Menu
WMC Accounting, Geelong, Colac, Bellarine Peninsula
You are here: Home > Resources > COVID-19

COVID-19

We acknowledge that the coronavirus pandemic is causing uncertainty across the country and we are working hard behind the scenes to stay up-to-date with government announcements and how this will impact our clients and society as a whole.  We will continue to publish newsletters with updated information and provide you with access to resources published by government departments.  We invite you to subscribe to our newsletter to keep updated with these events. 

The Second $66.1 bn Stimulus Package: What You Need To Know

31 March 2020
The Government yesterday released a second, far reaching $66.1 bn stimulus package that boosts income support payments, introduces targeted changes to the superannuation rules, provides cash flow support of up to $100,000 for small business employers, and relaxes corporate insolvency laws. 

The stimulus measures are not yet legislated. Parliament will reconvene on Monday 23 March.

The Prime Minister has warned that there are no "quick solutions" and that business should prepare for 6 months of disruption. 

In Summary
Business

  • Tax-free payments up to $100,000 for small business and not-for-profit employers. An increase in the previously announced initial tax-free payments for employers to a maximum of $50,000. In addition to this, a second round of payments will be made up to a maximum of $50,000, accessible from July 2020. 
  • Solvency safety net – temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000, and an increase in the time companies have to respond from 21 days to 6 months. Directors also are provided with temporary relief from personal liability for trading while insolvent for 6 months.
  • Access to working capital – Introduction of a Coronavirus SME guarantee scheme protecting financial institutions by guaranteeing 50% of new loans to SMEs.
  • Sole traders and self-employed eligible for Jobseeker payment – the eligibility criteria to access income support relaxed for the self-employed and sole traders.
  • Temporary relief from some Corporations Act requirements

Individuals

  • Early release of superannuation – individuals in financial distress able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax-free and will not affect Centrelink or Veterans' Affairs payments.
  • Temporary reduction in minimum superannuation draw down rates – superannuation minimum drawdown requirements for account based pensions and similar products reduced by 50% in 2019-20 and 2020-21.
  • Deeming rates reduced – from 1 May, superannuation deeming rates reduced further to a lower rate of 0.25% and upper rate of 2.25%.
  • Supplements increased, access extended and eased – for 6 months from 27 April 2020:
  • A temporary coronavirus supplement of $550 will be paid to existing income support recipients (people will receive their normal payment plus $550 each fortnight for 6 months).
  • A second one-off stimulus payment of $750 will be paid automatically from 13 June 2020 to certain income support recipients (in addition to the payment made from 31 March 2020).
  • Eligibility for access to income support eased to include sole traders and the self-employed, and to those caring for someone infected or in isolation.
  • Waiting periods and assets tests temporarily waived.  
  • Bankruptcy safety net – temporary 6 month increase to the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor from $5,000 to $20,000.

The Government has flagged that additional stimulus packages will be required. 

In detail

Support for business

Tax-free payments up to $100,000 for employers

  • From: 28 April 2020
  • Eligibility: Small and medium business entity employers and not-for-profit entities, with an aggregated annual turnover under $50 million.

The Government has increased the previously announced measures to provide cash flow support to business.

Now, eligible businesses with a turnover of less than $50 million will initially be able to access tax-free cash flow support, with the minimum amount being increased to $10,000 and the maximum amount increased to $50,000 (previously $2,000 to $25,000). However, additional support will be provided in the July – October 2020 period so that eligible entities will receive total minimum support of $20,000 and up to $100,000.

In order for a business to qualify for this support it must have been established prior to 12 March 2020. The rules are more flexible for charities because the Government recognises that new charities might be established in response to the pandemic.

The cash flow support measures will be provided in the form of a credit in the activity statement system. The support will be provided in two phases.

  • The first phase ensures that eligible employers receive a credit equal to 100% of the PAYG amounts withheld from salary and wages paid to employees during the relevant period, up to the maximum amount of $50,000.
  • The second phase ensures that eligible employers receive another series of credits, equal to the credits that were received under the first phase. For example, if a business received $40,000 of credits in the first phase it will receive a further $40,000 of credits in the second phase. These additional credits will be spread over two or four activity statement periods, depending on whether the employer lodges on a quarterly or monthly basis.

If a business pays salary and wages to employees but is not required to withhold any tax then a minimum payment of $10,000 will be made in the first phase and a further payment of $10,000 will be made in the second phase.

The credits are automatically calculated by the ATO and employers will need to lodge an activity statement to trigger the entitlement. If the credit puts the business in a refund position the excess amount will be refunded by the ATO within 14 days.

Businesses that lodge activity statements on a quarterly basis will be eligible to receive credits in the first phase for the quarters ending March 2020 and June 2020. Credits in the second phase will be available for the quarters ending June 2020 and September 2020. The minimum $10,000 payment will be applied to the first lodgement.

Business that lodge on a monthly basis will be eligible for the credits in the first phase for the March 2020, April 2020, May 2020 and June 2020 lodgements. Credits in the second phase will be available for the June 2020, July 2020, August 2020 and September lodgments. The minimum $10,000 payment will be applied to the first lodgement.

Eligibility for the measure will be based on prior year turnover. We will have to wait for the legislation for the finer details.

Not-for-profit employers, including charities, with an aggregated turnover under $50 million will also be able to access the cash flow support.

Solvency safety net

A safety net has been put in place to protect businesses in temporary financial distress as a result of the pandemic by lessening the threat of actions that could unnecessarily push them into insolvency and force the winding up of the business. These include:

  • A temporary 6 month increase to the threshold at which creditors can issue a statutory demand on a company from $2,000 to $20,000.
  • The time a company has to respond to statutory demands will increase from 21 days to 6 months.
  • For 6 months, directors will be provided with temporary relief from personal liability for trading while insolvent.
  • See also bankruptcy safety net below

It will be more important than ever for business to stay on top of their debtors.

Debts incurred will still be payable by the business. Only those debts incurred in the ordinary course of the business will be subject to the safety net measures.

Access to working capital for SMEs – supporting lenders

The Government has announced a Coronavirus SME guarantee scheme that will guarantee 50% of new loans to SMEs up to $20 billion. These loans are new short-term unsecured loans to SMEs.

SMEs with a turnover of up to $50 million will be eligible to receive these loans.

  • The Government will provide eligible lenders with a guarantee for loans with the following terms:
  • Maximum total size of loans of $250,000 per borrower.
  • The loans will be up to three years, with an initial six month repayment holiday.
  • The loans will be in the form of unsecured finance, meaning that borrowers will not have to provide an asset as security for the loan.

Loans will be subject to lenders' credit assessment processes with the expectation that lenders will look through the cycle to sensibly take into account the uncertainty of the current economic conditions.

This latest measure builds on the previous initiatives to ensure small business can access capital, including:

Sole traders and self-employed eligible for Jobseeker payment

The eligibility criteria to access income support payments will be relaxed to enable the self-employed and sole traders whose income has been reduced, to access support.

More:

Temporary relief from Corporations Act requirements

The Treasurer has been given a temporary instrument-making power to amend the Corporations Act to provide relief or modifications to specific compliance obligations.

ASIC has announced measures for those companies with a 31 December financial year that need to hold their AGMs by 31 May 2020, providing a two month no action period and enabling hybrid virtual AGMs.

Individuals

Early release of superannuation

From mid-April, individuals in financial distress will be able to access up to $10,000 of their superannuation in 2019-20, and a further $10,000 in 2020-21. The withdrawals will be tax free and will not affect Centrelink or Veterans' Affairs payments.

To be eligible to access your superannuation you need to meet the following requirements:

  • you are unemployed; or
  • you are eligible to receive a job seeker payment, youth allowance for jobseekers, parenting payment (which includes the single and partnered payments), special benefit or farm household allowance; or
  • on or after 1 January 2020:
    • you were made redundant; or
    • your working hours were reduced by 20% or more; or
    • if you are a sole trader - your business was suspended or there was a reduction in your turnover of 20% or more.

For those eligible to access their superannuation, you can apply directly to the ATO through the myGov website from mid-April.

More:

Temporary reduction in minimum superannuation draw down rates

Superannuation minimum drawdown requirements for account-based pensions and similar products will be reduced by 50% in 2019-20 and 2020-21.

