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Job Keeper 2.0 Explained

JobKeeper Payment Scheme

COVID-19 Stimulus Package

Following on from our recent email regarding the JobKeeper Payments, the Federal Parliament has now passed the $130 billion historic scheme as well as the administrative rules. The ATO have now launched their website of information on how the system will operate. There is an enormous amount of information and detail provided for in the ATO Website [Link] and the Treasury Fact Sheets [Link].

In the interest of not overloading you with information, here are the critical takeaways:

EMPLOYERS

Critical Dates

  • ASAP – Register an intention to apply on the ATO website https://www.ato.gov.au/Job-keeper-payment/
  • ASAP – Review and note down which of your employees are eligible https://www.ato.gov.au/General/JobKeeper-Payment/Employees/Eligible-employees/
  • ASAP – Notify employees you will be applying for JobKeeper for them. Both employer and employee must complete the “JobKeeper Nomination Notice” – https://www.ato.gov.au/Forms/JobKeeper-payment—employee-nomination-notice/
  • From 20 April Onwards – You will be able to enrol for the JobKeeper Payment through the ATO Business Portal
  • 30 April – Cut off of enrolments for JobKeeper for the month of April
  • 30 April – Cut off to make sure all eligible employees have been paid at least $1,500 per fortnight. This is allowing late payment of wages for the month of April 2020 only. Future wages must be paid on time to be eligible for JobKeeper payments.
  • 4 May Onwards – Confirmation of eligible employees you will claim JobKeeper Payment for. This is where you will be reporting to the ATO which employees you will be claiming the JobKeeper Payments for.

Turnover Tests

  • Basic Test – Your business is eligible if your GST turnover has, or is likely to be reduced by more than 30% (relative to the same period a year ago). E.g. Actual March 2020 vs March 2019, Projected April 2020 vs April 2019 or Projected April-June 2020 vs April – June 2019
  • Alternative Test – The ATO will have the power to review alternative evidence to establish the turnover reduction of 30%. For example, this will be available for businesses that have only just started, or has ‘lumpy’ income. More information to come.

My employee normally receives less than $1,500 per fortnight

  • In order for an employee to be eligible for the JobKeeper Payment, they must be “topped up” to at least $1,500 per fortnight (before tax) if they are normally on a lesser wage.

Can I back-pay employees that were stood down?

  • For the month of April only, the ATO is allowing back payment of the minimum $1,500 per fortnight per employee. As noted above this must be paid to the employees BEFORE 30 April 2020. All future payments must be paid on time to employees in line with your normal pay cycle.
  • Care should be taken here when paying employees that otherwise wouldn’t be getting paid. If the business or employee aren’t eligible, you may have difficulty in reclaiming those payments from the employee.

When does super apply?

  • New rules are being introduced by government – the following are based on government announcements and subject to legislation/regulations being passed
  • It is expected that if the employee is still working in the business and earning more than $1,500 per fortnight, super will apply on the full wage amount including the JobKeeper amount.
  • It is expected if the employee was stood down, super shouldn’t apply whilst they aren’t working for the business.
  • It is expected if the employee normally receives, for example, $1,000 per fortnight, the additional $500 top up from the JobKeeper Payment shouldn’t attract super.

When can casuals receive JobKeeper Payments?

  • See full detail of eligible employees in link above.
  • Eligible long-term casual employee are casuals that have been employed on a regular and systematic basis for at least 12 months as at 1 March 2020 and not a permanent employee of any other employer.
  • Not a permanent employee of any other employer is an important factor and the employee will need to declare this on the “JobKeeper Nomination Notice”

When will the first JobKeeper Payments be made from the ATO?

  • Treasury has indicated first payments will be made from the first week of May.
  • Potentially there may be delays if you don’t actively use Single Touch Payroll “STP” or you need to use the alternative test for turnover

SOLE-TRADERS, ACTIVE DIRECTORS/SHAREHOLDERS, TRUST BENEFICIARIES AND PARTNERS OF PARTNERSHIP NOT ON WAGES

See critical dates and turnover test detail above (ignoring employee related items). The ATO is due to provide more information for sole traders and “business owners actively engaged in their business” soon. One active business owner per entity may be eligible for the JobKeeper Payment. This is the case even in a Partnership of unrelated people, or an active shareholder and an active director – only one claim per entity is allowed.

