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COVID-19: further detail on JobKeeper payments

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Further to our article on the COVID-19 JobKeeper measure, and pending the release of legislation, on 5 April 2020 Treasury further updated and expanded its JobKeeper fact sheets and included a ‘frequently asked questions’ (FAQ) document.

While the legislation will answer the “the devil is in the detail” questions, the updated fact sheets and FAQs include further valuable information on the eligibility for, and operation of, JobKeeper.

The information in the fact sheets and FAQs includes:

  • The measure of turnover, for determining eligibility, will be the goods and services tax (GST) definition of turnover (that is, taxable supplies and GST-free supplies but not input taxed supplies).

  • A decline in overseas, non-Australian, sales will not count towards eligibility for JobKeeper. The FAQs do not say whether GST-free export sales will count towards the reduction in turnover.

  • The 30% reduction in turnover requirement will include measures where:

  1. the business has just started or is “lumpy” (for example, due to an acquisition);

  2. the fall is less than 30% but there is a reasonable expectation turnover will decline by that amount; and

  3. the fall is less than 30% but turnover falls by more than that amount later.

  • For charities registered with the ACNC, the reduction in turnover required to be eligible for JobKeeper payments is now 15% (from a 30% decline previously).

  • JobKeeper payments will be available for the period from 30 September 2020 to 27 September 2020 inclusive and employers will receive the first payments by the ATO in the first week of May 2020.

  • Employers need to keep paying employees (a minimum of $1,500 per fortnight) and then seek reimbursement under JobKeeper. For stood down employees, the employer is eligible for JobKeeper payments if it keeps paying the employee a minimum of $1,500 per fortnight (including by ‘back pay’). The FAQ says that employers should contact their bank if making payments to employees (before reimbursement under JobKeeper) causes cash flow problems.

  • Eligible businesses can receive the 50% wage subsidy for apprentices and trainees from 1 January to 31 March 2020 under the Supporting Apprentices and Trainees measure and the JobKeeper payment. Where small businesses receive the JobKeeper payment, they are not eligible to receive the apprentice and trainee wage subsidy from 1 April 2020 onwards.

  • For entities conducting businesses, in addition to eligible employees of those entities:

  1. Partnerships: one partner will be eligible to receive JobKeeper;

  2. Trusts: one individual (non-corporate) beneficiary will be eligible to receive JobKeeper;

  3. Companies that pay directors fees: only one director (not also eligible as an employee) will be eligible;

  4. Companies: where a company pays dividends to shareholders who supply labour, one shareholder will be eligible;

  5. Self-employed: will be eligible if they satisfy the requirements.

  • There will be integrity rules and JobKeeper will be subject to ATO audit and compliance activity.

For more information please contact:

Neil Brydges
Principal Lawyer | Accredited Specialist in Tax Law
M +61 407 821 157 | T +61 3 9611 0176
E: nbrydges@sladen.com.au

Neil Brydges