JobKeeper Payment Q & A

Got JobKeeper Payment Questions?   We’ve Got Some Answers!   

 Start here for the essential facts – Jobkeeper Payment Key Information Table – PDF

Our clients have raised very valid questions and concerns regarding how they can access this funding.  Below we have outlined some of the more common and important questions you need to address in order to ensure your business gets the support it needs. 

We note that some of the detail is still to be released regarding the JobKeeper Payment.  More details should come to hand over the coming days and weeks as the treasurer and the ATO work together to put in place the systems and processes to manage this support package. 

We urge you to stay vigilant regarding any information released over the coming weeks to ensure you don’t miss out or have your payment delayed. 

THE BACKGROUND 

Why Is the Government providing support in this way? 

This government subsidy is to support businesses to remain connected with their employees despite the effect of COVID-19.  It can provide support to businesses in a few ways: 

  • It will provide a cashflow injection into the business to help fund wages 
  • This cashflow injection can occur even if the business has no work for the employee/s 
  • It is designed to keep the employee “connected” to the business.  When the business is able to become fully operational againthe employees can be easily stepped up to their usual roster again without the disruption of having to re-recruit a new workforce.   

Why is keeping my employees connected to the business so important? 

Keeping your employees on the payroll provides support for the business and your employees in several ways: 

  • More than likely your employee won’t need to find another job to support themselves during this difficult time. 
  • Your employees won’t need to engage with Centrelink to access unemployment benefits. 
  • If the employees remain connected to the business, you won’t need to recruit and train new staff once your business is ready to gear up again 
  • Even though you might not have a full workload for the staff you can utilise them to tackle other often neglected matters – eg.  processes and procedures, marketing, business planning, deep cleaning, training etc. 

HOW TO ACCESS THE JOBKEEPER PAYMENT 

As an employee what can I do to ensure that my employer accesses the JobKeeper payment for me? 

It is the employer that is eligible for this support from the government.  Not all employers will be eligible.   

The employer will need to meet the conditions outlined in the legislation to access this support.  An employer needs to: 

  • assess whether the business turnover has been impacted sufficiently to meet the eligibility criteria  
  • decide whether it is or isn’t appropriate for their business to retain staff during this current crisis. 
  • assess which employees will be covered under this support package 
  • ensure they have correctly registered for the support 
  • Advise staff they will be paid under the JobKeeper payment 
  • ensure they pay staff wages of at least $1500 per fortnight (gross, before tax) regardless of their existing and ongoing work hours. 
  • Ensure they comply with all your employer obligations under the usual HR rules, the amended Fair Work Act and the new JobKeeper Payment legislation 

How do I register for the JobKeeper Payment? 

At this stage the registration process is a simple online form for employers to register their interest. 

https://www.ato.gov.au/Job-keeper-payment/ 

An employee does not need to register with the ATO for JobKeeper.   

As this legislation has been pushed through so quickly, the government is still in the process of implementing the appropriate systems to manage this payment to businesses.  Please register at the link above to ensure that you can access the support as soon as it becomes available. 

THE BUSINESS TURNOVER MUST BE AFFECTED 

My business hasn’t yet noticed an impact on turnover – will my business be eligible for this support? 

To be eligible: 

  • the business or not for profit organisation must have experienced a COVID-19 related turnover reduction of at least 30% since 1 March.   
  • for larger businesses (turnover of $1 billion or more) turnover needs to have reduced by 50% or more. 
  • for charities registered with the Australian Charities and Not-For-Profit Commission (ACNC), they will be eligible for the subsidy if they estimate their turnover has or will likely fall by 15% or more 

It may be that your business isn’t affected yet but that next month or the following month your business will notice the flow on effect of an economic slowdown and become eligible then.  Once you meet the eligibility criteria you can then enter the JobKeeper system.   

Having accurate and up-to-date financial information for your business will be instrumental in determining if and when you meet this criteria.  So it will be even more important to keep your business financial records up to date during this time.   

We emphasis it must be a COVID-19 related downturn. 

What period do I compare my current turnover against to assess whether there has been the necessary drop? 

The government expects that most businesses can demonstrate that their turnover has or will likely fall in the relevant month or quarter (depending on their Business Activity Statement reporting period) relative to their turnover in a corresponding period a year earlier (for instance March 2020 compared to March 2019). 

What if my turnover a year ago wasn’t representative of a “normal” period for my business? 

Where a business or not-for-profit was not in operation a year earlier, or where their turnover a year earlier was not representative of their usual or average turnover, (e.g. they were newly established or their turnover is typically highly variable or seasonal) the Tax Commissioner will have discretion to consider additional information can be provided to establish that they have been significantly affected by the impacts of COVID-19.  Therefore even if you don’t meet the strict criteria of comparing month to month or quarter to quarter, you may still be eligible if you can demonstrate that your normal turnover has, or is likely to, drop.     

ELIGIBILITY 

What are the basic criteria for eligibility? 

We refer you to our table of key information and also the Government JobKeeper Payment – Frequently Asked Questions Fact Sheet

What if I don’t currently have the cash to pay my staff? 

