What is the JobKeeper Payment?

The JobKeeper payment scheme is a $130b scheme which will be paid to eligible employers to subsidise wages of businesses impacted by the Coronavirus. Under the scheme, eligible businesses will receive $1,500 per fortnight per eligible employee/business participant. The scheme will be paid for a period of up to six months (from 30th March 2020 to 27th September 2020) with enrolment opening on Monday 20th April 2020.

The JobKeeper payment will ensure that eligible employees/eligible business participants receive a gross payment (before tax) of at least $1,500 per fortnight for the duration of the scheme.

 

Eligible Employers

Eligible employers are those employers that:

  • Carried on a business or were a not-for-profit operating in Australia on 1st March 2020; and
  • Meet the decline in turnover test (see detail below); and
  • Were not specifically excluded from the scheme (eg. Major Bank Levy, one that is in liquidation)

The Turnover Test

To be eligible for the JobKeeper payment, the employer must meet the decline in turnover test. This is a once only test (ie. once the test has been satisfied, there is no requirement to retest in later months). However, if an entity is not expecting to meet the test, they can access the scheme at a later date with payments beginning from the fortnight of enrolment.

The turnover test requires the GST turnover/projected GST turnover of those businesses with a turnover of less than $1b to have fallen/be expected to fall by 30% or more in comparison to the same period in 2019. The turnover test periods can be either a calendar month between March and September 2020 or quarters starting 1st April 2020 or 1st July 2020. The test periods are not required to align with the BAS lodgement period of the entity.

As at today, the periods which could be used as comparison to meet the turnover test are:

  • Actual March 2020 GST Turnover and Actual March 2019 GST Turnover
  • Projected April 2020 GST Turnover and Actual April 2019 GST Turnover
  • Projected April-June Quarter 2020 GST Turnover and Actual April-June Quarter 2019 GST Turnover

Alternative to decline in turnover test

If the business is unable to satisfy the turnover test, for example where an entity does not have a relevant comparison period because they are a new business or have acquired a business during these periods, they will need to apply to the Commissioner for a determination to use an alternative test.

 

Eligible Employees

A business can only claim JobKeeper payment for eligible employees who meet the wage condition (see detail below). It is ‘one in, all in’ for eligible employees, the business cannot chose who will receive the payment.

An eligible employee is an employee who:

  • Is currently employed by the employer (including those stood down or re-hired)
  • Was employed as at 1st March 2020
  • Is a full-time or part-time employee, or long-term casual:
    • An individual is a long term casual employee of an entity if employed by the employer on a regular and systematic basis for longer than 12 months as at 1st March 2020
    • If the employee is a long-term casual, cannot be a permanent employee of another employer
  • Was at least 16 years of age on 1st March 2020
  • Was a resident of Australia for social security purposes or a resident of Australia for tax purposes and holder of a Subclass 444 Visa at 1st March 2020
  • Has not given another employer nomination notice (refer below)
  • Not receiving government funded parental pay, dad or partner pay or fully supported by workers’ compensation.

Additionally, if an employee is eligible based on the above criteria, the ATO requires an employer to complete a JobKeeper employee nomination notice to notify employees that they intend to participate in the scheme. The employee must indicate if they agree to be nominated and receive the payment before the employer can proceed. 

Wage condition

To be eligible, the employer must have paid at least $1,500 (before tax) to the employee in the respective JobKeeper payment fortnights. See below how this payment requirement will operate.

The ATO has confirmed that it will accept the minimum $1,500 payment for each of the first two fortnights (30th March to 12th April, and 13th April to 26th April) as being paid to the employee even if it is paid late, as long as this is paid by end of April.

The requirement that the employee receives at least $1,500 per fortnight applies regardless of whether the employee ordinarily receives more or less than that amount.

Employee has been receiving

more than $1,500

The employee will continue to receive their regular income according to their workplace arrangement. The JobKeeper payment will subsidise the first $1,500.

Employee has been receiving

less than $1,500

The employer will be required to pay the employee a ‘top-up’ payment to ensure they are paid at least $1,500. Some employees will therefore receive more than their usual workplace arrangement.

Note that superannuation is only payable on their actual employment wages, disregarding any extra payments made to satisfy JobKeeper.

Employee stood down after

1st March 2020

The employer must pay $1,500 per fortnight to be eligible for the JobKeeper payment.

Note that superannuation is not payable if the employee is not working.

Employed at 1st March 2020 who ceased employment and has been re-hired

The employer must pay $1,500 per fortnight to be eligible for the JobKeeper payment.

Note that superannuation is not payable if the employee is not working.