Age

Default minimum drawdown rates (%)

Reduced rates by 50 per cent for the 2019-20 and 2020-21 income years (%)

Under 65

4

2

65-74

5

2.5

75-79

6

3

80-84

7

3.5

85-89

9

4.5

90-94

11

5.5

95 or more

14

7

 
The upper and lower social security deeming rates will be reduced further. As of 1 May 2020, the upper deeming rate will be 2.25% and the lower deeming rate 0.25%.

Time limited fortnightly $550 'coronavirus supplement'

For the next 6 months, the Government is introducing a new Coronavirus supplement to be paid at a rate of $550 per fortnight. This supplement will be paid to both existing and new recipients in the eligible payment categories.

The payment will be made to those receiving:

  • Jobseeker payment (and those transitioning to the jobseeker payment)
  • Youth allowance jobseeker
  • Parenting payment
  • Farm household allowance
  • Special benefits recipients

In addition, eligibility to income support payments will be expanded to:

  • Permanent employees who are stood down or lose their job
  • Casual workers
  • Sole traders
  • The self-employed
  • Contract workers who meet the income test

The Government notes that these criteria could include those required to care for someone affected by the Coronavirus.

Asset testing has also been reduced and will be waived for 6 months. Income testing will still apply.

The payment is not available if you have access to any employer entitlements such as annual or sick leave or income protection insurance.

More:

Second $750 payment to households

The Government is now providing two separate $750 payments to social security, veteran and other income support recipients and eligible concession card holders residing in Australia (see the full list here). The payment will be exempt from taxation and will not count as income for the purposes of Social Security, Farm Household Allowance and Veteran payments.

  • Payment 1 from 31 March 2020 (previously announced on 12 March): Available to people who are eligible payment recipients and concession card holders at any time between 12 March 2020 to 13 April 2020;
  • Payment 2 from 13 July 2020: Available to people who are eligible payment recipients and concession card holders on 10 July 2020.

The payments will be made automatically to those that meet the criteria.

More:

Bankruptcy safety net

A temporary 6 month increase to the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor will increase from $5,000 to $20,000. In addition, the time a debtor has to respond to a bankruptcy notice will be temporarily increased from 21 days to six months.

Where someone declares their intention to enter voluntary bankruptcy, the period of protection from unsecured creditors will be extended from 21 days to 6 months.

More:

More information:

We will continue to keep you informed as more information is released. We appreciate your patience and understand as we navigate through the measures of relief available. 

State Government Stimulus Packages

31 March 2020
Alongside the Australian Government's response to COVID-19, all states have outlined their own specific economic assistance packages. We encourage you to review potential opportunities for support. We have provided information regarding Victoria and included links to other states below. You still may be eligible in other states if your business extends operations outside Victoria.

Victorian Economic Survival Package
The Victorian Government has established an economic survival package to support Victorian businesses and workers through the devastating impacts of the COVID-19 pandemic. The $1.7 billion Economic Survival Package complements the work of the Federal Government. The package includes the following key programs:

Payroll Tax Refund
Businesses with annual taxable wages up to $3 million will have their payroll tax for the 2019-20 financial year waived. This will support 24,000 businesses and up to 400,000 workers. The State Revenue Office will directly contact eligible businesses to reimburse them for payroll tax already paid in the financial year. Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year. These businesses can also defer paying payroll tax for the first quarter of the 2020-21 financial year. More information about the administration of these relief measures will be sent directly to eligible businesses.

SRO Tax Relief for Eligible Businesses

Liquor licence fees waived
Renewable liquor licence fees for 2020 will be waived. Businesses that have already paid will be reimbursed. The State Revenue Office will administer the reimbursement, regardless of whether the licence fee was paid to it or the Victorian Commission for Gaming and Liquor Regulation.

SRO Tax Relief for Eligible Businesses

Business Support Fund
The $500 million Business Support Fund will support the hardest hit sectors, including hospitality, tourism, accommodation, arts and entertainment, and retail.  Funding of $10,000 per business is available and will be allocated through a grant process.

The Government will work with the Victorian Chamber, Australian Hotels Association and Australian Industry Group to deliver the Fund, which will help these businesses – which may not be eligible for payroll tax refunds due to their size – survive and keep people in work.

Victorian Business Support Fund

Fact Sheet - Economic Survival Package

Working for Victoria Fund
Under the $500 million Working for Victoria Fund, displaced workers will be eligible to apply for different types of work. This presents opportunities for paid work and an opportunity to contribute to Victoria's ability to manage this event and support the community.

Some displaced workers will have skills that can be readily transferred to new roles. The Government can also assist skills development or help people in obtaining immediate accreditation to commence work.

The Government will work across the public sector, local government, the not-for-profit sector and key private sector employers to facilitate job matching.

$50 million support package for Victorian workers

Land tax deferral
Land owners that have at least one non-residential property and total taxable landholdings below $1 million have the option of deferring their 2020 land tax payment until after 31 December 2020.

The State Revenue Office will contact all taxpayers who are eligible for this deferral.

SRO Tax Relief for Eligible Businesses

Fast tracking outstanding supplier invoices
The Government will pay all outstanding supplier invoices within five business days – releasing up to $750 million into the economy earlier. The private sector is urged to do the same where possible.

Rent relief for commercial tenants in government buildings
The Government will work directly with commercial tenants in government buildings who can apply for rent relief. Private landlords are also being encouraged to provide rent relief or holidays to help businesses.

Stimulus package resources for other states are outlined below:

$130 billion JobKeeper payment to keep Australians in a Job

1 April 2020
Detailed below is information and resources regarding the JobKeeper payment announcement by Scott Morrison last night.

The package has not been legislated and details are yet to be finalised by parliament. Therefore, you may wish to hold off from any employee action until more details are known.

Please note as new information comes to hand, we will continue to send information and newsletters.

 

Clients should register their interest direct with the ATO to receive updates from them.

Resources:

Based on limited information provided by the government to date, we have already identified the following questions and issues that you may have and we are waiting to seek clarification on these matters:

  • It is not apparent whether qualifying for one month of JobKeeper payments will automatically qualify employers for the full 6 months. If not, we will need further information on whether employers report their revenue each month.
  • What happens if you don't qualify for payment, based on revenue drops of 30% or more, until after April?  E.g.  If you have 30% reduction in revenue in May.  Can you get back pay for April and then May payment also? Does it automatically qualify you for June?
  • It appears self-employed individuals are eligible; however, will this extend to a partnership of individuals?
  • It appears owners of companies and trusts receiving only dividends or distributions (not wages) do not qualify, but may for other employees.  We await more information.
  • Since 1 March, if an employee has been stood down, it is unclear as to what superannuation will be paid on their JobKeeper payment.
  • Based on the following information contained in the fact sheet, "If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements."  It is unclear whether the employee could work reduced hours (number of days etc) to match the $1,500 payment per fortnight.
  • Receiving the $1,500 from the government may enable some employers to help fund paying out leave entitlements to staff, which they may not have been able to currently pay out of cashflow.
  • There is no clarification on whether an employee who is stood down must or can return to work to be eligible for the payment. Further to this, there is no clarification whether a reduced hours agreement also qualifies for the JobKeeper payment.
  • It is unclear what circumstances leave entitlements will accrue for recipients of the JobKeeper payment. Please seek advice from Fairwork or an employment lawyer in relation to this.

Awaiting JobKeeper legislation, Apprentice and Trainee support and next steps

2 April 2020
Our Accountants have been inundated with phone calls and email enquiries regarding the newly announced COVID-19 support packages. We are trying to get back to you as soon as possible and we sincerely appreciate your patience and understanding during these times.

We have included some information on the following topics as we believe these to be relevant to our clients and we will continue to provide further information as it comes to hand:

We hope this information is helpful and we wish you well during these difficult times.

JobKeeper Update
Scott Morrison has recalled Parliament to sit next Wednesday 8th April to introduce the draft legislation to Parliament. Once the draft legislation is prepared and introduced, we will have more detail regarding the proposed measures.  

As it currently stands, there has been no great changes to the information released by Treasury. They have updated their fact sheet with the major change being that the Commissioner of Taxation will be given discretion to determine eligibility and introduce other tests where businesses are unable to demonstrate impact through the turnover reduction test. The specific paragraph in the fact sheet is as follows:

To establish that a business has faced a 30% (or 50%) fall in their turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or three months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier. Where a business 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. because there was a large interim acquisition, they were newly established or their turnover is typically highly variable), the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been adversely affected by the impacts of the Coronavirus. The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances (e.g. eligibility may be established as soon as a business ceases or significantly curtails its operations). There will be some tolerance where employers, in good faith, estimate a greater than 30% (or 50%) fall in turnover but actually experience a slightly smaller fall.

