On the 8th April 2020 the Government legislated the JobKeeper Payment measures to assist businesses impacted by Coronavirus in retaining their employees. The measure has now been further clarified with Treasury issuing an Explanatory Memorandum and Frequently Asked Questions guide, both of which are provided as links below.
Considering your eligibility for the JobKeeper Payment is now even more vital, as State Governments and Federal Governments are using it as the yardstick for which eligibility to other economic relief measures is assessed. For example, the recently announced Code of Conduct for commercial leases and the SA Government Emergency Cash Grants for Small Business, both rely on a business demonstrating eligibility for the JobKeeper program.
The JobKeeper scheme starts on 30 March 2020 and ends on 27 September 2020. Payment periods are measured on a fortnightly basis and the wage subsidy will be received by businesses a month in arrears, with the first payment occurring in the first week of May covering the period 30 March to 26 April (two fortnights).
A business that has suffered a substantial decline in turnover can be entitled to a JobKeeper payment of $1,500 per fortnight for each eligible employee. In order for an employee to be considered eligible that individual must be paid at least $1,500 per fortnight pre-tax. Self-employed individuals, or those operating through companies, trusts and partnerships may also qualify for this payment.
Currently, the two key issues in relation to your business qualifying for JobKeeper payments are:
- Continuing to pay your employees the minimum $1,500 pre-tax per fortnight; and
- Considering whether you believe you will suffer the threshold decline in turnover against a comparable period in 2019.
The turnover comparison periods allow for comparison against months March through September 2019, or a quarterly comparison against quarters ended 30 June 2019 or 30 September 2019. Note that a business is only required to meet the turnover requirement once to ensure eligibility to the JobKeeper Payments, meaning a later increase in turnover will not remove the ongoing eligibility.
There are two parts to the decline in turnover requirement:
- Determining the percentage decline threshold that applies to you (30% for businesses with aggregated turnover less than $1 billion, 15% for eligible ACNC registered charities and 50% for businesses with turnover exceeding $1 billion); and
- Determining if you will suffer that percentage decline.
The ATO is responsible for administering the JobKeeper payment and assessing eligibility. The detailed application requirements are unknown for those businesses that anticipate a reduction in turnover but cannot yet demonstrate that against a comparable 2019 period. The Commissioner of Taxation does have discretion to consider alternative tests. More information will be available in the coming days as ATO systems are finalised.
Below we have provided some helpful resources for you to consider. We strongly encourage you to contact our office for assistance or further information. We are available to assist with determining your eligibility and considering a strategy for your business.
Please contact our office on 8291 2111 with any queries or requests for assistance.