JobKeeper Payment wage subsidy – Update 16 April

Over recent weeks we have been keeping you up to date with our commentary around the various stimulus and support measures for Tasmanian businesses impacted by the COVID-19 pandemic. We have previously posted articles about the new JobKeeper Payment wage subsidy. Today’s post is a further update with important information that has just been released about this support package. 

If you manage or work for a charity or not-for-profit entity, the JobKeeper Payment wage subsidy is still applicable but the criteria is slightly different. Please refer to this separate article, also posted today, that is tailored to your sector. 

As previously advised, the Federal Government will subsidise wages for employees over the next 6 months with the aim to enable businesses to continue to operate during the COVID-19 crisis and start up again quickly once it is over. If you have not already done so, we suggest you contact any employees that you may have stood down to let them know you are considering your eligibility for this payment.  

Importantly, to be eligible for the JobKeeper Payments you have to pay your employees a minimum of $1,500 per fortnight (before tax) before the end of the fortnight. 

However, for the first two fortnights (30 March – 12 April and 13 April – 26 April) you have until the end of April to make the payments. If you enter the scheme now and pay your employees by 30 April, the ATO will reimburse you $1,500 per employee, per fortnight backdated to 30 March. However, the ATO won’t make the first backdated reimbursements until the first week of May.   

You can also choose to enter the scheme after April and receive the payments from the time you enter the scheme.  

Employees do not need to have been stood down to be eligible for the payment and if you had to fire your employees after 1 March you can rehire them now (even if you immediately stand them down) and still be eligible for the payment. 

Amount 

• All eligible businesses will be reimbursed $1,500 per employee per fortnight. 

• The reimbursement will be paid by the ATO monthly in arrears 

• Employees that are stood down must be paid a minimum of $1,500 a fortnight 

• Employees that are working must be paid the greater of either: their normal salary; or $1,500 a fortnight 

• If your normal pay cycle is greater than a fortnight you can allocate the payments on a reasonable basis. In this case, the ATO will need to be satisfied you have paid each employee a minimum of $3,000 for every 4 week period. 

Eligibility 

• Available to businesses whose turnover has fallen by 30% or more (unless turnover is $1 billion or greater – then 50% fall in turnover required) 

• Available to charities registered with the ACNC whose turnover has fallen by 15% or more. Also available on the same terms to endorsed Deductible Gift Recipients that aren’t registered with the ACNC. 

• Available for full, part-time employees as well as casual workers that have been employed for 12 months or more 

• Only employees that were employed as at 1 March 2020 are eligible 

• Sole traders, companies, trusts and partnerships can nominate one individual that isn’t an employee but is actively involved in the business to also receive the payment

  • sole trader – the individual must be the sole trader entity; 
  • partnership – the individual must be a partner in the partnership; 
  • trust – the individual must be an adult beneficiary of the trust; and 
  • company – either a director or shareholder in the company. 

• As at 1 March employees or nominated individuals must also: 

  • be at least 16 years of age  
  • be Australian permanent visa holder or citizen; or Australian resident for tax & NZ citizen 

• Employers must notify all employees that they are opting into the scheme 

• Employees must agree to receive the payment and can only receive the payment from one employer 

Superannuation 

• For employees continuing to work normal duties, superannuation guarantee will apply to employees’ wages as normal. However, where an employee’s normal wages are less than $1,500 (before tax) the employer is not required to pay superannuation guarantee on the extra amount.  

• For example, if an employee earns $1,000 a fortnight for the hours they work, the employer must pay the employee $1,500 total as wages and 9.5% superannuation on the $1,000 but no superannuation on the additional $500 

• If the employee is stood down and not performing any duties, then you don’t need to pay any superannuation  

Leave  

• JobKeeper Payment can be used to pay an employee that is on leave or on leave at half pay 

• Employers in the JobKeeper scheme can request an employee take annual leave unless it would result in reducing the employee’s leave balance to less than two weeks. 

• All leave entitlements accrue as normal for stood down employees or employees that have had their hours reduced due to the crisis. 

Testing decline in turnover 

• You need to compare your projected turnover with your actual turnover in the same period last year.  

• If last year doesn’t provide a reasonable comparison – e.g. because your business was suffering due to drought or your business wasn’t operating last year, you can apply to the ATO to use a different comparison period. 

• Projected turnover – consider supplies you have made or likely to make in the period 

• Comparison turnover – consider supplies you actually made 

• Supplies include everything apart from input taxed supplies 

• The testing periods for the turnover comparison can be one month or three months  

• If choosing one month it must be a calendar month between March and September 

• If choosing 3 months – must be the April to June or July to September quarters 

• The testing period doesn’t have to align with your BAS reporting (monthly or quarterly) 

• You only need to satisfy the decline in turnover test once, however, you need to continue to provide the ATO with turnover information monthly 

What you can do right now 

• Notify your employees that you intend to enter the JobKeeper scheme and obtain their written approval by using this Employee Nomination Notice (you don’t need to give this to the ATO, just retain on your file). 
  
  
• Set up your myGovID which you can do here 
  
  
• Link your myGovID to your ABN through Relationship Authorisation Manager (RAM). To do this, you will need to make sure that you are a listed contact on the Australian Business Register (ABR) for your ABN. We can help you update the ABR details if you need.  
  
  
• Once you do the above, ensure you can access the Business Portal here  
  
  
• From 20 April you can enrol for the JobKeeper payment on the Business Portal. Note that even if you have already registered your interest with the ATO, you will still need to enrol in the scheme. 
  
  
• From 4 May confirm which employees you want to claim the JobKeeper Payment for on the Business Portal 

More information is available here:

JobKeeper Payment – Frequently Asked Questions 

JobKeeper Payment: Supporting businesses to retain jobs 

ATO information 

Please contact your WLF Advisor if you have any additional questions