What you can do now to prepare:

  1. Register your interest for the JobKeeper payment
  2. Review your payroll software and ensure it is single touch payroll ready and active
  3. Ensure your payroll is up-to-date.
  4. Update your accounting software and records to ensure year to date figures can be available and activity statements prepared.

Small Business Support Fund
Through the fund, small businesses are eligible for $10,000 grants if they:

  • employ staff
  • are highly impacted by COVID-19 business restrictions
  • have a turnover of more than $75,000
  • have payroll of less than $650,000

Supporting Apprentices and Trainees
In case you have missed this topic from previous fact sheets, we wanted to outline the Government supporting businesses to retain their apprentices and trainees.

Eligible employers can apply for a wage subsidy of 50 per cent of the apprentice's or trainee's wage paid during the 9 months from 1 January 2020 to 30 September 2020. Where a small business is not able to retain an apprentice, the subsidy will be available to a new employer. Employers will be reimbursed up to a maximum of $21,000 per eligible apprentice or trainee ($7,000 per quarter).


Eligibility criteria:

  • The subsidy will be available to small businesses employing fewer than 20 employees who retain an apprentice or trainee. 
  • Employers of any size and Group Training Organisations that re-engage an eligible out-of-trade apprentice or trainee will be eligible for the subsidy. The apprentice or trainee must have been in training with a small business as at 1 March 2020.
  • Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network (AASN) provider
  • This measure will support up to 70,000 small businesses, employing around 117,000 apprentices.

Employers can register for the subsidy from early April. We recommend you contact the Apprentice Network whom you engaged to sign up existing apprentices or trainees. You can search contact details from Australian Apprenticeship Support Network.

There is no clarification as to whether employers can claim apprentice/trainee support as well as the JobKeeper payment for the same employee. We think it makes sense that employers will not be able to claim both payments however, this has not been clarified.

For employers wanting to re-engage apprentices and trainees, go to the National Employee Apprentice Network to access the Apprentice and Trainee Re-engagement Register.

This register has been established for:

  • apprentices and trainees who have lost their jobs with small business employers
  • employers from any size business who have a vacancy for an apprentice or trainee

Who can register here:

  • Apprentices and trainees who were in a training contract at 1 March 2020 and who have since lost their jobs
  • Employers, including Group Training Organisations, who wish to register their details and post a vacancy for an apprentice or trainee

What you can do to prepare:

  1. If you employ apprentices or trainees, review our eligibility criteria and contact your Australian Apprenticeship Support Network to find out how you apply. 
  2. If you are eligible, apply for the Victorian Business Support Fund. The grant is available to those who are "subject to closure or highly impacted by the shutdown restrictions announced by the Victorian Government as a result of the coronavirus (COVID-19)."

Timing of assistance
The following table sets out the effective date of each of the stimulus measures.

Date

Support

Immediately

Temporarily reduced minimum drawdown rates for superannuation

Immediately, with deductions to be included in 2019–20 tax returns

Increased instant asset write off

Immediately, with deductions to be included in 2019–20 and 2020–21 tax returns

Backing business investment - accelerated depreciation

As soon as practicable

Support for Coronavirus-affected regions and communities

From 30 March 2020

Register interest for JobKeeper Payment

From 31 March 2020

First round of $750 payments to support households

Applications from early-April 2020

Assistance for existing apprentices and trainees

Applications from mid-April 2020

Temporary early release of superannuation

From 27 April 2020

Income support and Coronavirus supplement

From 28 April 20205

First phase of Boosting Cash Flow for Employers

From 1 May 2020

Increased transfer payments from reduced deeming rates

First week of May

Initial JobKeeper Payments received by employers

From 13 July 2020

Second round of $750 payments to support households

From 21 July 2020

Second phase of Boosting Cash Flow for Employers

Source: Adapted from Treasury fact sheet Economic Response to the Coronavirus

JobKeeper Update

6 April 2020
To keep you in the loop, we have reviewed multiple sources over the weekend and we provide you with the following update:

The government updated their Job Keeper fact sheets on Sunday 5 April 2020. 

Fact Sheet: JobKeeper Payment - Information for employers 

Fact Sheet: JobKeeper Payment - Supporting businesses to retain jobs

BUSINESSES WITH EMPLOYEES

At this stage, we remain limited to the information contained in these fact sheets. We are still waiting for legislation to be finalised to definitively outline how JobKeeper payments will impact businesses and employees.

The updated fact sheet outlines the eligible employee criteria in more detail:

  • 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 and systemic basis for longer than 12 months as at 1 March 2020).
  • Employees must have been 16 years of age at 1 March 2020.
  • Are an Australian citizen, the holder of a permanent visa, or a Special Category Visa Holder at 1 March 2020.
  • Were a resident for Australia tax purposes on 1 March 2020.
  • Are not in receipt of a JobKeeper Payment from another employer.
  • Employees on parental leave from their employer will be eligible.
  • Employees receiving Parental Leave Pay from Services Australia are not eligible for the JobKeeper Payment.
  • Employees receiving workers compensation will be eligible for the JobKeeper Payment if they are working, for example on reduced hours, but will generally not be eligible if they are not working.

BUSINESSES WITHOUT EMPLOYEES

Businesses without employees, such as self-employed, can register their interest in applying for JobKeeper Payment.

It is not clear at this stage whether or not self-employed people who operate a business using another structure (e.g. partnership, company or trust) are included in the JobKeeper payment.

Interestingly, the Business.gov.au website has outlined support available for sole traders and employers which appears to show intent to assist self-employed owner-operators by extending JobKeeper eligibility to companies, partnerships and trusts. The website states as follows:

The intent of the JobKeeper Payment is to enable any eligible self-employed person get a wage subsidy regardless of what business structure they use, where:

  • the partners in a partnership only receive a share of profits – one partner can be nominated to receive it 
  • directors of a company only receive dividends – one direct can be nominated to receive it 
  • beneficiaries of a trust only receive distributions – one individual beneficiary (i.e. not a corporate beneficiary) can be nominated to receive it

At this stage, we recommend that you register your interest regardless of your business structure as we await clarity regarding eligibility. We believe that the current registration is not a formal application and only shows interest in receiving further information about the payment.

Please note, we understand that people may have questions regarding their eligibility. Unfortunately, we have no more information or clarity beyond recent fact sheets.

We will continue to monitor updates and keep you informed.

 

JobKeeper Frequently Asked Questions 

7 April 2020
Treasury has prepared and released a JobKeeper Payment - Frequently Asked Questions fact sheet. The document covers commonly asked questions and also provides further detail on the application of the JobKeeper payment legislation.

The fact sheet contains further commentary on the application of the JobKeeper Payment to businesses with or without employees that are also operating through legal structures such as partnerships, companies and trusts.

We strongly encourage everyone to read this document in light of the recent updates.

We understand that the fact sheet may raise further questions and also become more relevant to businesses without employees. Given the level of detail we now have, we anticipate that more updates from the government will answer some of these questions.

We will continue to provide more updates over the coming days, we expect, once parliament meets tomorrow to review the legislation. We appreciate your patience until we get further information.

 

JobKeeper payment & JobKeeper changes to the Fair Work Act

15 April 2020
The Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 was legislated on 9 April 2020. The Explanatory Statement issued by authority of the Treasurer expands on information contained in the rules to assist with further understanding of the measures contained in legislation.

Entitlement to a JobKeeper payment is assessed in relation to a fortnightly period known as a JobKeeper fortnight. Each of the following is a JobKeeper fortnight:

  • the fortnight beginning on 30 March 2020; and
  • each subsequent fortnight, ending with the fortnight ending on 27 September 2020.

This means that the JobKeeper scheme commences on 30 March 2020 and ends on 27 September 2020 – a period of 26 weeks (provided that an employer meets eligibility criteria). This reflects that the JobKeeper payment is a temporary measure for a limited period only to support entities that have been significantly affected by the economic impacts of the Coronavirus. 

JobKeeper Eligibility for Employers
Employers will be eligible for the JobKeeper payment if all of the following apply:

  • 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)
    • 50% fall in turnover (for an aggregated turnover of more than $1 billion), or
    • 15% fall in turnover (for ACNC-registered charities other than universities and schools).
  • Your business is not in one of the ineligible categories.

Decline in Turnover test
There are specific rules that have been introduced to test an entity's decline in turnover. The legislation adopts and amends the terms 'current GST turnover' and 'projected GST turnover' from the GST Act. Projected GST turnover includes the value of all the supplies that an entity has made or is likely to make in the period.