The information contained in this email is in the nature of general comment and to be used for information purposes only. This is not to be relied upon or taken as advice.

For more information please contact our office on 9600 7760.

The material contained here is in the nature of general comment and information only and is not advice. The material should not be relied upon. Silver & Young, any Australian member, and related entity, or any of its offices employees or representatives will not be liable for any loss or damage arising of or in connection with the material contained on these information sheets.

Yesterday, the Government announced the JobKeeper Payment scheme to deal with the ongoing impact of COVID-19.

Please refer to the [Fact Sheet] for more details.

Eligible Employers?

  • Turnover less than $1 billion and will be reduced by more than 30% (relative to the comparable period a year ago); or

You must have been in an employment relationship with eligible employee as at 1 March 2020 and each eligible employee is currently engaged.
Not-for-profit entities, charities and self-employed individuals (with no employees) that meet turnover test that apply for businesses are eligible to apply.

Eligible Employees?

  • Currently employed by the eligible employer (including those stood down or re-hired);
  • Were employed by the employer as at 1 March 2020;
  • Are full-time, part-time or long-term casuals (longer than 12 months with regular employment as at 1 March 2020);
  • 16 years of age or greater;
  • Australian Citizen, permanent visa holder, Protected Special Category Visa Holder, non-protected Special Category Visa Holder residing in Australia greater than 10 years, or a Special Category (Subclass 444) Visa Holder;
  • Are not in receipt of Jobkeeper Payment from another employer.

Application Process

  • Initially, Businesses with employees and Business without employees (such as the self employed) can register their interest in applying for the JobKeeper Payment here: https://www.ato.gov.au/general/gen/JobKeeper-payment/.
  • Refer to the Fact Sheet for specific details suitable to you.

The information contained in this email is in the nature of general comment and to be used for information purposes only. This is not to be relied upon or taken as advice.

For more information please contact our office on 9600 7760.

The material contained here is in the nature of general comment and information only and is not advice. The material should not be relied upon. Silver & Young, any Australian member, and related entity, or any of its offices employees or representatives will not be liable for any loss or damage arising of or in connection with the material contained on these information sheets.

In an attempt to deal with the ongoing impact of COVID-19, the government announced an additional $66 billion stimulus package today.

What’s in it for individuals?

Income Support

Expansion to the eligibility of income support payments and established a new, time-limited Coronavirus supplement to be paid [$550 per fortnight] for both existing and new recipients of the eligible payment categories.

Household Support

Two household support payments of $750 each to social security, veteran and other income support recipients and eligible concession card holders. Payable in March 2020 and July 2020.

Superannuation Early Access

Temporary release of superannuation to individuals affected by COVID-19. Limits apply to $10,000 per 2020 & 2021 financial years. These amounts will be tax free and you must satisfy specific criteria.

Superannuation Support to Retirees

Temporarily reduced the minimum drawdown requirements of account based pensions and similar accounts by 50% for the 2020 + 2021 financial years.

What’s in it for your business?

Assistance with cashflow – PAYG refund

Under the enhanced scheme, employers will receive a payment equal to 100 per cent of their salary and wages withheld (up from 50 per cent), with the maximum payment being increased from $25,000 to $50,000. In addition, the minimum payment is being increased from $2,000 to $10,000.

An additional payment is also being introduced in the July – October 2020 period. Eligible entities will receive an additional payment equal to the total of all of the Boosting Cash Flow for Employers payments they have received. This means that eligible entities will receive at least $20,000 up to a total of $100,000 under both payments.

Loan Guarantees

The Government will guarantee 50% of new unsecured loans for businesses with turnover under $50 million. The Government will provide eligible lenders with a guarantee for loans – conditions apply – see fact sheet for more detail.

