JobKeeper Stimulus Update - legislation passed
26 May 2020
Since the initial release of the JobKeeper program, we have had a lot of queries on the details of this stimulus package and how it is going to operate. Now legislation has been passed, we can bring you some of the key points that were clarified and added to the initial announcement.
1. Business Eligibility Tests
- Turnover Test: For the less or more than $1 billion turnover - this test looks at the annual group aggregate turnover
- Turnover is defined as per GST purposes, in simplistic terms your G1 figure
- The 30% decline in turnover is for each employer entity, i.e. in group structures with multiple employer entities, the decline in turnover is on an employer entity by employer entity basis
- Comparison period is with corresponding month or quarter in 2019
- If a business is not eligible in March, can re-test in a later month/quarter
- Once eligible, no need to re-test later
- To support eligibility claims employers will require:
i. BAS for relevant periods
ii. Employee Nomination Forms - to be completed by both employer and employee
iii. Employee Nomination Forms - do not need to be sent to ATO, Employer is to retain these on file. The following is a link to these forms: https://www.ato.gov.au/uploadedfiles/content/cr/d1aab7f2-fbe8-44b8-9ec1-4885ded1088e.pdf
iv. On-going reporting to ATO (more details yet to be supplied on this)
v. Relevant records must be kept for minimum five years
1. Employee Eligibility Tests
- There are two key requirements
(1) As at 1 March 2020 requirements:
- Aged 16 years or over
- Employed either full time or part time OR
- Have been a casual employee of that entity on a "regular and systematic basis" during the preceding 12-month period up to 1 March 2020
- Employee terminated or stood down since 1 March 2020 can still be eligible
(2) Fortnightly requirements, the individual:
- Is employed by the entity during the fortnight
- Does NOT receive:
- Paid parental leave
- Receives dad or partner pay
- Totally incapacitated or receiving workers compensation
- Has not given another entity a nomination to receive JobKeeper payment
- Has given employer a nomination notice stating they have satisfied the eligibility requirement
1. Sole Traders and Other Businesses
Businesses that do not pay wages may still be eligible for JobKeeper payment.
- The business must satisfy the same employer eligibility requirements (i.e. decline in turnover) and
- Have an ABN on 12 March 2020 and satisfy one of the following:
i. Assessable income in 2018/2019 from carrying on a business (and have notified the ATO by 12th March 2020)
ii. Have made taxable supply between 1 July 2018 and 12 March 2020 (and have notified the ATO by 12th March 2020)
- The payment by that business must be to a nominated individual:
i. Companies - one nominated Director or Shareholder
ii. Sole Traders - the individual
iii. Trusts - one adult beneficiary
iv. Partnership - one individual partner of the Partnership
1. Critical Steps to be undertaken
- The ATO provides the following 8 Steps with relevant hyperlinks to forms: (https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Enrol-and-apply-for-the-JobKeeper-payment/)
- Enrol for the JobKeeper payment (from 20 April onwards)
c. You or a registered tax professional (knp Solutions Pty Ltd) can enrol you for the JobKeeper payment:
Step 1 - Check you and your employees meet the eligibility requirements.
Step 2 - Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).
Step 3 - Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they are not claiming JobKeeper payment through another employer or have nominated through another business.
Step 4 - Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to your registered tax agent if you are using one.
Step 5 - From today, 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.
Step 6 - In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader.
Step 7 - Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March - 12 April) and the second JobKeeper fortnight (13 April - 26 April).
The above information covers what we believe are the main issues. If you have other queries or would like our assistance in determining your eligibility or our assistance in applying for the JobKeeper payment, please contact your knp representative.