JobKeeper

The Australian Taxation Office (ATO) officially opened their JobKeeper application process on Monday the 20th of April.

Here’s what we know.

Where do I apply?

You need to log into the business portal on the ATO’s website using your MyGovID. If you don’t have access let us know and we’ll be happy to assist with this application.

Applications will remain open until the end of May, but businesses are being advised to apply before the end of April to receive payments as quickly as possible.

Note: if your business was using an AUSKEY login last month, you will need to switch over to a MyGov ID. (The system switched over at the start of April.)

How do I identify eligible workers?

Broadly, there are two ways to identify eligible workers and officially nominate them with the ATO; which option a business chooses will likely depend on whether they are single touch payroll (STP) enabled.

Businesses using STP reporting can identify their employees for JobKeeper participation through their payroll software, so long as their provider has updated its systems with new functionality. Most of you are on Xero which is great, they updated their functionality to deal with this over the weekend.

If you’re not on Xero but have a system lodging through STP you can use the ATO’s business portal, which should contain pre-filled payroll information from previous STP pay reports.

Firms not reporting through STP will need to manually identify employees through the business portal and ensure this information is kept up to date each month.

All applicant businesses are also required to notify eligible employees they will be nominating on their behalf.

Don’t forget, if an employee does not want to receive JobKeeper payments, they are allowed to opt-out.

What’s the latest on business eligibility?

I’m so glad you asked! Over the last week, the ATO has been busy outlaying more information about JobKeeper eligibility, which is sort of a prerequisite for opening applications.

Broadly, there are two ways to get accepted into JobKeeper: either passing the turnover test, or the ‘alternative’ test.

The turnover test

The turnover test, also being called the “basic test” is a five-step process.

  1. Identify the turnover test period (monthly or quarterly).
  2. Identify a relevant comparison period (the turnover test period, but in 2019).
  3. Determine relevant JobKeeper GST turnover (actual or projected).
  4. Determine which turnover reduction applies to you (30% for SMEs which aren’t charities).
  5. Work out if your turnover (step 1,2,3) has fallen by the required amount (step 4).

The alternative test

The alternative test is a bit trickier, mainly because there’s not as much information about who is eligible. Basically, the tax commissioner has the power to alter eligibility criteria for the scheme at any time using a legislative instrument which doesn’t require parliament to sit.

The ATO has confirmed a legislative instrument will be drafted to enable firms which have been in operation less than 12 months to participate in JobKeeper — but there’s no timeline yet, just “soon”.

Other examples given by the ATO of situations where the alternative test, used in cases where the “turnover test” is not appropriate, include firms which have undergone “major structural change” that might mean the turnover test does not accurately depict their drop off in trading conditions.

What do my workers need to do?

Employers need to give eligible workers JobKeeper Employee Nomination notices, which can be accessed here.

These forms must be completed and should be kept as records, but do not need to be sent to the ATO.

The form itself requests basic contact information and commits workers to declare their eligibility for the program.

Employees with multiple employers are allowed to choose which employer nominates them for JobKeeper payments but if they’re working as a long-term casual in one role and part-time in another, the part-time employer must take preference.

Do I need to hand over any other information?

Yes, plenty. The ATO wants businesses to prove their eligibility for the JobKeeper program in addition to providing contact and bank details.

Additionally, the ATO requires JobKeeper participating firms to make monthly declarations through the business portal about their eligible employees and turnover.

Each month participating businesses must reconfirm their eligible employees and notify the ATO of any change in employment circumstances.

Information must also be provided about current and projected GST turnover throughout the six month period the subsidy payments will last.

Interestingly, this data won’t be used to re-test eligibility. The ATO says it wants an “indication of how your business is progressing under the JobKeeper Payment scheme”.

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.

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