Note: this article deals only with businesses with turnover of less than $1B.
Which employers are eligible?
To be eligible, you need to satisfy certain rules. These are:
- 1. On 1 March 2020, you carried on a business in Australia.
- 2. You employed at least one eligible employee or your were a sole trader, partner or working director on 1 March 2020.
- 3. Your eligible employees are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired).
- 4. Your business has faced a 30% fall in turnover.
What about sole traders, partners, directors or trust beneficiaries?
Other businesses in the form of a company, trust or partnership can also qualify for JobKeeper payments where a business owner (a shareholder, adult beneficiary or partner) is actively engaged in the business, or a director is actively engaged in the business. This is limited to one entitlement for each entity even if there are multiple business owners or participants. We will provide more information soon about the eligibility of these businesses for the JobKeeper payment.
How to determine a fall in turnover
At the time you enrol in the JobKeeper payment scheme, you need to confirm that your business has had, or is likely to have, a 30% fall in turnover .
So, what does a 30% drop actually mean?
Well, there are three basic ways that you can satisfy this condition…
The first is to compare your turnover in March 2020 with your turnover in March 2019. If there’s a 30% drop, you satisfy this condition.
The second method is to estimate your turnover in April 2020 and compare it with April 2019. Again if there is a drop of 30% then you qualify.
Finally, you can choose to compare the whole quarter or you can choose to compare the whole quarter of April, May and June 2020 and compare that with the same quarter in 2019. If you anticipate a 30% drop this year you’ll pass.
The important thing about this scheme is that you only need to qualify once. You don’t need to show a 30% drop each and every month. Once you’ve qualified, you’re in for the whole program.
Which employees will be eligible?
Employers are not automatically entitled to receive JobKeeper payments for every employee. They only get the payments for eligible employees. Broadly, eligible employees are permanent employees (full-time or part-time) who are Australian citizens or Kiwis. Also included are long-term casuals who have been consistently employed by you for at least 12 months.
The program doesn’t include casuals that you have had for less than 12 months or any non-Australian or New Zealand citizens. Another important requirement is that the program is only available for employees who were on the books as at 1 March 2020.
What you’ll get.
The program pays $1,500 per eligible employee per fortnight. Some employees (particularly part timers) may not be currently earning $1,500 a fortnight, but if that is the case you have to top up their pay to $1,500 a fortnight. For employees earning more than $1,500 a fortnight, you still need to pay them their normal rate, unless of course you negotiate a reduction in hours with them .
When do you get it?
The first payments are scheduled be coming out in the first week May. The payments will be made to the nominated bank account which was specified in the application and it will be paid directly by the tax office. If you happen to have outstanding tax debts, the tax office will not use the JobKeeper payments to offset against your debt. If you’re eligible to be paid they will pay you even if you owe them money.
The payments in May will be in respect of the beginning of the program which officially starts on 30 March. So your payment in May will be for the previous month.
How to apply.
Here’s the really important bit. There are multiple steps involved in getting your application over the line. This video was made on 16th of April and at this point in time the only step available is to register your interest in the program. That simply puts you on a mailing list. And that’s just an optional step.
On 20th April the enrolment process begins. On that day we will be sending out an information questionnaire to all of our clients with an ABN in order to gather up the information we need to start the process. The questionnaire will be personalized for your specific circumstances and it will enable us to get your enrollment completed as quickly as smoothly as possible.
To do the enrolments, we’ll be using the tax agents portal which is our direct link to the ATO and we will be communicating with you along the way in order to keep you fully up-to-date with the process because we know how important this is for so many people.
But, enrolment is just the first step. On 4 May we then need to lodge the actual application to the ATO In which we identify all the eligible employees. Only after this is done, will the payments start to be released. Another important step is to prepare the employee notification forms which must be sent to all eligible employees. Employees will need to confirm the details and email the forms back. If you wish we could take care of this process as well
I’ve only just touched on some of the basics of this program. It’s a big program with a fair bit of complexity and new rules are coming along every day. We’ve worked very hard to build up the capability to ensure that everybody in our client base who is eligible for JobKeeper payments actually gets them and I’m really looking forward to helping you with this.