Update 2nd April: FEDERAL GOV’T JOBKEEPER WAGE SUBSIDY
Following the Monday announcement of the third round of economic incentives by the Morrison Government and the $1,500.00 per fortnight payments to business there has been a lot of confusion and conjecture how it will apply to businesses.
As noted in our previous email the Job keeper subsidy will be administered by the Australian Taxation Office and their website has an online “registration” form. Over 370,000 businesses have already registered.
The ATO have stated they are not releasing any further information on the possible operation of this new subsidy until the legislation is formally passed by Parliament. A Parliament sitting has now been set for 9:00am 8th April, next Wednesday and is expected to be passed with bipartisan agreement.
Once passed the ATO will be contacting those registered businesses to make a formal online application for the subsidy. The ATO will then begin the eligibility assessment for each business. The first payments are expected to start in early May 2020.
When originally announced on Monday only firms that can demonstrate at least a 30% drop in revenue for a comparable period from 12 months ago, e.g. March 2020 v. March 2019 are potentially eligible. This has caused some angst for those business that have not seen a full 30% or more decline in turnover as yet but are expecting it will in coming months and those growing businesses that had much lower turnover 12 months ago but now are in decline less than 30% comparable.
Today Treasury has released further updates on how they expect the eligibility will be assessed by the ATO. Under the change, where a business was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, the ATO commissioner will now be given discretion to consider additional information to determine eligibility.
The commissioner will also be given discretion to set out alternative tests to establish eligibility for specific circumstances, for example, where businesses have ceased operations or have significantly curtailed their operations.
“There will be some tolerance where employers, in good faith, estimate a greater than 30 per cent fall in turnover but actually experience a slightly smaller fall,” Treasury added.
Australian small business and family enterprise ombudsman Kate Carnell says “They’re (ATO) taking the approach that they’re attempting to help people and include people rather than excluding people,”.
So the message is to register if you believe your business has suffered a 30% or more decline in turnover or you believe it is very likely to suffer a 30% or more decline in the coming months. We will know more detail from the ATO in the coming weeks.
For now, stay safe and look after your mental health as well as your physical health