The JobKeeper Payment is being delivered by the Australian Tax Office (ATO). Businesses will need to register for the wage subsidy by either getting in contact with the ATO or by visiting their website. Given that the payment was announced on the 30 March 2020, CCIQ acknowledges that the specific questions that you seek mightn’t be available at present. Regardless, we urge that you register your interest with the ATO as a priority rather than waiting for the answers to your specific questions. For more information, please use the resources listed below:
- Register for the JobKeeper Payment here
- Contact the ATO business support line with any specific question on 13 28 61
- Review the ‘JobKeeper Payment’ Government fact sheet here
- Review CCIQ’s ‘JobKeeper Payment’ summary here
- Clarifying eligible employees
- Support for non-employing businesses
- Foreign employees
- Treatment of taxation and superannuation
- Evidencing slowing turnover (year on year)
- Employees typically earning less than $1,500 per fortnight
- Registering with the ATO
- Timing concerns
- Payroll concerns
Eligible employees are defined as those who:
- Are currently employed, including those that may have been stood down or re-hired (i.e. actively engaged under a working contract with the business)
- Were employed by the employer as at 1 March 2020;
- Are employed on a full-time, part-time or long-term casual basis (a casual employee that has been employed regularly for longer than 12 months);
- Are at least 16 years of age;
- Are an Australian citizen, holders of a permanent or special visa (see the full list here); and
- Are not in receipt of a JobKeeper Payment from another employer.
1) Will casual staff qualify for the JobKeeper Payment?
Yes, casual workers will be eligible for the JobKeeper Payment if they have been employed for longer than 12 months. Additional eligibility criteria are listed above.
2) Will apprentices and trainees qualify for the JobKeeper Payment?
The wages of apprentices and trainees have already been subsidised under the ‘Apprentice Wage Subsidy’ scheme (see information here). Whether or not the employee will be eligible for further support will be determined by the ATO.
3) How will the JobKeeper Payment benefit businesses that hire self-employed contractors?
Self-employed contractors will not be considered as an eligible employee under the JobKeeper Payment scheme. In such circumstances, it would be advisable for the contractor to seek out other small business stimuli, or seek welfare assistance.
4) Can you hire more staff if work picks up while receiving the JobKeeper allowance?
Yes, but new employees are not eligible for JobKeeper.
5) What if my part time staff are receiving JobSeeker payments?
The employee can choose not to return the JobKeeper nomination form to continue to receive JobSeeker payments and will therefore will not be able to claim to receive JobKeeper payments.
6) Is JobKeeper able to be claimed for Employees that you have made Redundant
If you re-engage the employee, you can claim from the date you re-engage him assuming you pass the base criteria.
7) If an Apprentice has completed his Contracted Apprenticeship and ceased worked for you during this time period can you claim for him also?
If the apprentice is employed by you on or before 1 March and his employment continues or is re-engaged, you can apply for him.
8) Is an Employee on UNPAID Maternity Leave eligible for JobKeeper?
9) If we aren't able to keep trading and have to close the business between now and the end of September, are we liable to repay the Government back?
No but you must keep passing the money onto employees. You are ineligible if you appoint a receiver or liquidator.
10) Are Not for Profit organisations eligible?
You can be if you meet the decline test and have received gifts
11) What happens if an Employee goes on to WorkCover during the 6 month payments?
The JobKeeper payments cease and you need to notify the ATO
12) What happens when an organisation has closed their office with staff working from home. Are the eligible for Jobkeeper payments?
“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. Self-employed people 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.
1) Will this be available for sole traders?
For sole traders paying themselves a wage/salary, the ATO has asked that you register your interest for the JobKeeper Payment. CCIQ is awaiting further comfort regarding micro-business support under the current scheme.
Included in the eligible employee description were Australian citizens and holders of permanent or special visas. In more detail, this includes:
- Australian citizens;
- Holders of a permanent visa;
- Holders of a Protected Special Category Visa;
- Holders of a non-protected Special Category Visa Holder who has been residing continually in Australia for ten years or more; or
- a holder of a Special Category (Subclass 444) Visa
1) Will employees from New Zealand or overseas be eligible for the JobKeeper Payment?
Employees that are foreign citizens, and who do not hold special visas will not be eligible for the JobKeeper Payment.
“Participating employers will be required to ensure eligible employees 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.”
1) Are you required to make superannuation payments while receiving the JobKeeper Payment?
Businesses that continue to operate will be required to meet the superannuation guarantee on the employee’s standard salary. Any additional payment made to employees up to the $1,500 p/f minimum will not require superannuation to be paid.
Also, for non-essential businesses that are forced to close (all staff stood down), no superannuation will need to be paid on the minimum $1,500 p/f payment.
If this is still unclear, the Government fact sheet provides case studies for the treatment of the JobKeeper Payment and employee superannuation entitlements.
