
The Government realises that businesses can be structured in a number of ways and that sometimes the principals involved may not be paid a “wage” for their services, rather, receiving the amounts as trust distribution, dividends etc.
In these cases one person (partner, director, shareholder beneficiary etc) per business who is actively engaged in the business can nominate to receive the JobKeeper payment.
Ongoing reporting and maintenance
Once a business has met the eligibility criteria they will remain eligible until the end of the scheme regardless of whether their turnover remains down for the remainder of the scheme, conversely business who have not seen an immediate fall income may become eligible later in the scheme.
Every month you will be required to provide to the ATO information on the payments you have made to you employees and your turnover (don’t worry this does not affect you eligibility).
We can help you navigate eligibility, register your business and assist in ongoing reporting around this initiative.
Call us today on 02 4926 2699.