There are now more details available about this test and how it is to be applied. You should review this information and apply it to your current business circumstances. Please refer the decline in turnover test as outlined in the Explanatory Statement.

The Commissioner of Taxation also has the discretion to set out alternative tests that can establish your eligibility when turnover periods are not appropriately comparable (for example, if your business has been in operation less than a year).

Important Deadlines
The Australian Taxation Office has outlined how to enrol and apply for the JobKeeper payment.

Steps you need to take:

  1. If you haven't already done so, now is the time to register your interest and subscribe for JobKeeper payment updates.
  2. If you wish to receive the first or second JobKeeper payment (relating to the JobKeeper fortnights commencing 30 March 2020 and 13 April 2020 respectively), the employer has until 26 April 2020 (possibly extended to 30 April 2020) to provide the Commissioner with its election to participate.
  3. Check you and your employees meet the eligibility requirements.
    • You need to identify which employees you intend to claim the JobKeeper payment for and tell them you intend to claim the JobKeeper payment for them.
    • You need to provide these employees with the JobKeeper employee nomination notice and ask them to return it to you by the end of April if you want to claim JobKeeper payment for April.
    • If your employees have multiple employers, they can usually choose which employer they want to nominate through. However, if your employees are long-term casuals and have other permanent employment, they cannot nominate you. They cannot receive the JobKeeper payment from more than one employer.
    • If an employee is currently receiving an income support payment, they must notify Services Australia of their new income to avoid incurring a debt that they will have to repay.
  4. Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight.
  5. From 20 April 2020 and before the end of April, enrol for the JobKeeper payment using the Business Portal with your valid MyGovID.

The Australian Taxation Office has also outlined the steps you needs to take if you wish to apply for JobKeeper payments from 4 May 2020 onwards.

Information you need to have available:

  • Payroll information for employees including including remuneration and JobKeeper allowances paid for each fortnight.
  • Completed JobKeeper employee nomination notice forms.
  • Each month, you will need to re-confirm reported eligible employees and if there are changes or employees leave your employment, notify the ATO through your monthly JobKeeper Declaration report. Details regarding the JobKeeper Declaration report are yet to be clarified.
  • Provide information as to your current and projected turnover each month.

As an additional resources, the Australian Taxation Office has consolidated JobKeeper information in an easy printable format with links to various government pages.

If you require assistance with JobKeeper applications, contact us to provide a quote for JobKeeper services tailored to your individual business requirements.

JobKeeper eligibility for non-employee business participants
Sole traders, partners in partnerships, beneficiaries in trusts, shareholders of companies and directors of companies can participate in the JobKeeper scheme – but only one per entity.

This applies whether or not the business has other employees.

To be eligible for this:

  • On 1 March 2020, the entity carried on a business in Australia;
  • The entity satisfies the decline in turnover test at or before the time. Please refer the decline in turnover test as outlined in the Explanatory Statement.
  • The entity must have held an ABN on 12 March 2020 or a later time allowed by the Commissioner; and
  • The entity included an amount in its assessable income for the 2018-19 income year and the Commissioner had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) of this amount OR the entity made a taxable supply in a tax period that applied to it that started on or after 1 July 2018 and ended before 12 March 2020 and the Commissioner had notice on or before 12 March 2020 (or a later time allowed by the Commissioner) that the entity had made the taxable supply.
  • For the taxable supply condition, it is assumed that the entity is registered for GST and that all supplies were taxable supplies.

The ATO has yet to release the application for non-employee business participants. We expect this to be available from 20 April 2020.

JobKeeper changes to the Fair Work Act
On 9 April 2020, the Fair Work Act was amended to support the implementation and operation of the JobKeeper scheme in Australian workplaces. These changes are temporary and will end on 28 September 2020.

The new provisions enable employers who qualify for the JobKeeper scheme, and who are entitled to JobKeeper payments for their employees, to give directions called 'JobKeeper enabling directions'. In certain circumstances, this means that employers can temporarily:

We recommend that you read the JobKeeper changes to the Fair Work Act website.

Unpaid Pandemic Leave in Awards
On 8 April 2020, the Fair Work Commission (the Commission) made determinations varying 99 awards. The determinations inserted a temporary new schedule into these awards. The schedule provides employees with:

  • 2 weeks of unpaid pandemic leave
  • the ability to take twice as much annual leave at half their normal pay if their employer agrees.

Many awards have been updated. Find your award to access updated temporary clauses contained in your relevant award.

More information:

If you have any queries regarding changes to the Fair Work Act and how to enact any of the  provisions, we strongly advise you to see guidance from FairWork by calling their coronavirus hotline on 13 13 94 or make an enquiry via your online account.

You can also apply for a voucher to access human resource advice via the City of Greater Geelong Business Support. The voucher can be used for a first hour free to consultation with an eligible provider on matters such as workplace employment law, workforce planning or mental health and wellbeing in the workforce.

Please call our office to discuss any assistance you may need regarding JobKeeper services.

It is time to get ready for JobKeeper payment

19 April 2020
In order to assist with the process of enrolling for the JobKeeper Program and applicable payments, we provide the following. Much of this has already been provided previously, but, we thought it is relevant to present again.

Process for determining eligibility:

  • Register your interest and subscribe for JobKeeper payment updates (this is only of benefit for communication from the ATO and not the actual application).
  • Check you and your employees meet the eligibility requirements.
  • Check here if a non-employee individual is an eligible business participant and able to receive JobKeeper.
  • Determine your eligibity of meeting the turnover test.
    • Basic Test: To assist with this, you would need to extract the monthly turnover from 1 March 2019 to 30 September 2019 from your accounting records or bookkeeping program.
    • Alternative Test

If Eligible (You or a registered tax professional can enrol for the JobKeeper payment):

  • If applicable, notify your eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren't claiming JobKeeper payment through another employer or have nominated through another business.
  • Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file.
  • From 20 April 2020, you can enrol with the ATO for the JobKeeper payment using the Business Portal and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.
  • In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader (there will no doubt be more information needing to be provided, but, it is unclear at this stage).
  • Apply for myGovID and Business Portal Access
  • If directors of Trustee Companies can't link their trust to their myGovID, please call the ATO on 1300 287 539 Opt 2.  You will need your personal TFN and the ABN/TFN of the Trust.  The ATO will advise and assist accordingly.
  • Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).
  • If eligible for payments for the April fortnights, and also wanting to claim, then you must ensure that you have made the appropriate minimum payments of $1500/fortnight to eligible employees by the end of April.

Please call our office to discuss any assistance you may need regarding JobKeeper services. We await further detail regarding the services packages we will provide. 

JobKeeper Update

29 April 2020
ATO Extends enrolment date and top up payment date
The ATO has extended the enrolment date for any businesses eligible to claim payments for the first two JobKeeper fortnights. Businesses now have until 31 May 2020 to assess their turnover and eligibility and then enrol for JobKeeper payments.

For eligible businesses that have met the eligibility criteria but have not yet paid eligible employees the minimum of $1,500 per JobKeeper fortnight, they now have until 8 May 2020 to do so. Payments made after 8 May 2020 will not qualify as JobKeeper payments and cannot be claimed from the ATO.

The first two JobKeeper fortnights are:

  1. 30 March 2020 to 12 April 2020
  2. 13 April 2020 to 26 April 2020

Ongoing JobKeeper Obligations

Minimum payment requirements
For those who have enrolled and plan to claim the ongoing JobKeeper payments, you need to ensure you meet the minimum payment requirements in each and every fortnight before the end of each applicable fortnight. There will not be the ability to complete back payments or top up payments for future JobKeeper fortnights after the end of the fortnight.

The first two fortnights are the only two we believe the ATO will give an extension of time for the payment to be made to the employee.

