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COVID-19 JobKeeper Payment Subsidy Program

Start With The End In Mind

JOBKEEPER PAYMENT SUBSIDY PROGRAM

As you will have all heard by now the Federal Government has announced their third round of economic measures to support business and individual how have been heavily impacted by the economic havoc caused by forced business shutdowns.

We have extracted the following information direct from Treasury’s Fact Sheet released last night which gives a summary of how the subsidy program is intended to work and how your business can apply for registration. Later today we will be lodging actual applications with the ATO on behalf of some clients and determine the type of “proof” the ATO will require to support the business claim of a 30% or more decline in turnover. As we gather more detail on this actual process, we will keep you updated regularly.

Treasury Notes – Information for Employers

To receive the JobKeeper Payment, employers must:

  • Register an intention to apply on the ATO website and assess that they have or will experience the required turnover decline.
  • Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired).  The ATO will use Single Touch Payroll data to pre-populate the employee details for the business where available.
  • Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.
  • Notify all eligible employees that they are receiving the JobKeeper Payment.
  • Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

Background On Jobkeeper Payment

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 will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); 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 (any new employee engaged after 1 March 2020 is not eligible).

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

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.
  • 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);

 

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.

APPLICATION PROCESS

Businesses with employees:

Initially, employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020.

Subsequently, eligible employers will be able to apply for the scheme by means of an online application. The first payment will be received by employers from the ATO in the first week of May.

Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.

Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.

It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Further details for businesses with employees will be provided on ato.gov.au.

Businesses without employees:

Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via ato.gov.au from 30 March 2020.

Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.

People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.

Further details for the self-employed will be provided on ato.gov.au.

Employer with employees on different wages example:

Adam owns a real estate business with two employees. The business is still operating at this stage, but Adam expects

that turnover will decline by more than 30 per cent in in the coming months. The employees are:

• Anne, who is a permanent full-time employee on a salary of $3,000 per fortnight before tax and who continues

working for the business; and

• Nick, who is a permanent part-time employee on a salary of $1,000 per fortnight before tax and who continues

working for the business.

Adam is eligible to receive the JobKeeper Payment for each employee, which would have the following benefits

for the business and its employees:

  • The business continues to pay Anne her full-time salary of $3,000 per fortnight before tax, and the

business will receive $1,500 per fortnight from the JobKeeper Payment to subsidise the cost of Anne’s

salary and will continue paying the superannuation guarantee on Anne’s income.

  • The business continues to pay Nick his $1,000 per fortnight before tax salary and an additional $500 per

fortnight before tax, totalling $1,500 per fortnight before tax. The business receives $1,500 per fortnight

before tax from the JobKeeper Payment which will subsidise the cost of Nick’s salary. The business must

continue to pay the superannuation guarantee on the $1,000 per fortnight of wages that Nick is earning.

The business has the option of choosing to pay superannuation on the additional $500 (before tax) paid

to Nick under the JobKeeper Payment.

 

Adam can register his initial interest in the scheme from 30 March 2020, followed subsequently by an application

to ATO with details about his eligible employees. In addition, Adam is required to advise his employees that he

has nominated them as eligible employees to receive the payment. Adam will provide information to the ATO

on a monthly basis and receive the payment monthly in arrears.

 

It is important to note that the 30% decline in turnover is based on:

  • Relative to a comparable period a year ago, and for at least a one-month period
  • The 30% decline in turnover is self-assessed by the business and can apply if you anticipate your turnover will decline by more than 30% in the coming months. The turnover does not have to have actually declined by mor than 30% in the past month.

As mentioned, we are currently preparing the online expression of interest with the ATO for a number of clients and then moving on with their actual online application forms. Further updates will be sent as we gather more information on the actual process with the ATO.

Kind Regards,

MyAccountants (Aust) Pty Ltd