It is important to consider the cashflow impact to your business.  If you aren’t currently able to fund the staff wage payments, you will need to consider your options.  Are you able to restructure the business finances to fund these payments?  Can you borrow money on a short-term basis from your bank?  Banks have indicated that businesses may be able to use the upcoming JobKeeper payment as a basis to seek credit in order to pay their employees until the first payment is received from the government.  Consider all alternatives and don’t hesitate to reach out to our team to discuss your options. 

How will the ATO seek information regarding the staff I am paying the JobKeeper Payment to? 

At the end of each month businesses will report to the ATO the details of which eligible staff were paid the JobKeeper Payment.   

At this stage the ATO have indicated they will use the Single Touch Payroll system to provide initial data. 

What if I haven’t yet enacted my Single Touch Payroll (STP) system? 

We suggest that all businesses take steps now to get the ball rolling on their STP process.  Having this system operating efficiently will ensure there are no delays for your business in accessing this subsidy from the government. 

Please don’t hesitate to contact our team should you need support to get your STP up and running. 

We understand that if you do not report through Single Touch Payroll, you can still claim the JobKeeper Payment; however there will be a manual claim process. 

HR MATTERS 

What are the HR implications for the business regarding any changes to staff employment arrangements due to COVID-19? 

The JobKeeper legislation provides some guidelines around this.  The JobKeeper legislation has also pushed changes through to the Fair Work Act to accommodation some of the COVID-19 matters that will impact staff arrangements. 

As such please ensure you refer to the legislation or seek additional guidance regarding any changes for: 

  • hours and days worked 
  • type of work performed 
  • location of work 
  • use of leave entitlements 
  • ability for an employee to seek secondary employment. 

TRADING AS A SOLE TRADER OR THROUGH A PARTNERSHIP, TRUST OR COMPANY 

What if I trade as a sole trader or through a partnership, company or trust and don’t pay myself wages? 

In summary – Sole traders are eligible for the JobKeeper Payment for themselves. 

For a partnership – one partner can be nominated to receive a JobKeeper Payment along with any eligible employees. 

Where beneficiaries of a 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. 

A company can nominate only one director to receive the payment. 

Also, a company that pays shareholders that provide labour via dividends will be able to nominate one shareholder to receive the JobKeeper Payment. 

We suggest you read page 10 onwards of the Government JobKeeper Payment – Frequently Asked Questions Fact Sheet first. 

SUPPORT & FURTHER INFORMATION 

All this information is very overwhelming.  I am unsure if I am eligible and what to do if I am? 

We suggest you read in full this Q & A document and the Government JobKeeper Payment – Frequently Asked Questions Fact Sheet first.  We also refer you to our table of key information regarding the criteria for the JobKeeper Payment.  If you are still unsure, please don’t hesitate to contact our team for support.  We have been trawling over all the available information in detail and can help you apply the legislation to your business circumstances. 

I am concerned that I will miss out on the government support if I don’t do the right thing.  How can I be sure I am taking the right steps now? 

We are still to see the rules supporting this legislation which should come to hand over the coming weeks.   Unfortunately, much of the practical aspects are still being worked out by the ATO and the Treasurer and we do appreciate there is a lot of uncertainty still for businesses.    

What we do know – To be eligible to claim the JobKeeper Payment you are required to firstly pay staff a minimum of $1,500 per fortnight so it is important you understand the rules.  If you have staff that you don’t currently pay this amount to (eg. a part time staff member or someone that you have stood down) it is important that you are certain that you qualify for the subsidy before paying them this higher amount as you could end up out of pocket.   

Also there is a risk that if you claim the JobKeeper payment from the ATO without meeting the criteria (e.g. casual employee for less than 12 months, didn’t meet the decline in turnover test) you could have to pay back the JobKeeper payment to the ATO.  As such it’s very important to ensure you meet the criteria before taking action.   

Please note that this document contains general advice only and does not consider your individual circumstances.  As such you should consider it’s appropriateness and seek advice about your individual circumstances before acting on this information. 

It is important to note that we are not HR or Employment Law specialists.  There have been temporary changes made to the Fair Work Act as part of the introduction of JobKeeper that provides more flexibility for employers and employees to adjust working hours and or duties.  In order to be certain you have satisfied all the HR requirements surrounding any changes to employee working circumstances we suggest you seek the guidance of a specialist. 

Where do I find more information regarding this government support? 

At this stage the information available is somewhat limited, that is, it doesn’t answer all questions and there are still many gaps. 

Further information can be found here:  

https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions_0.pdf 

https://treasury.gov.au/sites/default/files/2020-04/Fact_sheet_Info_for_Employers_0.pdf 

The legislation can be reviewed here:  https://parlinfo.aph.gov.au/parlInfo/download/legislation/bills/r6535_first-reps/toc_pdf/20054b01.pdf;fileType=application%2Fpdf 

The explanatory memorandum supporting the legislation can be reviewed here: 

https://parlinfo.aph.gov.au/parlInfo/download/legislation/ems/r6535_ems_1daae531-9b3a-493f-8596-23432c143fb3/upload_pdf/735865.pdf;fileType=application%2Fpdf 

 

*Please note that this document contains general advice only and does not take into account your individual circumstances.  As such you should consider it’s appropriateness and seek advice about your individual circumstances before acting on this information.

 

 

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