The JobKeeper fortnight dates are in the following table:

Month

Dates

Start Allowance

Finish Allowance

April

30/03/2020 - 12/04/2020

JOBKEEPER-START-FN01

JOBKEEPER-FINISH-FN01

 

13/04/2020 - 26/04/2020

JOBKEEPER-START-FN02

JOBKEEPER-FINISH-FN02

May

27/04/2020 - 10/05/2020

JOBKEEPER-START-FN03

JOBKEEPER-FINISH-FN03

 

11/05/2020 - 24/05/2020

JOBKEEPER-START-FN04

JOBKEEPER-FINISH-FN04

June

25/05/2020 - 07/06/2020

JOBKEEPER-START-FN05

JOBKEEPER-FINISH-FN05

 

08/06/2020 - 21/06/2020

JOBKEEPER-START-FN06

JOBKEEPER-FINISH-FN06

July

22/06/2020 - 05/07/2020

JOBKEEPER-START-FN07

JOBKEEPER-FINISH-FN07

 

06/07/2020 - 19/07/2020

JOBKEEPER-START-FN08

JOBKEEPER-FINISH-FN08

August

20/07/2020 - 02/08/2020

JOBKEEPER-START-FN09

JOBKEEPER-FINISH-FN09

 

03/08/2020 - 16/08/2020

JOBKEEPER-START-FN10

JOBKEEPER-FINISH-FN10

 

17/08/2020 - 30/08/2020

JOBKEEPER-START-FN11

JOBKEEPER-FINISH-FN11

September

31/08/2020 - 13/09/2020

JOBKEEPER-START-FN12

JOBKEEPER-FINISH-FN12

 

14/09/2020 - 27/09/2020

JOBKEEPER-START-FN13

JOBKEEPER-FINISH-FN13

 

Nomination Forms
You must ensure your employees have completed and signed the JobKeeper nomination forms. These forms are kept on file and do not need to be sent to the ATO.

A separate JobKeeper nomination notice for eligible business participants should be signed and kept on file for eligible business participants. There is no need to forward these to the ATO.

Monthly declaration for JobKeeper payments
You must also complete a business monthly declaration for each month in which you make a claim for JobKeeper payments. We expect that the ATO will notify enrolled businesses via either email or text to alert you when these declarations are due. The first monthly declaration one is expected to be available from 4 May 2020.

Payroll Processing
The below links will assist you in processing JobKeeper in your relevant software:

  • Xero
  • Quickbooks
  • MYOB AccountRight
  • Reckon – Click and scroll to the end for information on Reckon One, Reckon Accounts and Accounts Hosted, Reckon Payroll Premier and Reckon STP Mobile

JobKeeper Eligibility

Turnover Test
The ATO has further clarified some of the questions we have had from clients in regards to the application of the turnover test.

As of 29 April 2020 the ATO has changed and updated its initial guidance on the calculation method that businesses should use when assessing their turnover.

Cash or accruals basis
The turnover calculation requires you to include sales that you have made, or are likely to make, in the relevant month or quarter.

The calculations are based on the time you make the sales.

There are different ways of calculating turnover that may be reasonable in your circumstances.

As a practical matter, we expect that you will use the GST accounting method that you normally use. In other words, you may use a cash or accruals approach to determining the value of your sales in the relevant month or quarter. If you do this, typically, turnover for the relevant period will equal your GST exclusive sales less your input taxed supplies.

If you use GST calculations to determine turnover, don't forget to include GST-free sales.

If you normally account for GST on an accruals basis, but seek to calculate on a cash basis (or vice versa), we may seek to understand your circumstances to ensure that the calculation achieves an appropriate reflection of your turnover.

If you aren't registered for GST, we would expect you to use the same accounting method you use for income tax purposes.

Importantly, whichever basis you use must be used consistently in comparing the month or quarter in 2020 with the comparison month or quarter in 2019.

Alternative decline in turnover test
For businesses that do not have an appropriate comparative period from the prior year due to a range of different circumstances, the alternative test has now been released by the ATO. You may prefer to watch a presentation or access the legislative instrument and explanatory statement on the alternative decline in turnover test rules to assist in understanding how this may apply to your business.

We are still awaiting further guidance on the alternative tests for service entities that have employees employed through a special purpose entity rather than the operating entity.  The Treasurer's JobKeeper update states that this alternate test will apply where an entity provides the services of its employees to one or more related entities, where those related entities carry on a business deriving revenue from unrelated third parties. The alternate test will be by reference to the combined GST turnovers of the related entities using the services of the employer entity. 

Other Eligibility Changes
The Treasurer Josh Frydenberg announced on 24 April that the government was clarifying the JobKeeper rules and their operation in some circumstances. The Treasurer's JobKeeper update can be viewed here. The main points raised in this update were related to: 

  • Employees employed through a special purpose entity, rather than an operating entity.
  • Full time students aged 16 and 17 years old who are financially independent are only eligible for JobKeeper. Any employees aged 16 and 17 who are financially dependent on their families will not qualify for payments from the commencement of the third fortnight.
  • The 'One in, all in' principle which requires employers to include all eligible employees in the scheme. This is to include employees who are currently working as well as stood down employees.
  • Charities and the treatment of government revenue
  • Religious Practitioners
  • International Aid Organisations
  • Universities

For more information on the above, please refer to the Treasurer's JobKeeper update.

ATO JobKeeper resources
Review the ATO Top calls for the most commonly asked questions or reach out to the ATO Community and ask a question.

Commercial tenancies relief scheme
You can now access information on the commercial tenancies relief scheme for Victorian businesses.

For commercial tenants and landlords, the scheme will provide the following support:

  • a six-month moratorium on commercial tenancy evictions from 29 March 2020 for the non-payment of rent for small to medium enterprises with an annual turnover under $50 million that have experienced a minimum 30 per cent reduction in turnover due to coronavirus (COVID-19)
  • freeze on rent increases during the moratorium for commercial tenants
  • a rental payment waiver or deferral proportionate to commercial tenants' income reduction due to coronavirus (COVID-19), to be negotiated between tenant and landlord
  • a mediation service for commercial tenants and landlords to support fair tenancy negotiations.

  

Business Support Fund deadline
A reminder for Victorian clients, you only have until 1 June 2020 to apply for the Business Support Fund grants should your business meet the eligibility criteria and fall in one of the relevant industry's mentioned.

 

Victorian Chamber support for Victorian businesses
The Victorian Chamber will waive membership fees for any new entry level membership (up to the value of $700). The Victorian Chamber offers employment resources for businesses as well and training and consulting. Go to Victorian Chamber to find out about free 12 month membership to networker or essentials or call the Chamber on 03 8662 5333.

If you have any further questions, please email your direct contact who will then get in touch to discuss your specific circumstances. 



Regional Tourism Accommodation Support Program
12 August 2020

Business Victoria is providing support to accommodation businesses in regional Victoria impacted by cancellations resulting from the return of stage 3 stay at home restrictions in metropolitan Melbourne and Mitchell Shire.

Accommodation businesses in regional Victoria impacted by these cancellations will be able to apply for direct financial support through the Regional Tourism Accommodation Support Program.

Applications will close in 7 days.

Business Victoria Regional Tourism Accommodation Support Program

Business Victoria Fact Sheet on Eligibility Criteria

Due to the heavy work commitments of tax season and COVID-19, we ask that you review the eligibility criteria in the links provided prior to contacting the office if you have queries.

What support is available?

Accommodation providers across regional Victoria with an Australian Business Number (ABN) will be able to make a claim for a payment of up to $225 per night up to a maximum of $1125 per bookable accommodation offering for the period of the Stage 3 'Stay at Home' restriction period, provided they have refunded in full the booking to a person/s who can no longer travel as a result of restrictions in metropolitan Melbourne and Mitchell Shire, or from state border restrictions.

What type of business can apply?

The program is available to accommodation providers in the eleven Victorian Regional Tourism Regions (48 regional and rural councils plus a number of interface councils in the Yarra Valley and Mornington Peninsula; Victoria's six ski resorts; Gabo, French, Lady Julia Percy Islands).

The accommodation provider must be registered with an ABN prior to 30 June 2020 to make a claim.

Changes to the current JobKeeper Scheme
12 August 2020

We provide information for the recently announced changes to the eligibility criteria of employees for the current JobKeeper scheme. These could affect payments and eligibility of existing staff that may have previously not qualified.

Eligible employees
The Government has announced that employee eligibility tests will change from 3 August 2020 onwards.

These proposed changes mean that employees who were previously ineligible for JobKeeper because they were not employed by the entity on 1 March 2020 may now be able to receive JobKeeper payments if they were employed by the entity on 1 July 2020 and can fulfil all of the other eligibility requirements. 

Under the one-in-all-in requirements of JobKeeper, this may mean new eligible staff require payment of the minimum $1,500 per fortnight by the end of Sunday 16 August 2020.

This will be particularly relevant for:

  • Part time or full time employees that commenced after 1 March 2020 to 1 July 2020.
  • Casual employees who previously didn't qualify for 12 months of employment by 1 March, but will qualify by 1 July 2020.

