Corona Virus Update Bookkeeping
Below is a summary of the new piece of legislation that is due to be passed next week for your review and if you wish to participant, register using the ATO link provided below. As the Federal Government announces any further changes to the JobKeeper Subsidy Payment we will be sure to let you know.
The Federal Government has announced a $1,500-per-fortnight JobKeeper Subsidy Payment. We wanted to keep you up to date with the latest facts, figures and how we can help you take the next steps in moving forward with this newly created program.
We will be in touch once we know more around how to calculate the drop in business turnover for businesses still trading.
What is the JobKeeper Subsidy Payment?
The JobKeeper Subsidy Payment is a wage subsidy to be paid to Businesses, Sole Traders, Businesses Without Employees, Not for Profits and Charities, who have experienced a loss of at least 30 percent of their turnover relative to a comparable period a year ago (of at least a month). The payment will be made to employers at a flat rate of $1,500 per fortnight from 30 March 2020 for all employees that were employed as of March 1 2020.
Payments will be made from the first week of May backdated to 30 March and will continue for a maximum of 6 months. These payments are designed to keep employees on the payroll and connected to their business. Businesses will be required to prove that they are using the funds to subsidise wage payments to their employees and have a legal obligation to retain the employee.
Businesses can register their interest in applying for JobKeeper Payment via ato.gov.au from 30 March 2020.
- Register an intention to apply on the ATO website.
- Demonstrate that your business has or will experience the applicable 30% turnover decline.
- Provide information to the ATO on eligible employees engaged as at 1 March 2020 (including those stood down or rehired).
- Ensure that each eligible employee is paid at least $1,500 per fortnight (before tax).
- Notify all eligible employees that they are receiving the JobKeeper Subsidy Payment.
- Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
Eligible employees are employees who:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed by the employer at 1 March 2020;
- are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
- are at least 16 years of age;
- are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
- are not in receipt of a JobKeeper Subsidy Payment from another employer.
Businesses Without Employees
Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.
People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.
Frequently Asked Questions that relate to the JobKeeper Subsidy Payment
- What if the employee has been stood down?
- if the employee was employed as of 1 March 2020 the employer remains eligible to reinstate the employee and receive the payment.
- What if the employee has been made redundant?
- If the employee was employed as of 1 March 2020 the employer remains eligible to reinstate the employee and receive the payment. The government has noted that leave entitlements paid as part of the redundancy are yet to be worked through.
- Is superannuation payable on the JobKeeper Subsidy Payment?
- If the employee is usually paid $1,500 per fortnight before tax, the employer is required to pay superannuation on their full wage including the $1,500 supplement.
- If an employee earns less than $1,500 per fortnight before tax, the employer is only required to pay superannuation on the amount the employee earned as their normal wage, not on the additional amount received as part of the $1,500 payment that is in excess of the normal pay.
- If my employee works part time and is usually paid less than $1,500 per fortnight, does the business still receive the full $1,500 per fortnight?
- Yes, the employer will receive the full $1,500 per fortnight for the employee and the full $1,500 is required to be passed onto the employee.
- If my employee earns more than $1,500 per fortnight, does the business receive more than the $1,500 per fortnight?
- No, it is a flat $1,500 per employee, per fortnight, regardless of their income level.
- What if the employee has already applied for support through Centrelink?
- Provided the employee was employed as of 1 March 2020 they can transition back to the employer and be eligible for the payment.
- Are casuals eligible for the payment?
- If the casual has been employed with the employer for twelve months or more they will be eligible for the payment.
- Are those on temporary work visas eligible?
- The government has advised New Zealanders on 444 Visas are eligible for the payment. All other temporary visa holds will not be eligible at this point in time.
- When does it apply?
- Payments will be paid from the first week of May with payments backdated to the 30th March.
- How does my business apply for the payments?
- The business will need to complete a self-declaration that their revenue has reduced in line with the eligibility criteria via the ATO website.
- Can an employee access both the Centrelink benefits and the JobKeeper Subsidy Payment at the same time?
- No, the employee receiving the JobKeeper Subsidy Payment is not eligible to also receive the JobSeeker payment.
- My employee works part time in my business and as a casual in another business. Do they receive two payments of the $1,500?
- No, an employee may only receive the JobKeeper Subsidy Payment from one employer.