JobKeeper Payments - what to do now?
We have all waited with bated breath for information about how we can go about claiming JobKeeper Payments (JKP) for our employees and which businesses and employees will be eligible.
In this blog we highlight the important points to help businesses identify whether they qualify, and how to go about making their claim.
JobKeeper Payment enrolments open today Monday 20 April 2020.
The package that was announced by the Australian Federal Government will inject $130 billion dollars into businesses significantly affected by the coronavirus. The package is open to businesses to enable them to pay their eligible employee’s salary and wages of at least $1,500 (before tax) per fortnight.
Government passed the legislation mid last week and the ATO has provided guidance on how the payments will be administered and some instruction on how to make your application.
Before getting into the detail of the eligibility criteria and the application process, it is important to note that the onus is on the business entity to get the entitlement, application and disclosures right when reporting to the ATO. Within the legislation there are also provisions which would require business entities who receive the JKPs to repay entitlements where the entity is found to be ineligible.
Eligibility Criteria
There are a number of eligibility criteria that businesses need to assess in order to claim the JKP. At a high level these criteria are that your entity must:
Have carried on a business in Australia as at 1 March 2020
Be satisfied it is not an excluded entity
Demonstrate that the employee has been paid at least $1500 per fortnight
Demonstrate that it has suffered a turnover decline of at least 30% (50% for entities with an aggregated turnover in excess of $1 billion and 15% for an ACNC-registered charity)
Its election to participate and give information about the eligible employees to the Commissioner before the end of the relevant fortnight and notify the individual in writing within seven (7) days.
Then, as far as your employees are concerned, essentially there is only one requirement - your employees must provide a notice to the employer in the ATO approved form that they meet requirements of an eligible employee and are not an excluded employee.
Enrolment & Application Process
Once you have determined that you/your business and your employees are eligible you will need to take the following steps:
Enrol for the JKP (applications will be made available through the ATO Business Portal from Monday 20 April 2020)
Notify your employees that you are intending to claim JKPs on their behalf using the ATO Employee Nomination Notice and ask them to return it to you by the end of April
Provide the details of your eligible employees to the ATO (you will need to confirm these details regularly throughout the JKP period)
You are required to review and confirm the eligibility of your claim for each employee each month and report any changes including employment terminations to the ATO. Where there is an overpayment to a business entity these payments will need to be paid back to the ATO.
It is important that you maintain the required documentation with respect to JKPs as the ATO has the authority to review your application to ensure the integrity of the support packages.
You can ready about the detailed process on the ATO Website
To ensure you receive your JobKeeper payments as early possible, you should enrol by the end of April. However, enrolments are open till the end of May if you need more time.
Sole Traders and other Entities
The JKPs also provide relief to self-employed individuals and non-employee active business participants. The process for claiming the JKP will be similar for sole traders and other entities however the application will be limited to one individual per entity and all other criteria will need to be satisfied.
Depending on your business structure there are lots of implications of nominating yourself as a recipient of the JobKeeper wage subsidy where you are not a salaried employee of your business entity. It's important to speak to your tax advisor before making this nomination.
Where to find help?
Treasury and the ATO have provided detailed information on how the various packages operate and how to access these funds.
Treasury - Economic Response to the Coronavirus
However, if you need help navigating the various support packages on offer we are here to help. Tax professionals can act on your behalf to enrol, apply and manage your JobKeeper payments. It is advised that you discuss your eligibility with a tax agent in order to ensure that you are legitimately receiving government assistance.
Understanding that many Australian businesses are doing it tough at the moment we would like to work with our clients and others requiring assistance by offering fixed discounted fees to assist your business access these funds.
What else?
Over the past month, both the federal and state governments have outlined a number of support packages to support Australians severely impacted by the economic downturn caused by Coronavirus. We have tried to summarise the support provided and provide some commentary on these packages to assist you in finding the support that you need.
If you are still unsure
You can book a free COVID-19 Consult and we can talk through your options