For eligibility, provided on 1 July 2020 (previously 1 March 2020), the employee:

  • Was aged 16 years and over; and
  • If the individual was aged 16 or 17, was either financially independent or was not undertaking full-time study;
  • Was an employee other than a casual, or was a long-term casual*; andWas an Australian resident (under the meaning of the Social Security Act 1991), or a resident for tax purposes and held a Subclass 444 (Special category) visa**.
  • And, at any point during the JobKeeper fortnight:
    • Was an employee of the employer (including employees that have been stood down or rehired); and
    • Was not an excluded employee:
      • An employee receiving parental leave pay or dad and partner pay; or
      • An employee receiving workers compensation payments in relation to total incapacity.
    • And, has provided the JobKeeper Payment Employee Nomination to the employer:
      • Agreeing to be nominated by the employer as an eligible employee under the JobKeeper scheme; and
      • Confirming that they have not agreed to be nominated by another employer; and
      • If they are a long-term casual, they do not have permanent employment with another employer.

 *A 'long term casual employee' is a person who has been employed by the business on a regular and systematic basis during the period of 12 months that ended on the applicable testing date (previously 1 March 2020, but changing to 1 July 2020). These are likely to be employees with a recurring work schedule or a reasonable expectation of ongoing work.

The proposed changes to the scheme will be brought into legal effect once the Treasurer registers a Legislative Instrument to amend and/or supplement the Legislative Instrument titled the  Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (the Rules).


Business Support Fund – Expansion
In addition to the original "Business Support Fund", businesses are eligible to apply for the new "Business Support Fund – Expansion" program. This is open for registered JobKeeper employers.

Applications are open until 14 September 2020.

This expansion is due to the Stage 4 restrictions in metropolitan Melbourne and Stage 3 restrictions for Regional Victoria and Mitchell Shire.

What support is available?

The following one-off grants will be available to eligible businesses under the Business Support Fund – Expansion program:

  • $5,000 for employing businesses in regional LGAs except Mitchell Shire
  • $10,000 for employing businesses in metropolitan Melbourne and Mitchell Shire.

What type of business can apply for this grant?

Businesses can apply where they meet all the criteria listed below. They must:

  • operate a business located within Victoria; and
  • be a participant in the Commonwealth Government's JobKeeper Payment scheme; and
  • employ people; and
  • be registered with WorkSafe on 30 June 2020; and
  • have an annual payroll of less than $3 million in 2019-20 on an ungrouped basis; and
  • be registered for Goods and Services Tax (GST) as at 30 June 2020; and
  • hold an Australian Business Number (ABN) and have held that ABN at 30 June 2020; and
  • be registered with the responsible Federal or State regulator.

Business owners that do not employ people (non-employing businesses) are not eligible for funding through this program. Employing businesses must provide their WorkCover Employer Number in the application form for verification.

Business Victoria Business Support Fund - Expansion

Business Victoria Business Support Fund - Guidelines

Night-time Economy Business Support Initiative

Victorian pubs, clubs and restaurants support
Business Victoria has announced a $40 million package of support for pubs, clubs and restaurants in order to provide rent relief to venues that are not covered by the Commercial tenancy relief scheme.

This initiative provides eligible businesses with:

  • Reimbursement of up to $20,000 per business group for expenses incurred in obtaining specialist business and tenancy advice since 29 March 2020
  • Free mediation services to help tenants and landlords reach a fair and proportionate commercial outcome on rental payments
  • Relief for commercial rent hardship of up to $150,000 per business group where it can be shown that the business has sought to negotiate in good faith with the landlord with no result.

For eligibility requirement, please visit:

Business Victoria Night-time Economy Business Support Initiative

Business Victoria Night-time Economy Business Support Initiative FAQS

 

JobKeeper 1:0 Update, Workplace COVID-19 Notifications & Fairwork  
20 August 2020

JobKeeper 1.0: Extended deadline for top-up payments (for employers only)
The ATO has announced that the deadline for making payments for new eligible employees for JobKeeper fortnights starting on 3 August 2020 and 17 August 2020 has been extended to 31 August 2020 (ie, to meet the condition for employers to pay at least $1,500 to eligible employees in each JobKeeper fortnight).

This is in relation to the employee eligibility date changing from 1 March 2020 to 1 July 2020.

In practical terms, this means:

  • If someone commenced employment with an entity after 1 March 2020 but by 1 July 2020 and they were an employee of the entity on that date then they can potentially be eligible for JobKeeper from 3 August 2020 onwards, assuming all other basic conditions are met.
  • Casuals who hadn't been employed for at least 12 months leading up to 1 March 2020 can potentially be eligible for JobKeeper if they have been employed on a regular and systematic basis for at least 12 months leading up to 1 July 2020 (assuming all other basic conditions are met).
  • Individuals who failed the age-related conditions or residency conditions at 1 March 2020 can potentially be eligible employees if they met those conditions on 1 July 2020.

Employers need to ensure that they identify of all additional employees who could be eligible for JobKeeper to ensure that they comply with the "one in, all in" principle and that they meet the nomination requirements.

Details regarding JobKeeper 2.0 will follow on Monday 24 August 2020. 

Employees who have moved a new employer
The other key change to the rules is that someone who was previously nominated for JobKeeper with an entity as an eligible employee or eligible business participant can potentially be nominated for JobKeeper with a different entity if certain conditions are met. The individual must have ceased to be employed or actively engaged in the business (as a business participant) of the original entity after 1 March 2020 but before 1 July 2020. They must also meet the conditions to be treated as an eligible employee of the new employer at 1 July 2020.

If you have previously agreed to be nominated as an eligible employee of another employer or as an eligible business participant, you can only agree to be nominated as an eligible employee for a new employer for JobKeeper fortnights starting on or after 3 August 2020 if you meet all of the following:

  • between 1 March 2020 and 1 July 2020, you stopped being an employee of your previous employer or stopped being actively engaged as an eligible business participant
  • at the time you agree to be nominated by your new employer, you had not been rehired by your previous employer or had not restarted being actively engaged as an eligible business participant, and
  • you meet the other requirements to be an eligible employee for your new employer for JobKeeper fortnights starting on or after 3 August 2020 (including the 1 July test).

New WorkSafe Regulations – Reporting COVID-19 cases in the workplace
On 28 July 2020, temporary regulations were approved under the Occupational Health and Safety Act 2004 (OHS Act) that specify when employers and self-employed persons must notify WorkSafe of a confirmed diagnosis of coronavirus (COVID-19) in the workplace.

Failure to notify WorkSafe can result in a penalty.

Further details can be found at WorkSafe Victoria - Coronavirus (COVID-19)

Changes to the Fair Work Act
The Government has amended the Fair Work Act to enable employers who are entitled to receive the JobKeeper payment to temporarily vary working arrangements for eligible employees in order to keep people employed. Further details can be found in the Treasury Fact Sheet.

JobKeeper 2.0  
24 August 2020

On 21 July 2020, the Government announced that due to the ongoing COVID-19 crisis, the JobKeeper Payment scheme will be extended by six months from 28 September 2020 until 28 March 2021.

From 28 September 2020:

  • a two-tier payment rate will apply based on the worker's average weekly work hours during a reference period;
  • the current $1,500 per fortnight payment rate will be reduced on 28 September 2020 and reduced further on 4 January 2021;
  • the decline in turnover will be re-tested on a quarterly basis; and
  • the decline in turnover test will be based on actual GST turnover.

On 7 August 2020, the Treasurer announced further changes to increase access to the scheme during the proposed extension period (i.e. 28 September 2020 to 28 March 2021), driven by the ongoing crisis and the implementation of Stage 4 business restrictions in Victoria.

Under these revisions, from 28 September 2020, entities will only have to meet the quarterly decline in turnover test for (broadly) the previous quarter instead of multiple quarters as was originally proposed.

Eligibility
To receive JobKeeper from 28 September 2020, employers will need to reassess their eligibility with reference to actual GST turnover for the September 2020 quarter (for JobKeeper payments between 28 September to 3 January 2021), and again for December 2020 quarter (for payments between 4 January 2021 to 28 March 2021).

Eligible employers
The broad eligibility tests to access JobKeeper remain the same with an extended decline in turnover test.

