Job Keeper – Your Urgent Attention
Last week the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 and the Rules were passed by parliament.
This Act and the accompanying rules with explanatory memorandum encapsulates the rules for receiving the JobKeeper payment.
Light reading can be found here: https://www.legislation.gov.au/Details/F2020L00419
The JobKeeper payment requires an application to the ATO. The ATO application is almost ready.
The ATO have provided a link to register your interest in the JobKeeper payment (LINK BELOW), so the ATO can contact you when applications are ready.
The ATO have furthermore updated their website to include the most recent developments.
The Link is here: https://www.ato.gov.au/general/JobKeeper-Payment/
What to do next….
If you would like Economos to handle to JobKeeper matter for you:
- Please let us know ASAP that you want us to assist you with the matter
- There will be an administrative fee for any applications and ongoing reporting made on your behalf
If you would like to look after the JobKeeper matter yourself:
- Make yourself familiar with the JobKeeper legislation https://www.ato.gov.au/general/jobkeeper-payment/employers/enrol-and-apply-for-the-jobkeeper-payment/
- Be mindful of the timing rules. If you want to receive the first or second JobKeeper payment you have until 26 April 2020 to provide the Commissioner with an election to participate.
- Please let us know that you want to look after the JobKeeper matter yourself
Due to the matter above being time critical, you may receive numerous, similar emails from our office.
Underneath some quick discussion points from an initial reading of the legislation and explanatory memorandum:
- Businesses need to understand Jobkeeper in fortnights. Each of the following is a “JobKeeper fortnight”:
i) the fortnight beginning on 30 March 2020; and
ii) each subsequent fortnight, ending with the fortnight ending on 27 September 2020.
- Businesses need to nominate to participate (with the ATO)
- Employees need to respond in writing to employers that they agree to be nominated to participate (this response does not need to be sent to ATO)
- Once an employer decides to participate in the JobKeeper scheme and their eligible employees have agreed to be nominated by the employer, the employer must ensure that all of these eligible employees are covered by their participation in the scheme. The employer cannot select which eligible employees will participate in the scheme. This ‘one in, all in’ rule is a key feature of the scheme
- qualifying employers that decide to participate in the JobKeeper scheme must, as a condition of entitlement, notify all employees in writing that they have elected to participate in the scheme and that their eligible employees will all be covered by the scheme (if the employee so agrees).
- The nomination requirements in subsection 9(3) of the Rules require an employee to provide a notice in the approved form to their employer agreeing to be nominated by the employer for the purposes of the JobKeeper scheme: The employee:
- Agrees to be nominated by the employer as an eligible employee under the JobKeeper scheme as the employer with which the employee will participate in the JobKeeper scheme;
- that they confirm they have not agreed to be nominated by another employer; and
- that they do not have permanent employment with another employer if they are employed as a casual employee with this employer.
The required wording and forms are available on ATO.gov.au
- Once an entity satisfies the Turnover test in March or April it does not need to retest its turnover in later months.
- The Test periods for the turnover test being compared by can be periods of one month or three months (if three months, then those Quarters reporting periods begin 1 April 2020, and 1 July 2020)
- An alternative decline in turnover test applies if there is not an appropriate relevant comparison period in 2019. This might be the case for a new business, started for example in January 2020 or a business that made a major business acquisition in 2020.
Components of the $1500
- The component amounts that together must equal or exceed $1,500 are
i) salary and wages
ii) PAYG WHT
iii) super contributions
iv) Salary sacrifice
- The requirement that the component amounts be at least $1,500 applies regardless of whether the employee ordinarily receives more or less than that amount.
- If an employer’s ordinary arrangement is to pay its employees less frequently than fortnightly, then the payment can be allocated between fortnights in a reasonable manner.
- There are timing rules. Where the employer wishes to participate in the scheme and receive the first or second JobKeeper payment (relating to the JobKeeper fortnights commencing on 30 March 2020 and 13 April 2020 respectively the employer has until the end of the second JobKeeper fortnight, that is, 26 April 2020, to provide the Commissioner with its election to participate;
- A business owner is entitled to participate even if they are not an “employee”
i) Sole trader
ii) Beneficiary of a trust
iii) Director or shareholder of company
iv) Partner in a partnership
The individual must be actively engaged in the business
- Under s.16 of the ACT participation in the JK scheme requires monthly reporting
- The Jobkeeper scheme effectively ceases after the last Jobkeeper fortnight – after 27 September 2020.
But importantly please register your interest and please explicitly advise if you wish us to register for you and maintain reporting (fees will apply).