JobKeeper Scheme – Steps to apply
The Australian Taxation Office (ATO) has released further information regarding the JobKeeper payment.
Up until this point, all the ATO had available online was a form to register your interest in the scheme.
They now advise that application forms will be available from 20th of April.
They have also noted the following steps that must be undertaken:
- Check your employees meet the eligibility requirements.
- Arrange for all employees to complete the JobKeeper employee nomination notice and return it to you. This form doesn’t need to be sent to the ATO but the employer needs to keep it on file.
- Notify eligible employees who have selected ‘Yes’ on the nomination form that you are intending to claim the JobKeeper payment on their behalf.
- Continue to pay eligible employees at least $1,500 per fortnight. Note that the first fortnight starts 30th March 2020. As a reminder, under this scheme the employer needs to pay the employee first, before getting reimbursed monthly in arrears by the ATO. If you haven’t paid the employee during each subsequent fortnight you will not get reimbursed by the ATO. There is a ‘transitions exception’ to this where the first two fortnights, ending 12th April and 26th April, will be taken to have been paid on time if you pay the employees before the end of April.
- From the 20th April 2020 you need to enrol in the JobKeeper scheme.
- From 4th May 2020 you need to identify which eligible employees have been paid.
- Each month you will need to reconfirm that there has not been any changes with the eligible employees (eg. employee resigned).
As a reminder eligible employees:
- are employed by you (including those stood down or re-hired)
- were either a
- permanent full-time or part-time employee at 1 March 2020
- long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 March 2020 and not a permanent employee of any other employer
- were at least 16 years of age on 1 March 2020
- were an Australian resident as at 1 March 2020 within the meaning of the Social Security Act 1991, which requires that they reside in Australia, and are one of an Australian citizen, the holder of a permanent visa, or a Protected Special Category Visa Holder. Your employee can also be an Australian tax resident who is a Special Category (Subclass 444) Visa Holder. Employees who are not permanent residents of Australia must notify you of their visa status to allow you to determine if they are eligible.
- were not in receipt of any of these payments during the JobKeeper fortnight:
- government parental leave or Dad and partner pay
- a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work
- agree to be nominated by you
Eligible employers are:
- On 1 March 2020, you carried on a business in Australia or were a not-for-profit organisation that pursued your objectives principally in Australia.
- You employed at least one eligible employee on 1 March 2020.
- Your eligible employees are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired).
- Your business has faced a 30% fall in turnover (for an aggregated turnover of $1 billion or less)
- You are not an ineligible employer (in liquidation or bankruptcy)
Initially, the 30% reduction in turnover can be measure by comparing any of the following:
- March 2020 v March 2019
- Projected turnover for April 2020 v April 2019
- Projected turnover for May 2020 v May 2019
- Projected turnover for June 2020 v June 2019
- Projected turnover for June 2020 quarter v June 2019 quarter
Once you are in the scheme you remain in the scheme for its duration until the end of September 2020, regardless of what subsequently happens with your turnover.
This is also a ‘one in all in scheme’, so you cannot pick and choose which employees to make the payments to. If they are an eligible employee then you need to make the payment to them.
It is not however a compulsory scheme for employers to enrol. For employers who are still operating and paying employees anyway there are certainly some benefits in getting the wage subsidy. If you are an employer who is completely shut down then this scheme really only benefits the employees (which potentially includes the business owner depending on their structure) as they will be getting a higher payment than the Centrelink administered JobSeeker scheme.
For those employers who are not currently paying employees at all they will need to fund the wage payments up front, which could cost interest on an overdraft facility, they will need someone to administer the system and do the ongoing reporting requirements which could also cost money, and they are carrying the risk that if something goes wrong, they are the ones who the ATO will be asking for remibursement. Furthermore, at this stage we are not sure if these payments will be subject to Workcover or payroll tax in Victoria, so there are also potential on-costs an employer would need to cover, which they cannot deduct from the $1,500 per fortnight.
If you choose not to participate in the scheme for the time being, you can apply at a future point while the scheme is operation. They will not backpay you to 30th March in that case but you would be eligible going forward.
If you have any queries, please email: firstname.lastname@example.org.
This is a general summary only. For more information, please contact your Accountant.