The JobKeeper wage subsidy program is a temporary Federal Government stimulus measure to provide support to Australian businesses that have been significantly impacted by coronavirus. As currently legislated, it provides for a flat rate $1,500 payment per eligible employee at eligible businesses, for each qualifying fortnight. This support is scheduled to end on 27 September 2020. However, the Treasurer has announced the program is to be extended to run through to 31 March 2021, although with some changes.

Broadly, these changes are:

• 1. Businesses will be required to prove an actual decline in turnover to remain eligible.
  2. Employees who previously missed out due to not meeting employee eligibility criteria at the 1 March 2020 date, may be eligible for payments from 3 August 2020 if they meet the employee eligibility criteria at 1 July 2020.
  3. The payment per employee will be reduced from 28 September 2020, also there will be two payment levels. The flat rate provided will reflect the standard hours per week an employee worked in February 2020 (or June 2020 if they only meet the 1 July 2020 test date). The payment amounts will be reduced again from 3 January 2021.

Businesses who are already receiving JobKeeper payments should urgently consider whether any further employees are eligible for JobKeeper payments from 3 August 2020. Businesses have until:

1. Monday 24 August 2020 to provide newly eligible employees with the JobKeeper employee nomination notice
2. Monday 31 August 2020 to make any top up payments for the JobKeeper fortnights from 3 August 2020 and to complete the enrollment of those employees.

It is important that these deadlines are met as not including employees from when they are first eligible may breach the ‘one in, all in’ principle.

The next sitting of Parliament is scheduled from 24 August until 3 September 2020. We would expect that during this time the proposed JobKeeper extension is finalised and legislated. In the meantime, below is information on the JobKeeper eligibility criteria as it stands, and what it is expected to look like under the extension. Eligibility is determined at both the business and employee levels.

Business eligibility criteria

The table below shows business eligibility criteria as it currently stands (under Phase 1) and how this changes under the proposed extension (Phases 2 and 3).

Note, the Tax Commissioner does have discretion to consider additional information or tests in specific circumstances – for example in the instance the business has been operating for less than 12 months, or in situations where the turnover 12 months prior was not representative of usual turnover.

I’m a sole trader or self employed – does that mean I miss out on JobKeeper?
Not necessarily. Sole traders and those who are self employed with an ABN, are also eligible for JobKeeper payments if they meet the turnover test for the specified period and:

• 1. They had an ABN on or before 12 March 2020
  2. They had some income in the 2018-19 financial year, or made some supplies between 1 July 2018 and 12 March 2020, and provided a 2019 tax return or certain activity statements to the ATO by 12 March 2020
  3. They were actively engaged in the business
  4. They are not otherwise entitled to a JobKeeper Payment
  5. As at 1 March 2020, they:
  • 1. Were at least 16 years of age
    2. Either were an Australian citizen, or a holder of either a Permanent Visa or a Special Category (Subclass 444) Visa.

My business is structured as a partnership, company or trust, but I don’t have any employees.
This is quoted straight from the ATO website: “Other businesses in the form of a company, trust or partnership can also qualify for JobKeeper payments where a business owner (a shareholder, adult beneficiary or partner) is actively engaged in the business, or a director is actively engaged in the business. This is limited to one entitlement for each entity even if there are multiple business owners or participants.”

The “one-entitlement” limitation is as follows:

• 1. Partnership – only one partner can claim
  2. Company – only one active shareholder, or one director, can claim
  3. Trust – only one beneficiary can claim (note a corporate beneficiary can not claim).

The business eligibility criteria shown still apply; also, the person claiming must not be a permanent employee. If you have multiple businesses, you can only apply under one business.

Employee eligibility criteria

The table below shows employee eligibility criteria as it currently stands (under Phase 1) and how the amount that must be paid is reduced in the proposed extension (Phases 2 and 3).

JobKeeper payment amounts

The table below shows how the flat rate JobKeeper payment amount currently stands (under Phase 1) and how this reduces under the proposed extension (Phases 2 and 3).

How to access the JobKeeper wage subsidy

Businesses and employees (where relevant) should review and action their responsibilities as per below.