  • On 1 March 2020, carried on a business in Australia or was a non-profit body pursuing its objectives principally in Australia; and
    • before the end of the JobKeeper fortnight, it met the decline in turnover test*:
      • >15% for an ACNC-registered charity (excluding universities, or schools within the meaning of the GST Act – these entities need to meet the basic turnover test)
      • >50% for large businesses:
        • aggregated turnover for the test period is likely to be $1 billion or more, or aggregated turnover for the previous year to the test period was $1 billion or more (a small business that forms part of a group that is a large business must have a >50% decline in turnover to satisfy the test).
      • >30% for all other qualifying entities.
    • And, was not:
      • on 1 March 2020, subject to Major Bank Levy for any quarter ending before this date, a member of a consolidated group and another member of the group had been subject to the levy; or
      • a government body of a particular kind, or a wholly-owned entity of such a body; or
      • at any time in the fortnight, a provisional liquidator or liquidator has been appointed to the business or a trustee in bankruptcy had been appointed to the individual's property.

 *1 March 2020 is an absolute date. An employer that had ceased trading, commenced after 1 March 2020, or was not pursuing its objectives in Australia at that date, is not eligible.

The proposed changes to the scheme will be brought into legal effect once the Treasurer registers a Legislative Instrument to amend and/or supplement the Legislative Instrument titled the  Coronavirus Economic Resonse Package (Payments and Benefits) Rules 2020 (the Rules).

Australian Government Treasury - Extension of the JobKeeper Payment Fact Sheet

 

Additional decline in turnover tests
To receive JobKeeper payments from 28 September 2020, businesses will need to meet the basic eligibility tests and an extended decline in turnover test based on actual GST turnover.   


30 March to 27 September 2020

28 September to 3 January 2021

4 January 2021 to 28 March 2021

Decline in turnover

Projected GST turnover for a relevant month or quarter is expected to fall by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.*

Actual GST turnover in the September 2020 quarter (July, August & September) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019.

The decline for the quarter needs to be met to continue receiving JobKeeper payments.

Actual GST turnover in the December 2020 quarter (October, November & December) fell by at least 30% (15% for ACNC-registered charities, 50% for large businesses) compared to the same period in 2019. The decline for the quarter needs to be met to continue receiving JobKeeper payments.


* Alternative tests potentially apply where a business fails the basic test and does not have a relevant comparison period.

Most businesses will generally use their Business Activity Statement (BAS) reporting to assess eligibility. However, as the BAS deadlines are generally not due until the month after the end of the quarter, eligibility for JobKeeper will need to be assessed in advance of the BAS reporting deadlines to meet the wage condition for eligible employees. However, the ATO will have discretion to extend the time an entity has to pay employees in order to meet the wage condition.

Alternative arrangements are expected to be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group). 

Alternative tests
The Commissioner of Taxation will have discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019. These alternative tests have not as yet been released.

Considering payments to employees for JobKeeper 2.0 won't be required until October, we don't anticipate the ATO giving us guidance on the alternate tests until details are decided by them. It could well be later in September before we hear news. We will update you once known.

JobKeeper payments
From 28 September 2020 the payment rates for JobKeeper will reduce and split into a higher and lower rate.

Whether an eligible employee can access the higher or lower rate will depend on the number of hours they worked during a 4 week test period. The Government indicates that the higher rate will apply to employees who worked at least 20 hours a week on average in the four weeks of pay periods prior to either 1 March 2020 or 1 July 2020.

JobKeeper

28 September to 3 January 2021

4 January 2021 to 28 March 2021

Payment

$1,200 per fortnight per employee or business participant who worked>20 hours per week

· $750 per fortnight per employee or business participant working < 20 hours per week

$1,000 per fortnight per employee or business participant who worked>20 hours per week

$650 per fortnight per employee or business participant working < 20 hours per week

 

Assessing if an employee has worked 20 hours or more
JobKeeper payments from 28 September 2020 are paid at a lower rate for employees who worked less than 20 hours per week on average in the four weeks of pay periods before 1 March 2020 and the four weeks of pay periods before 1 July 2020.

The Commissioner of Taxation will have discretion to set out alternative tests for those situations where an employee's or business participant's hours were not usual during February or June 2020. Also, the ATO will provide guidance on how this will be dealt with when pay periods are not weekly. This guidance is not as yet available.

Can I keep getting JobKeeper until September?
If your business and your employees passed the original eligibility tests to access JobKeeper, and you have fulfilled your wage requirements, you can continue to claim JobKeeper up until the last JobKeeper fortnight that ends on 27 September 2020.  

ATO Assistant Commissioner Andrew Watson said in a recent interview, "Once you're in, you're in to the end of September. If you meet the eligibility test once, you're in it for the whole time." The original eligibility test was a once only test although there are ongoing conditions that need to be satisfied for each JobKeeper fortnight. 


JobKeeper fortnight



Payment rate

1

30 March 2020 – 12 April 2020

JobKeeper 1.0

Eligibility period 1

$1,500 per fortnight

2

13 April 2020 – 26 April 2020

3

27 April 2020 – 10 May 2020

4

11 May 2020 – 24 May 2020

5

25 May 2020 – 7 June 2020

6

8 June 2020 – 21 June 2020

7

22 June 2020 – 5 July 2020

8

6 July 2020 – 19 July 2020

9

20 July 2020 – 2 August 2020

10

3 August 2020 – 16 August 2020

11

17 August 2020 – 30 August 2020

12

31 August 2020 – 13 September 2020

13

14 September 2020 – 27 September 2020

14

28 September 2020 – 11 October 2020

JobKeeper 2.0

Eligibility period 2

High rate: $1,200

Low rate: $750

15

12 October 2020– 25 October 2020

16

26 October 2020 – 8 November 2020

17

9 November 2020 – 22 November 2020

18

23 November 2020 – 6 December 2020

19

7 December 2020 – 20 December 2020

20

21 December 2020 – 3 January 2021

21

4 January 2021 – 17 January 2021

Eligibility period 3

High rate: $1,000

Low rate: $650

22

18 January 2021 – 31 January 2021

23

1 February 2021 – 14 February 2021

24

15 February 2021 – 28 February 2021

25

1 March 2021 – 14 March 2021

26

15 March 2021 – 28 March 2021


Please contact our office if we can be of any assistance. 

Business Support Fund - Expansion  
10 September 2020

A friendly reminder that applications for the business support fund grant outlined in our newsletter on 12 August 2020 close in 4 days

Details can be found at Business Victoria - Business Support Fund -Expansion

Please contact our office if we can be of any assistance. 

Business Resilience Package 
22 September 2020

$3 billion in cash grants, tax relief and cashflow support will be delivered to Victorian businesses that have been most affected by coronavirus (COVID-19) restrictions. 

Below are some key highlights from the Business Victoria – Business Resilience Package. We encourage everyone to look at what is available.

  • $30 million worth of grants for small and medium businesses as part of the Melbourne CBD recovery fund to pay for equipment, convert spaces like rooftops and courtyards into hospitality zones and remodel internal layouts to allow for the better flow of patrons.
  • $58 million for grants of up to $5,000 for hospitality businesses with an annual payroll of less than $3 million to help them adapt to outdoor dining.
  • $20 million voucher program to assist sole traders and small businesses in building their digital capability through off-the-shelf digital programs such as Shopify or Square online and workshops designed to help adapt to online operations.

Through the business support package, there has been significant additional handouts, being:

The third round of the Business Support Fund - Small and medium sized business

Applications for the third round of the Business Support Fund opened on 18 September 2020. Full details can be found at Business Victoria - third round of the Business Support Fund.

Who can apply for a grant?

You may be eligible for a grant if your business operates in an industry sector that is Restricted, Heavily Restricted or Closed and for which restrictions are not easing between the First and Second Steps in the 'How we work' roadmaps.

A downloadable list of eligible sectors is available on the third round of the Business Support Fund web page.

Businesses in the above sectors must also:

  • operate a business located within Victoria; and
  • participate in the Commonwealth Government's JobKeeper Payment schemeExternal link; and
  • employ people and be registered for Workcover Insurance with WorkSafe Victoria; and
  • have had an annual payroll of less than $10 million in 2019-20; and
  • be registered for Goods and Services Tax (GST); and
  • hold an Australian Business Number (ABN); and
  • be registered with the responsible Federal or State regulator.

Businesses that have received a grant from the Licensed Hospitality Venue grant program are not eligible to receive a grant from this program.

Licensed Hospitality Business

Eligible hospitality businesses will receive grants of up to $30,000 based on the location of their premises and maximum patron capacity.

Eligibility details can be found at Business Victoria – Licenced Hospitality Venue Fund. Applications will be open in the coming days.

