In response to the significant economic impact caused by the Coronavirus, the Australian Government has announced a $130 billion JobKeeper payment to help keep more Australians in jobs and support businesses those affected.
Through the scheme, approximately 6 million workers will receive a fortnightly payment of $1,500 (before tax) through their employer. The payment ensures eligible employers remain connected to their workforce and will help businesses restart quickly when the crisis is over. A lot of questions have been raised from businesses and employees regarding eligibility criteria and the different circumstances in which JobKeeper may or may not apply. In this article, we cover some frequently asked questions about JobKeeper.
I have missed paying some of my employees the minimum $1,500 in the first JobKeeper fortnight. Can I still apply for JobKeeper for that first fortnight?
Yes. The information that the ATO has released states that for the first two JobKeeper fortnights, it will accept the minimum $1,500 payment for each fortnight has been paid by an employer even if it has been paid late. However, the amounts must be paid by the end of April.
If a business elects to be involved in the JobKeeper scheme because it projects that its turnover will fall by more than 30%, what happens if the fall in turnover turns out to be something less than this?
The answer to this is not entirely clear. We are awaiting guidance from the ATO.
Does a business have to wait until it lodges its BAS before it gets JobKeeper payments from the ATO?
No. The JobKeeper payment will be paid no later than the later of:
- 14 days after the end of the calendar month in which the fortnight ends; and
- 14 days after the Commissioner is satisfied that the requirements of JobKeeper have been satisfied. The Commissioner has discretion to conclude that the requirements have been satisfied in certain circumstances.
A sole trader has an ABN but has never lodged a BAS because it is not registered for GST and does not deduct PAYG withholding. Can the entity claim JobKeeper for the owner of the business?
The fact that a business has not lodged a BAS does not prevent it from satisfying the decline in turnover test.
On the assumption that the individual satisfies all of the requirements, including being actively engaged in the business, there can be a claim for JobKeeper provided the individual has lodged his/her income tax return for the year ended 30 June 2019 that includes assessable income from the business. The tax return would need to have been lodged by 12 March 2020, or a later time allowed by the commissioner. We do not know whether the commissioner will allow a later time in relation to the JobKeeper scheme.
What happens if a business is unsure about whether it will have a 30% decline in turnover for the June 2020 quarter in April and May 2020, but realises that it will have such a decline on say, 10 June 2020? Can it still enter the JobKeeper scheme? Can it (legally) back-date its involvement to 30 March 2020?
The JobKeeper scheme operates prospectively only (except for the first two fortnights). The scheme operates in respect of JobKeeper fortnights. If an employer comes to the conclusion on 10 June 2020 that it is going to have a greater than 30% decline in turnover and satisfies all of the requirements of the JobKeeper scheme, it will be entitled to JobKeeper payments for the JobKeeper fortnight ending 21 June 2020 and following.
A business commenced in October 2019. How is the decline in turnover test calculated for this business?
The business will have to rely on the alternative decline in turnover test(s). We are awaiting guidance as to what this will be.
Is a business that receives the 50% wage subsidy for apprentices and trainees also eligible for JobKeeper in relation to the apprentice or trainee?
Where small businesses receive the JobKeeper Payment, they are not eligible to receive the apprentice and trainee wage subsidy from 1 April 2020 onwards
Normally, a business pays one of its employees $800 per fortnight. What must it do under JobKeeper? If the business pays them $1,500, can the business ask the employee to work extra hours or assume other duties?
If the employee is eligible, the employer must pay the employee $1,500 per fortnight, before tax, while JobKeeper is in operation. Further, it is the intention of the Government to require the employer to contribute 9.5% of $800 to the employee’s superannuation fund. The changes needed to the superannuation law requiring this have not yet been enacted.
Mum and Dad are in partnership. Mum does a lot less work in the partnership than Dad. Neither of them are employed by the partnership. Dad is covered by JobKeeper for another business. Can I make a JobKeeper claim for Mum?
Yes, provided mum can satisfy all of the conditions. One of those conditions is that mum is “actively engaged in the business”. This is a question of fact. There is currently no guidance on what this term means.
When calculating the decline in turnover test, are all members of a consolidated group included in the calculation?
No. The turnover test is undertaken on an entity by entity basis.
Are personal services businesses eligible for jobkeeper if operating through a company or trust. No wages are paid to the individual involved but all of the income is attributed due to the PSI rules.
The will be classed as an eligible business participant and the company/trust will be able to claim the JobKeeper payment, provided all necessary conditions are met.
If a business has both business income and passive income (e.g. interest and dividends) is the passive income taken into account when calculating the decline in turnover test?
No. The passive income is very likely to be input taxed income. Input taxed income is not taken into account when undertaking the decline in turnover test. It is specifically excluded from the definitions of “projected GST turnover” and “current GST turnover”.
Can a business be eligible for both the cash flow boost and JobKeeper?
Are employees who have returned from maternity leave eligible for JobKeeper assistance, even if there is no actual work for the employee to do?
Yes, provided they meet the “eligible employees” tests. Also note that employees who are currently on maternity leave with paid parental leave from their employer are also eligible for JobKeeper assistance. However if the employee receives paid parental leave or dad and partner pay under the Paid Parental Leave Act 2010 and the person’s paid parental leave period overlaps with or includes a fortnight in respect of which a JobKeeper payment may be paid, the person is not an eligible employee for JobKeeper for that fortnight.
Is a casual employee who has been with the organisation more than one year, but opted not to work due to COVID-19, eligible for JobKeeker assistance?”
If the employee’s decision not to work meant that they had terminated their employment: No Only a person who has been stood down or is on leave is considered to be an employee of their employer for the purposes of the JobKeeper payment. However, if the employee was on an approved absence from the organisation due to their concern about contracting COVID-19, but were still an employee of the organisation as at 1 March 2020 and satisfied the other “eligible employees” tests then: Yes
If a business does not satisfy the decline in turnover test at the start of the JobKeeper scheme, but does satisfy the test in a later test period, can the business apply for JobKeeper assistance from that later period?
Yes, if an entity does not qualify for, say, the month of April 2020 because its turnover has not been sufficiently affected, it can test in later months to determine if the test is met. This allows entities that only become affected part way through the six month period of operation of the JobKeeper scheme to continue to monitor for any decline in turnover until they qualify for the scheme in a later period. Also, if the business does not think it will have a sufficient decline in turnover for the month of April 2020, it can also undertake the test in relation to the June 2020 quarter. This can be done whether the business lodges its activity statements on a monthly or quarterly basis.
Once an entity satisfies the decline in turnover test does it need to retest its turnover in later months?
If a casual reaches 12 months service in April, can they qualify for the Job Keeper then?
No, the employee must meet the “eligible employee” tests as at 1 March 2020.
Can you pick which employees are eligible for jobkeeper?
No, if you decide to participate in the JobKeeper payment scheme, you must nominate all your eligible employees. You cannot choose to nominate only some employees. However, individual eligible employees can choose not to participate.
Can a sole trader receive JobKeeper payments when they are also an employee of another business?
No. An eligible business participant cannot be an employee (other than a casual employee) of another entity. If the sole trader is both a long term casual employee of another business and also an eligible sole trader, they can choose to either let their employer claim the JobKeeper payments on their behalf, or they can claim as a sole trader, but not both.
This document contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should speak to a licensed financial advisor who should assess its relevance to your individual circumstances. While The Field Group believes the information is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the corporations Act 2001.