Businesses:
Businesses need to decide whether they are going to manage the JobKeeper registration and calculation process alone, or whether they will involve their accountant or advisor. If they decide to manage it themselves, be aware there are a number of steps and some are ongoing for the duration of the claims.

With regards to the proposed extension, please note it is expected that businesses will be required to complete the enrollment process for both Phase 2 and Phase 3, even if they are currently enrolled under Phase 1.

The key steps are:

Step 1: Check eligibility criteria are met at both the business and employee levels
Refer to the eligibility criteria listed above. Does your business meet the turnover test? If you don’t qualify initially, schedule to review this again in upcoming months, as you might still be able to benefit under the program. For example – if you only meet the turnover test in August 2020, you can still apply then and will receive at least one months worth of payments, depending on when you submit your application.

In specific circumstances, the Tax Commissioner may be able to consider additional information to determine eligibility.

Step 2: Send eligible employees the JobKeeper employee nomination notice
You need to advise eligible employees you are intending to claim the JobSeeker payment for them and provide them with the JobKeeper employee nomination form. This form needs to be completed and retained on file. This is for your records and is not sent to the ATO.

Step 3: Enrol the business for JobKeeper wage subsidies
You need to complete the application paperwork using the Business Portal and authenticate with your myGovID. If you had previously submitted a registration of intent to claim, please note you are still required to enrol.

Payments under the scheme will only commence from when you apply. There was an exception to this, available up to 26 April 2020, where you could backdate a claim to 30 March 2020, however that has now expired.

Step 4: Nominate eligible employees with the ATO
The ATO needs you to nominate who the eligible employees actually are.

Step 5: Notify nominated emmployees
Once you have nominated your eligible employees with the ATO, you need to advise those employees. Some may need to update Services Australia regarding this.

Step 6: ATO processes payment
The ATO will begin processing JobKeeper payments for your eligible employees. Payments are made monthly, in arrears.

Step 7: Monthly JobKeeper Declaration report (for the duration of the scheme)
Each month you are required to reconfirm for the ATO that the employees nominated are still eligible. You also must notify the ATO if eligibility changes or an employee ceases employment. This information is to be reporting using the JobKeeper Declaration report, through either Online Services or the Business Portal. This report also requires you to submit GST turnover and projected turnover each month.

Employees:

JobKeeper employee nomination notice
If your employer provides you with a JobKeeper employee nomination notice, complete and return this as soon as possible. The longer you hold onto it, the more likely you are to miss out on some or all JobKeeper payments, as the employer is required to have the completed form on record.

If you have multiple employers, you can only claim the JobKeeper payment from one employer.

Income Support payment recipients
If you currently receive an income support payment through Services Australia, when you have confirmation from your employer that they will be providing a JobKeeper payment to you, you need to notify Services Australia. This is important because receiving the JobKeeper payment may void your eligibility for other income support payments and at the moment you need to know that your money is yours, not money that you have to repay to Services Australia.

A Warning On Eligibility
The ATO can claim back payments they have made to a business in relation to the JobKeeper subsidy, where they later discover the eligibility criteria has not been fully met. They may also charge interest on those amounts. However, you can’t do the same with your employees. If you have received and passed on the JobKeeper payment to an employee and you later find that either they or the business doesn’t meet the eligibility criteria, you have no recourse to get this money back from your employee. This would mean you are out of pocket for every ineligible payment made to your employee.

Take the time to be sure of eligibility at both the business and employee levels so you don’t have a situation like that.

Helpful Resources:

• 1. Ato.gov.au – JobSeeker Payment – Eligible Employers
  2. Ato.gov.au – Enrol for the JobKeeper Payment (businesses reporting through STP)
  3. Ato.gov.au – Enrol for the JobKeeper Payment (businesses not reporting through STP)
  4. Business.gov.au – JobSeeker Payment – Scroll down the page to see how the JobSeeker subsidy would apply in different scenarios.

If you have any questions about whether you qualify for the JobKeeper stimulus measures, or need help applying, you can call us on 03 5339 3200 or contact us here.

Thanks for reading.

The information contained on this website has been provided as general advice only.  The contents have been prepared without taking account of your personal objectives, financial situation or needs.  You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.