JobKeeper registration open
To receive the payment, both the employer and the employee need to qualify. So you might have a business where the employer qualifies but the employee doesn’t. Or the employee qualifies but the employer doesn’t. You need both in order to be eligible.
As an employer your business must meet the following conditions at the time of applying to be eligible. Let’s call it the Turnover Test.
The Turnover Test
Your turnover has or – by your estimate – will fall by at least a certain percentage relative to a comparable period.
This percentage 30% for all businesses with a turnover of $1b or less. Those with a consolidated turnover of more than $1b need a drop in turnover of 50% in order to qualify.
This test can be rather simple to pass if you are in lock down; or quite challenging if you are still operating but your clients or customers have stopped paying.
You compare your current turnover to the turnover of a comparable period, but what is a comparable period?
It doesn’t matter whether you are a quarterly lodger or a monthly lodger. So as a quarterly lodger, you can still compare months. And as a monthly lodger, you can compare quarters.
If last year’s period is not representative – you might be a new business or went through a big expansion or acquisition – then you can use a so-called ‘alternative test’. You need to present additional information to show how COVID-19 adversely affected your turnover.
The Tax Commissioner will have discretion to consider this information and decide whether you are eligible under your specific circumstances.
Turnover is based on what is reported in your Business Activity Statements (BAS). So your turnover includes all taxable supplies and all GST free supplies but not input taxed supplies.
Do you use cash or accrual? It depends on how you calculate turnover for GST. If you calculate your turnover based on cash, you use cash. If you use accruals, you use accruals.
What happens if you get this wrong? You think your turnover will drop by 31% but then it actually just dropped by 29%. What happens then?
The Treasury’s fact sheet writes this, “There will be some tolerance where employers, in good faith, estimate a 30 per cent …or more fall in turnover but actually experience a slightly smaller fall.”
So small variations should be fine.
The employer must qualify, but that is not enough. The employee must qualify as well. To qualify an employee must meet five conditions. The employee must be – as of 1 March 2020:
1 – An Australian citizen, permanent resident or a subclass 444 visa (NZ);
2 – An Australian resident for tax purposes;
3 – At least 16 years old;
4 – Not receiving Parental Leave Pay from Services Australia;
5 – A full time, part-time or long-term casual employee.
A long-term casual employee has been with their employer on a regular and systematic basis for at least the previous 12 months as at 1 March 2020.
Employees on parental leave from their employer will be eligible.
For employees on workers compensation it all depends on whether they were working on 1 March 2020 or not. If they were working, even if just on reduced hours, they qualify. If they were not working, they don’t.
1 March 2020
It all depends on the 1 March 2020. Even if an employee was stood down after 1 March, they can still qualify as long as they meet all five conditions as of 1 March 2020.
The Jobkeeper payment is not an automatic payment like the cash flow boost. Instead you need to enrol, outlining how you were affected by the crisis and providing the relevant details. Enrolments open on 20 April 2020. To claim the Jobkeeper payment for April, you need to enrol by 30 April, so you just got 10 days.
What you have done so far (16 April 2020) is just an ‘expression of interest’.
You must pay at least $1,500 per fortnight for each employee you put on Jobkeeper payments. PAYG withholding applies as if this was a normal wage payment.
As an eligible employer, you then receive the Jobkeeper payment at the start of the following month in arrears.
So while you pay your employees fortnightly, the Jobkeeper payment is paid monthly, resulting in a cash flow gap you need to fund.
No superannuation guarantee payments are required to be paid on the Jobkeeper Payment.
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May.
WHAT TO DO NEXT – REGISTRATION PROCESS
We at JMp accountants can assist you on an ongoing basis with both the registration process and with the ongoing fortnightly reporting, alternatively you can do it yourselves by logging on to the business portal account which is verified by MyGov ID.
Once you have established that your business qualifies, you NEED to get each eligible employee to fill out and return to you a JobKeeper Employee Nomination Form. Without this, you cannot pay them.
If we are preparing on your behalf, we will also require that you provide us with a signed declaration confirming that you meet the reduction in turnover test and in addition also provide us with originals of all employee nomination forms.
As always, please do not hesitate to contact us.