 

JobKeeper Fortnights

1

30 March 2020 – 12 April 2020

2

13 April 2020 – 26 April 2020

3

27 April 2020 – 10 May 2020

4

11 May 2020 – 24 May 2020

5

25 May 2020 – 7 June 2020

6

8 June 2020 – 21 June 2020

7

22 June 2020 – 5 July 2020

8

6 July 2020 – 19 July 2020

9

20 July 2020 – 2 August 2020

10

3 August 2020 – 16 August 2020

11

17 August 2020 – 30 August 2020

12

31 August 2020 – 13 September 2020

13

14 September 2020 – 27 September 2020

 

Eligible Business Participants (EBPs)

An eligible business participant is an individual who is actively engaged in the business carried on in one of the following structures (who is not paid a wage):

  • Sole trader
  • Partnership
  • Company
  • Trust

To be eligible for the JobKeeper payment as an eligible business participant, the following criteria must be met:

  • The business meets the turnover test as described above
  • The business had an ABN on or before 12th March 2020 and either:
    • Had an amount included in its assessable income for the 2019 income year and this was included in the income tax return and lodged on or before 12th March 2020; or
    • Made a supply during the period 1st July 2018 to 12th March 2020 and lodged a BAS for any of these periods by 12th March 2020
  • The individual was:
    • Actively engaged in the business as at 1st March 2020
    • Not entitled to another JobKeeper payment as an eligible business participant or employee
    • Not a permanent employee of any other employer
    • At least 16 years of age at 1st March 2020
    • A resident of Australia for social security purposes or resident of Australia for tax purposes and holder a Subclass 444 Visa at 1st March 2020

A claim can be made for one Eligible Business Participant (EBP) per entity:

Entity

Limitation

Company

  • Claim limited to one shareholder; or
  • Claim limited to one director

Trust

  • Claim limited to one adult beneficiary

Partnership

  • Claim limited to one partner

 

Enrol for the JobKeeper Payment (20th April 2020 onwards)

The business or Power Tynan can enrol for the JobKeeper payment:

  • Step 1: Register your interest and subscribe for JobKeeper payment updates
  • Step 2: Check you and your employees meet the eligibility requirements
  • Step 3: Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30th March to 12th April - ensure any back payments are made by 26th April)
  • Step 4: Notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming JobKeeper payment through another employer, or have nominated through another business
  • Step 5: Send JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April - keep it on file and provide a copy to your registered tax agent if you are using one
  • Step 6: From 20th April 2020, you can enrol with ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID - you must do this by the end of April to claim JobKeeper payments for April
  • Step 7: In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader
  • Step 8: Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30th March – 12th April) and the second JobKeeper fortnight (13th April – 26th April)

 

Confirmation of eligible employees you will claim JobKeeper Payments for (available from 4th May 2020)

You or Power Tynan can apply for the JobKeeper payment for your eligible employees:

  • Step 1: Apply to claim the JobKeeper payment by logging in to the ATO Business Portal
  • Step 2: Ensure you have paid each eligible employee a minimum of $1,500 per JobKeeper fortnight before tax
  • Step 3: Identify your eligible employees in the application form by
    • selecting employee details that are prefilled from your STP pay reports if you report payroll information through an STP enabled payroll solution, or
    • manually entering employee details in ATO Online Services or the Business Portal if you do not use an STP enabled payroll solution, or
    • using a registered tax agent who will submit a report on your behalf through Online Services for Agents
  • Step 4: Submit the confirmation of your eligible employees online and wait for the confirmation screen
  • Step 5: Notify your eligible employees you have nominated them
  • Step 6: The ATO will pay you the JobKeeper payment for all eligible employees after receiving your application
  • Step 7: Each month, you will need to reconfirm that your reported eligible employees have not changed through ATO Online Services, the Business Portal or via your registered tax agent. This will ensure you will continue to receive the JobKeeper payments from the ATO. You do not need to retest your reported fall in turnover, but you will need to provide some information as to your current and projected turnover. This will be done in your monthly JobKeeper Declaration report.
  • Step 8: If your eligible employees change or leave your employment, you will need to notify the ATO through your monthly JobKeeper Declaration report

If you use the ATO Business Portal, you will need a myGovID linked to your ABN in Relationship Authorisation Manager (RAM). You can set this up at ato.gov.au/mygovid

 

Key Dates

1st March 2020

Key date for eligibility to JobKeeper payments for employers & employees

30th March 2020

First day of the first JobKeeper Fortnight

20th April 2020

Employers enrolment opens with the ATO

26th April 2020

Last chance to backpay any employees for the first two fortnights

4th May 2020

ATO confirmation of eligible employees.

JobKeeper payments able to be lodged – employers must notify employees that they have been nominated within 7 days of lodgement

27th September 2020

Last day of the last JobKeeper fortnight

 

Monday 20th April 2020

9am

In conjunction with Knowledge Shop, Power Tynan will be running a FREE webinar in relation to the JobKeeper Payment Scheme.

To register, click here

 

 

Further Information

Employers Guide to JobKeeper Scheme - https://www.sharpews.com.au/post/news-alert-the-employers-guide-to-jobkeeper-scheme-flexibilities

ATO - https://www.ato.gov.au/General/JobKeeper-Payment/

Treasury - https://treasury.gov.au/coronavirus/jobkeeper

NTAA Fact Sheet - Fact sheet - NTAA