Sole Trader Support Fund

The Sole Trader Support Fund provides grants up to $3,000 to over 30,000 eligible sole traders in sectors such as retail, accommodation and food services, creative and media, hairdressing, gyms, events, education and training who operate from commercial premises or location as a tenant. Applications will be open in the coming days.

Other grants

Details have not yet been provided for grants available to Alpine businesses and Business Chambers and Trader Groups. If you are affected, we invite you to keep an eye on Business Victoria – Business Resilience Packages as details will most likely be released in the near future.

 

JobKeeper 2.0
24 September 2020

There is now extensive information available online in relation to JobKeeper 2.0. We provide below some basic commentary on the key points on the new legislation.

Eligibility for JobKeeper 2.0

  • To receive JobKeeper from 28 September 2020, eligible employers need to assess their decline in turnover with reference to actual GST turnover for the September 2020 quarter (for JobKeeper payments between 28 September to 3 January 2021), and again for the December 2020 quarter (for payments between 4 January 2021 to 28 March 2021). The comparison period must be the period in 2019 that corresponds to the turnover test period ie. comparing September 2020 quarter turnover with September 2019 quarter turnover.
  • The decline in turnover test is the same decline in turnover criteria as JobKeeper 1.0 namely;
  • 15% for ACNC-registered charities,
  • 30% for businesses with aggregated turnover <$1 billion
  • 50% for businesses with aggregated turnover >$1 billion

For the majority of our clients, this will mean a 30% decrease is required.

  • What is included in GST turnover?
  • Current GST turnover is based on actual sales that have been made and also includes proceeds from the sale of capital assets, unless the sale is input taxed. Current GST turnover includes taxable and GST-free supplies, but should exclude input taxed supplies such as residential rental income and financial supplies like dividends, interest etc.
  • JobKeeper and ATO cash flow boost payments should be excluded from the calculation along with other payments that don't represent consideration for a supply made by the entity.
  • GST reporting method
  • When applying the new turnover reduction tests for the September 2020 quarter and December 2020 quarter, entities that are registered for GST must use the same method that is used for GST reporting purposes. 
  • Not registered for GST
  • Entities that are not registered for GST can choose whether to calculate GST turnover using a cash or accruals basis, but must use a consistent method.
  • Alternative tests for GST turnover
  • Alternative tests for JobKeeper 2.0 eligibility will largely be the same as JobKeeper 1.0. The updated alternative test applies current GST turnover in place of projected GST turnover, in line with the basic decline in turnover test for the JobKeeper extension from 28 September.
  • There is a requirement to notify the ATO that you are using an alternative test and which test you applied.
  • Changes to new business eligibility
  • This has been changed to accommodate testing for the whole September quarter against the applicable prevailing periods. These will depend on the commencement date of the business.
  • Changes to the 'substantial increase in turnover test'
  • The updated test allows an entity to access the test if there was an increase in turnover of at least 50%, 25% or 12.5%, twelve, six or three months respectively before 1 March (the previous twelve, six or three months 'before the test period' is still available).
  • Changes to the 'irregular turnover test'
  • Entities now have a choice to use the period immediately before the applicable turnover test period or before 1 March 2020 when testing whether the entity's lowest turnover quarter was no more than 50% of the highest turnover quarter for the quarters ending in the twelve months immediately before the turnover test period.
  • Changes to multiple disposals, acquisitions and restructures
  • The new alternative test removes the requirement for entities with multiple acquisitions, disposals and restructures to use the period after the last of the sequential transactions. The entity may now apply these tests to each acquisition, disposal or restructure separately.
  • Sole trader or small partnership with sickness, injury or leave
  • The revised test allows a sole trader or small partnership to use the current GST turnover for the month immediately before the month in which the sole trader or partner did not work.
  • JobKeeper payments
  • From 28 September 2020, the JobKeeper payment rate will reduce and split into a higher (Tier 1) and lower (Tier 2) rate based on the number of hours the employee worked in a specific 28 day period prior to 1 March 2020 or 1 July 2020.
  • For eligible employees who have been employed since 1 March 2020, employers need to choose the reference period that provides the best outcome for the employees. That means, when applying the 80-hour test period in February and June, if an employee passes one of the 80-hour tests, they are deemed to be Tier 1 employees.
  • Once the JobKeeper payment tier is tested for extension 1, the same payment tier applies to extension 2.
  • If employers are in JobKeeper 1.0 but are not eligible for JobKeeper 2.0, you must notify all employees of this.
  • If employers are not eligible for extension 1 in JobKeeper 2.0, you may still qualify and be able to apply for extension 2 (4 January 2021 to 28 March 2021).
  • Businesses can qualify and claim JobKeeper 2.0 even if they did not qualify for JobKeeper 1.0.
  • If you are already enrolled in JobKeeper 1.0, there is no need to re-enrol for JobKeeper 2.0. Employees in receipt of JobKeeper 1.0 do not need to complete a new nomination notice for JobKeeper 2.0.

JobKeeper top-up payments for pay periods commencing on 28 September 2020
If you currently have staff rostered on who will be paid on or after 28 September 2020 (FN14), be mindful when making top-up payments that you have determined you will qualify for JobKeeper 2.0. Employers have until 31 October 2020 to meet the wage condition for eligible employees in the fortnight commencing 28 September 2020 to 12 October 2020.

In the meantime, we suggest you review the tiers for all staff in preparation for eligibility of JobKeeper 2.0.
Furthermore, businesses will be required to nominate which payment rate (Tier 1 or Tier 2) they are claiming for each of their eligible employees (or business participants) and notify the Commissioner. In addition, you must notify employees of the rate in writing within 7 days of notifying the Commissioner.

JobKeeper payment

28 September to 3 January 2021

4 January 2021 to 28 March 2021

Worked 80 hours or more in the reference period – Tier 1

· $1,200 per fortnight per employee or business participant

· $1,000 per fortnight per employee or business participant

Worked less than 80 hours in the reference period – Tier 2

· $750 per fortnight per employee or business participant

· $650 per fortnight per employee or business participant


Jobkeeper payment rates - alternative tests for the 80-hour requirement
If an individual did not work for at least 80 hours in the 'standard' reference periods for working out whether the higher or lower payment rate applies from 28 September 2020 onwards, it is necessary to determine whether this threshold could be satisfied in connection with some alternative reference periods. In broad terms, these are available if the employee's total hours of work and paid leave in the standard reference periods were not representative of the total number of those hours in earlier periods; the individual was not employed during all or part of the standard reference periods; the first pay cycle ended after the reference time; or where an employee has been transferred to a new employer as part of a business sale. Similar rules apply to eligible business participants and religious practitioners.

Employees not tied to hours worked
Some employees will automatically qualify for the higher JobKeeper payment rate. Broadly, this applies if the employer has incomplete records of total hours of work and paid leave, including where salary, wages, commissions, bonuses etc are not tied to an hourly rate or contracted rate. The employee must also fall within specific categories, including where they were paid at least $1,500 in the reference period; they were required to work at least 80 hours under an industrial award, enterprise agreement or contract; or it is reasonable to assume that they worked at least 80 hours during the applicable period.

Eligible Business Participants
For small businesses that were only conducting minor operations pre-Covid, significant consideration should be made regarding what tier eligible business participant falls under. They may only qualify for Tier 2.

The reference period for business participants is the month of February 2020 (the whole 29 days). The ATO's guidance states that records to prove the 80 hours over the 29-day reference period will need to be kept, and these include business diaries, appointment books, log books, hours billed, invoices issued, time sheets or attendance records, or records prepared for other business or statutory purposes.

Once determined, eligible business participants will be required to provide a written declaration confirming they have satisfied the 80 hours actively engaged requirement.

Other than sole traders and self-employed, a business participant must provide a declaration to the business entity confirming their hours worked over the reference period.

For JobKeeper payments from 28 September 2020, the business must notify the Tax Commissioner about whether the higher or lower rate applies to the business participant and notify the participant within 7 days of providing this notice to the Commissioner.

Video resource:
We endorse the quality of the Pitcher Partner webinars and provide a link to their JobKeeper 2.0 recording. We expect a video to be released by them on the alternative test in the coming days.

Pitcher Partners CPN Webinar | JobKeeper 2.0 - Understanding the changes

Additional resources:

 

 

Change Accountants
Change Accountants
Client Tools
Client Tools
Business Centre
Business Centre
WMC Accounting Blog
WMC Accounting Blog
Client Login
Client Login
Request an Appointment
Request an Appointment
cpa tax RGB quickbooks myob reckon