2) Will I have to withhold tax
It is anticipated that employers will be able to withhold tax from the credited gross subsidy ($1,500 before tax).
3) If my business is primarily export, how do I measure the GST sales (1A) for assessment?
Only GST Turnover relating to supplies made in Australia are relevant for this test. Export sales are GST free and should be reported in 1A. Sales relating to a decline in overseas operations are ineligible.
4) GST Turnover - does this exclude GST free exports?
No - it includes them.
Businesses will need to evidence a 30 or 50% reduction in turnover during a comparable period of at least one month (year on year).
Businesses with turnovers of less than $1 billion will need to evidence a 30% reduction year on year. Otherwise, businesses with a turnover greater than $1 billion will be required to evidence a 50% reduction year on year.
1) How will businesses evidence a 30 or 50% slowdown in business turnover?
Businesses will need to show a comparable period of at least one month which highlights the significant reduction in turnover as a result of the Covid-19 event.
2) How will recent start-ups that have experienced significant growth in the later months of 2019 evidence turnover declines?
Businesses that are unable to show a year on year reduction (e.g. comparing February 2019 with February 2020) are urged to contact the ATO for further support.
3) Can you apply based on GST turnover for May 2019 to May 2020?
Yes but if the decline is in May, you cannot apply before the fortnight in May that you project a decline.
4) What happens once your business income picks up?
Once you are in, you are in for the entire period.
“For employees that were already receiving this amount ($1,500 p.f.) 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 can provide them with a top-up.”
1) Will businesses be forced to pay the full $1,500 to their employees?
Businesses will be required to ensure that each eligible employee receives a minimum of $1,500 per fortnight.
For employees that are actively employed, and earning a salary greater than $1,500 per fortnight, the JobKeeper Payment will be available to subsidise (up to $1,500) the difference.
2) If staff were earning less than $1,500 p/f before the Covid-19 event, do businesses still have to pay the full $1,500?
Yes, businesses will be obligated to ensure that each eligible employee receives a minimum gross payment of $1,500 per fortnight.
3) If casual employees are actively working, but have experienced a reduction in hours, how will the payment be treated?
The payment will be implemented to subsidise the reduced income up to a minimum of $1,500 per fortnight.
4) What are the benefits of providing additional income to employees that otherwise would not be earning $1,500 p/f?
The benefits of providing additional income to employees that would otherwise earn less than $1,500 are to encourage spending in the economy. It has been shown that low-income individuals are more likely to spend additional money compared to those with a higher wage or salary.
“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. Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.”
1) How easy will the application process be?
There is yet to be a formal application process handed down by the ATO. In the interim, expressing your interest is simple and can be done through that ATO website.
2) Can I assume that the original requirement to notify the ATO prior to the end of each JK fortnight in order to be eligible for that particular fortnight's JK payment has now been superseded by the once-only requirement to disclose entitlement when registering with the ATO?
Yes - the original rule allows you eligility into the scheme as long as you notify the ATO before the end of any particular fortnight. An extension was granted for the first two fortnights and extended by the ATO to 30 April.
3) How do you notify ATO re payments already made to employees in April as Jobkeeper?
Refer to the payroll guides from your software provider for these details.
4) Can you change the form once completed?
You need to contact the ATO.
“The first payment will be received by employers from the ATO in the first week of May.”
1) How long will it be until the JobKeeper Payments are made to businesses?
The first payment will be received by employers from the ATO in the first week of May
2) What support is available for stood-down employees in the interim?
It is important that employees stood down as a result of the Covid-19 event seek out welfare assistance from Centrelink. It will then be the employee’s responsibility to disclose additional income once the JobKeeper Payments enter circulation.
1) Do you have to pay both fortnights in April if your cashflow won't allow you?
Yes, you must do both fortnights in April.
2) Is payroll tax payable on top up payments?
SA & WA have both said no. We assume Qld will follow suit in due course.
3) How do I pay staff who are on long service or annual leave?
They still need to receive $1,500 each fortnight.
4) Can employees top up there wage using annual leave?
If they work more than $1,500 or take entitlements above that per fortnight, they must be paid the excess.
5) Can you align the pay periouds around the JobKeeper cut off dates?
You must make the payments in the ATO fortnights but you do not need to align your pay period to the ATO fortnight. i.e. - a payment on 5 April is in the first ATO fortnight and will therefore count as the first jobkeeper payment.
6) Does the employer have to pay themselves and how?
If applying as an eligible business participant, by attributing the payment, a contracting fee or on payroll should be fine.
7) If an employee agrees to a voluntary reduction in their salary package due to COVID19 - say 20%, and the employer becomes eligible for the jobkeeper, is the employer required to make up the employees salary back to the pre 20% reduction amount?
8) What if your payroll cycle is monthly?
The Commissioner can treat monthly payments as being reasonable made in each fortnight. You do not need to apply to the ATO for this discretion.
9) Do we need to have a separate category in our payroll for these payments?