Temporary relief of financial distressed businesses

Designed to protect businesses as a result of the economic impacts of Coronavirus. The elements of the package provide a safety net to make sure when the crisis is over they can return to business as usual. See the fact sheet for more details.

For owners or directors of a business that are currently struggling due to the Coronavirus, the ATO will tailor solutions for their circumstances, including temporary reduction of payments or deferrals, or withholding enforcement actions including Director Penalty Notices and wind-ups.

The information contained in this email is in the nature of general comment and to be used for information purposes only. This is not to be relied upon or taken as advice.

For more information please contact our office on 9600 7760.

The material contained here is in the nature of general comment and information only and is not advice. The material should not be relied upon. Silver & Young, any Australian member, and related entity, or any of its offices employees or representatives will not be liable for any loss or damage arising of or in connection with the material contained on these information sheets.

In an attempt to deal with the impact of the coronavirus on the Australian economy, the government announced a $17.6 billion stimulus package. 

Please note the below measures are subject to the relevant legislation passing through parliament. At this stage, parliament is not scheduled to resume until the 23rd of March. 

What’s in it for you?

A stimulus payment:

  • a one-off $750 payment all social security, veteran and other income support recipients and eligible concession card holders. This includes those on Newstart, those who have commonwealthseniors health cards, and families receiving family tax benefits.
  • The payment will be tax-free and will not count as income for social security, farm household allowance and veteran payments.

What’s in it for your business?A cash-flow boost:

  • Eligible businesses that withhold tax on their employees’ wages will receive a payment equal to 50% of the amount withheld, up to a maximum payment of $25k (across all lodgments).
  • Delivered as a credit in the ATO activity statement system upon lodgement of eligible activity statements from 28 April 2020:
    • Quarterly lodgers will be eligible to receive the payment for the March and June 2020 quarters;
    • Monthly lodgers will be eligible to receive the payment for the March to June 2020 lodgments.  Note that, to provide an equivalent benefit as that received by quarterly lodgers, monthly lodgers payment for the March activity statement will be calculated at a rate of three times (150%).
  • The payment will be tax tree

Incentives for businesses:

  • Increased threshold for instant asset write off – lifting to $150,000 (from $30,000) for new or second hand assets
    • Asset must be first used or installed from the announcement until 30 June 2020.
  • Accelerated depreciation deductions – deduct 50% of the cost of a new asset on installation with normal depreciation rules applying to the balance.
    • Asset acquired after the announcement and first used or installed ready for use by 30 June 2021.

Supporting employers in employing apprentices and trainees:

  • Eligible employers can apply for a wage subsidy of 50% of the apprentice’s or trainee’s wage paid during the 9 months from 1 January 2020 to 30 September 2020.
  • Employers will be reimbursed up to a maximum of $21k per eligible apprentice or trainee ($7k per quarter).
  • Available to small businesses employing fewer than 20 full-time employees who retain an apprentice or trainee.
  • The apprentice or trainee must have been in training with a small business as at 1 March 2020.
  • Access to the subsidy will be available after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider.
  • Employers can register for the subsidy from early-April 2020. Final claims for payment must be lodged by 31 December 2020.

What’s in it for affected regions? Support for affected areas:

  • The Government has set aside an initial $1 billion allocation to support those regions and communities that have been disproportionately affected by the economic impacts of Coronavirus.
  • It will also include additional assistance to help businesses identify alternative export markets or supply chains.
  • Targeted measures will also be developed to further promote domestic tourism.

The ATO will provide administrative relief for certain tax obligations for taxpayers directly affected by the Coronavirus outbreak, on a case-by-case basis.

The information contained in this email is in the nature of general comment and to be used for information purposes only.  This is not to be relied upon or taken as advice. 

For more information please contact our office on 9600 7760.  

The material contained here is in the nature of general comment and information only and is not advice. The material should not be relied upon. Silver & Young, any Australian member, and related entity, or any of its offices employees or representatives will not be liable for any loss or damage arising of or in connection with the material contained on these information sheets.


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