COVID-19 - Latest Update 13 April 2020
Aegis Business Services is here to support you!
Legislation is passed
At last we can confirm the following details below following the JobKeeper Payments passed through all levels of Parliament late last week. The Jobkeeper scheme has been put together to help Australians stay employed and businesses to stay in business which will lay the foundations for a stronger economic recovery once the Coronavirus crisis passes.
Below is a list of facts of a general nature, please make sure you contact us to discuss your particular circumstances. We are still waiting for particular reporting details to come through, but if you have not yet registered your interest for the JobKeeper scheme please do, it is not committing you to applying for it, but you will receive the latest information as it comes to hand. https://www.ato.gov.au/general/gen/JobKeeper-payment/
Who qualifies as an entity:
Businesses including self-employed individuals, charities registered with Australian Charities & Not-for-profits Commissions
Businesses whose annual turnover (for income tax purposes) of less than $1 Billion can estimate that it has fallen or likely to fall by 30%
Businesses whose annual turnover (for income tax purposes) is greater than $1 Billion can estimate it has fallen or likely to fall by 50% or
Australian Charities & Not-for-profits Commissions are eligible if they estimate their turnover has or will likely fall by 15% or more
relative to a comparable period.
Businesses without employees
These businesses will need to provide an ABN for their business, nominate an owner to receive the payment and provide that owner’s Tax File Number and provide a declaration as to recent business activity. The payment will be made monthly to that person’s bank account.
A company director who receives director fees and not a salary can receive the Jobkeeper payment. The company needs to meet the turnover decrease test and nominate only one director to receive the payment.
Trusts can receive the JobKeeper Payments where the beneficiaries of the trust only receive distributions, rather than being paid salary and
wages for work done, one individual beneficiary (that is, not a corporate beneficiary) can be nominated to receive
the JobKeeper Payment providing the trust meets the turnover decrease test.
One final note
- Businesses who experience a drop in turnover after 31 March 2020 are entitled to apply at that time with comparable figures and start to receive the Jobkeeper payments in arrears up until the 27 September 2020.
- Only turnover from Australian based sales are included in the calculation – a decline in overseas operations will not be counted in the turnover test
How to prove the drop in turnover (there is still further information from the ATO to come):
Initially based on the Business Activity Statement reporting period (relevant month or quarter) compared to the turnover in a corresponding
period a year earlier. Turnover is calculated as it is for GST purposes. It includes all taxable supplies and all GST free supplies but
not input taxed supplies.
If the business was not operational a year earlier or the comparable figures are not a true representation of the usual or average turnover
the Tax Commissioner has the discretion to consider additional information
It is important to keep accurate records as to how the turnover decline was calculated. Once the business satisfies the test, it will then
be considered as meeting the test for the period through to 27 September 2020.
Audits will be undertaken and if it is deemed that the business is not eligible for the JobKeeper Payments then the business will need to
pay back the JobKeeper payments and interest even though the payments have been paid to the employees.
Who qualifies as an employee:
- Must be recognised as an employee as at 1 March 2020 & continue to be engaged by the employer
- Permanent employee – either full or part time
- Casual employee who has had regular or systematic employment for at least 12 months prior to 1 March 2020
- Must be a resident for Australian tax purposes on 1 March 2020
- One of the following as at 1 March 2020:
- Australian Citizen
- Holder of a permanent visa
- Holder of a Special Category (Subclass 444)
- Are at least 16 years of age
- Employees receiving workers compensation if they are working, for example on reduced hours
- Employees on parental leave from their employer
- Employees who were stood down post 1 March 2020 or have been re-engaged post 1 March 2020.
Employers must elect to participate in the scheme by making an application to the ATO and providing supporting information demonstrating the
downturn in their business turnover.
- Employers must ensure that each eligible employee receives at least $1,500 per fortnight before tax.
- Employers must notify all eligible employees that they are receiving the Jobkeeper Payment.
Continue to provide information to the ATO on a monthly basis, including the number of employees employed by the business – in most cases
this will be done through Single Touch Payroll reporting.
Each individual payroll software is currently updating their systems to record the required information, please make sure you look out for
your software’s updates if you process your payroll.
Payments are made to the employer monthly in arrears by the ATO. However, for the month of April, the Commissioner can make an advance
Start date 30 March until the fortnight period ended 27 September 2020, first payments to be received by employers in the first week of
Back pay of payments will be permitted until 26th April for the first month. Eligible payments are considered when actual
payment made in the JobKeeper fortnight, with top ups allowed only for April until April 26th.
Links for further information:
Information for Employers: https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Info_for_Employers_2.pdf
Supporting Businesses to retain jobs: https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_supporting_businesses_2.pdf
Protecting Integrity: https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Protecting_integrity.pdf
Frequently Asked Questions: https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions_2.pdf
Information for employers: https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions_2.pdf
Information for employees: https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Info_for_Employees_2.pdf
We will continue to send through relevant updates as received but please remember we are available to answer any questions you may have regarding your specific circumstances.
The Team at Aegis Business Services