Please see below for an update on the JobKeeper payment program, including

Notes of whether you should register if unsure how much turnover will drop

Partners, company directors and shareholders and trust beneficiaries can be eligible to receive the JobKeeper payment.

Notes about the turnover test for the 30% decline and the current lack of clarity about calculations and information requirements

Government FAQ’s on the JobKeeper program

 

Should you register if you are unsure how much turnover will drop

The short answer is yes, however be prepared that you may have to repay the JobKeeper payments you have received if your turnover doesn’t drop by 30%.

It doesn’t appear that the ATO will penalise you for registering and receiving JobKeeper payments if you think your turnover will drop by around 30% but if it actually doesn’t drop by this amount, other than most likely requiring you to repay the JobKeeper payments you have received.

If you apply later after your turnover has dropped, you will not be able to backdate your payments to the start of the payment period (30 March) and thus may miss out on the total payments available.

For this reason, if you have a reasonable expectation that your turnover will drop by around 30%, you should apply now. It may be best to ensure you retain enough funds to repay the JobKeeper amounts should your turnover not decrease by 30% and the ATO request the funds back.

The government has stated that “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.” We will have to see how the ATO apply this.

Register for JobKeeperat https://www.ato.gov.au/Job-keeper-payment/

 

Partners, company directors and shareholders and trust beneficiaries can be eligible to receive the JobKeeper payment.

They must be active in the business but don’t declare a wage through the payroll system and the business must be actively trading.

Eligibility is limited to one person per entity.

Paperwork required

The individual must have given a nomination notice stating that:

(i)  they satisfy the requirements to receive the JobKeeper payment; and

(ii)  they agree to be nominated as the person eligible to receive the jobkeeper payment.

The notice must be provided to either the entity for a partnership, company or trust.

A sole trader must provide this notice to the ATO.

There is not yet detail on exactly how to provide this notice to the ATO for sole traders.

A template for this notice is attached to this email.

Unless you are a sole trader, the entity must notify an individual receiving the payment in writing within 7 days of giving the ATO details of the individual.

There are exclusions relating to parental leave pay, dad and partner pay, whether an individual is incapacitated and unable to work.

 

Summary of ATO requirements for partners, directors, shareholders or trustees

  1. Register for JobKeeper here, https://www.ato.gov.au/Job-keeper-payment/
  2. Ensure whoever is receiving the payment provides a nomination notice to either the entity or for sole traders, to the ATO (see template attached)
  3. Provide details of the individual who will receive the payment to the ATO after registering for JobKeeper
  4. Notify the individual in writing within 7 days of providing details to the ATO, stating they will receive the payment.

There is still a lack of clarity about how the turnover test will be applied and what information the ATO will require.

The legislation refers to a turnover test period as

                              (i)  a calendar month that ends after 30 March 2020 and before 1 October 2020; or

                             (ii)  a quarter that starts on 1 April 2020 or 1 July 2020;

The government fact sheet refers to ‘most’ businesses using their standard BAS reporting period as being used to calculate and compare turnover.

It is unclear whether you are allowed to calculate turnover on a monthly basis if you lodge quarterly BAS’s.

It’s also unclear if there will be monthly reporting of turnover and whether you have to repay the JobKeeper payment if your turnover varies less than 30% in one month or one BAS period, but over the 6 month Jobkeeper period is still down by more than 30%.

The fact sheet states you must “Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business” but doesn’t state exactly what other information is required.

There should be clarification from the ATO soon.

GOVERNMENT FREQUENTLY ASKED QUESTIONS AND ANSWERS

Below is a list of frequently asked questions and answers from https://treasury.gov.au/coronavirus/jobkeeper

HOW TO PARTICIPATE

You need to register your interest on the ATO website to keep updated on information about the JobKeeper Payment. If you register you will receive updates and information from the ATO about how and when to claim the JobKeeper payment.

Register here https://www.ato.gov.au/Job-keeper-payment/

WHAT ARE THE PAYMENT DATES

The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May.

Businesses will be able to register their interest in participating in the Payment from 30 March 2020 at ato.gov.au.

The payments are until 27 September 2020

The payments will be made by the ATO monthly in arrears.

MY TURNOVER HAS NOT DECREASED BY 30 PER CENT THIS MONTH, BUT I BELIEVE IT WILL IN THE COMING MONTH. AM I ELIGIBLE?

You can apply for the payment if you reasonably expect that your GST turnover will fall by 30 per cent or more (or 50 per cent or more for businesses with an aggregated turnover of $1 billion or more) relative to your GST turnover in a corresponding period a year earlier. The ATO will provide guidance about self-assessment of actual and anticipated falls in turnover.

IT IS UNLIKELY THAT MY TURNOVER WILL DECREASE BY 30 PER CENT IN THE COMING MONTH, BUT CAN I APPLY LATER IF MY TURNOVER DECREASES IN ONE OF THE SUBSEQUENT MONTHS?

If a business does not meet the turnover test as at 30 March 2020, the business can start receiving the JobKeeper Payment at a later time once the turnover test has been met. In this case, the JobKeeper Payment is not backdated to the commencement of the scheme. Businesses can receive the JobKeeper Payments up to 27 September 2020.

IF I HAVE STOOD DOWN MY EMPLOYEES WITHOUT PAY AFTER 1 MARCH 2020 CAN I ‘BACK PAY’ THEM TO 30 MARCH 2020?

Yes. If you want to claim the JobKeeper Payment for your employees you will need to confirm your eligible employees want to be part of the scheme and arrange for them to be paid a minimum of $1,500 per fortnight before tax from 30 March 2020.

I LET MY EMPLOYEES GO AFTER 1 MARCH 2020. IF I RE-HIRE THEM, AM I ELIGIBLE TO RECEIVE THE PAYMENT?

Yes. You can receive the JobKeeper Payment if you re-hire any eligible employees you had at 1 March 2020. You can receive the payment even if you then need to immediately stand them down, so long as they remain employed. W

AM I REQUIRED TO PAY PAYGW AND SUPERANNUATION ON THE JOBKEEPER PAYMENT?

The $1,500 per fortnight per employee is a before tax amount. You withhold income tax as appropriate.

Where an employee is paid more than $1,500 per fortnight, the employer’s superannuation obligations will not change.

Where an employee is having their wages topped up to $1,500 per fortnight by the JobKeeper Payment, it will be up to the employer if they want to pay superannuation on any additional wages paid by the JobKeeper Payment.

WHAT HAPPENS IF MY EMPLOYEE RESIGNS?

If an employee for whom you are receiving the JobKeeper Payment resigns, you must notify the ATO. You may need to refund some money to the ATO.

I PURCHASED A BUSINESS IN THE LAST 12 MONTHS AND RETAINED SOME CASUAL EMPLOYEES WHO WORKED FOR THE PREVIOUS BUSINESS OWNER. ARE THE CASUAL EMPLOYEES ELIGIBLE?

Employers must assess whether their casual employees satisfy the test of working for 12 months on a regular and systemic basis. A casual may still meet this condition even if the entity operating the business has changed recently.

WHAT SHOULD I DO IF I WANT TO RE-HIRE AN ELIGIBLE EMPLOYEE WHO RECEIVED A REDUNDANCY PACKAGE?

If an eligible employee has received a redundancy package and you wish to re-hire them, you will need to consult with the employee and consider prevailing workplace arrangements to settle redundancy terms.

WILL THE ATO USE THE JOBKEEPER PAYMENTS TO OFFSET A BAS DEBT?

The payment will generally be paid directly to the employer and not used to offset tax liabilities, as the intent is that it is a payment that facilitates employers to pay their employees.