As part of the Federal Government’s recently announced $130bn stimulus package, the JobKeeper payment has been hailed as a relief for employers and employees alike. The Federal Government will effectively pay an employees salary of $1,500 per fortnight before tax by reimbursement through the BAS system.
Whilst the legislation and finer details for the payment have not yet been released (although expected shortly), on 5 April 2020, Treasury has set out some guidance for Employers to assess their potential to access the payment.
The important points of note are:
- Register your interest on the ATO’s website (an online application will be available at a later point in time);
- Employee information will need to be provided to the ATO;
- Each employee (even if paid less than the amount) must be paid a minimum of $1,500 per fortnight before tax;
- Employees must be notified that they are receiving the JobKeeper Payment;
- The ATO will expect monthly information about eligible employees to be provided; and
- Business turnover must be expected to fall by at least 30% (for business with turnover <$1m).
The payments will be for a maximum period of 6 months from 30 March 2020. These reimbursement payments from the ATO will commence in the first week of May through the BAS system.
One of the most uncertain aspects of the payment is the estimation of turnover. Treasury has indicated that the estimation is to be based upon historically lodged BAS one year prior. As an example, to determine whether you expect turnover to fall by 30% in the June quarter BAS and you are a quarterly BAS lodger, you should look at your turnover figures lodged in your June 2019 quarter BAS.
Whilst there is a degree of uncertainty in accurately predicting a fall in turnover, as well as the potential for 12 months prior not being a true indication of estimated turnover, it appears the Commissioner of Taxation will be provided with a discretion to set out alternative tests to establish eligibility and to take additional information into account to determine whether a business has been significantly affected by the impacts of Covid-19.
It is expected that there will also be latitude provided to businesses that estimate a 30% reduction in turnover, in good faith, but actually experience less of a fall than expected.
The Federal Government have no doubted decided to use the ATO systems through BAS lodgement to claim these payments as a method of ensuring that only businesses who are complying with their lodgement obligations are able to claim the payment.
If you have concerns about your lodgement history with the ATO and seek advice on your compliance and eligibility, please contact us to make an appointment via telephone or video conferencing to obtain more specific and detailed advice.
Whilst this article attempts to explain the JobKeeper Payment as succinctly as possible, we suggest that every business should contact their Accountant to determine whether this payment is suitable for their business.
For more detailed advice, our experienced solicitors are available to discuss your specific circumstances. Do not hesitate to contact us on 9523 6111.