The Morrison Government’s approach to rolling out JobKeeper has confused many Australian workers and businesses.
Below is a four-step guide to the wage subsidy, followed by an FAQ.
1. What type of business are you? Or what type of business do you work for?
The JobKeeper program covers all business types, including not-for-profits, with the exception of those listed below.
• Australian Government and its agencies,
• State and Territory governments and their agencies,
• Foreign governments and their agencies;
• Local council governments;
• Wholly-owned corporations of any of the above; and
• A business subject to the Major Bank Levy.
2. What is the size of your business?
• A business which has an aggregated turnover of less than $1 billion needs to estimate their GST turnover has fallen or will likely fall by 30 per cent or more;
• A business which has an aggregated turnover of $1 billion or more needs to estimate their GST turnover has fallen or will likely fall by 50 per cent or more;
• Charities registered with the Australian Charities and Not-for-profits Commission (ACNC), will be eligible for the subsidy if they estimate their GST turnover has fallen or will likely fall by 15 per cent or more relative to a comparable period.
This lower turnover decline test does not apply to universities and non-government schools that are registered charities, who will remain subject to the turnover decline tests set out above for businesses.
IMPORTANT
To establish that a business has faced or is likely to have the required fall in turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or quarter relative to their turnover in a corresponding period a year earlier.
However 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, 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. There will be some tolerance where employers, in good faith, estimate a 30 per cent or more or 50 per cent or more fall in turnover but actually experience a slightly smaller fall.
3. Does your business employ eligible workers?
An eligible employee is an employee who:
• Is currently employed by the eligible employer (including those stood down or re-hired);
• Is a full-time or part-time employee, or a casual employed on a regular and systematic basis for longer than 12 months as at 1 March 2020; is a permanent employee of the employer, or if a casual employee, not a permanent employee of any other employer; was aged 16 years or older at 1 March 2020;
• Was an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020;
• Was a resident for Australian tax purposes on 1 March 2020; and
• Is not in receipt of a JobKeeper Payment from another employer.
4. If you meet the criteria, now register.
If your business employs workers who are eligible, you can register for the JobKeeper subsidy on the ATO website.
JobKeeper Registration: https://www.ato.gov.au/general/gen/jobkeeper-payment/
FREQUENTLY ASKED QUESTIONS
Is my business eligible for JobKeeper?
Employers (including not-for-profits) will be eligible for the subsidy if:
• Their business has an aggregated turnover of less than $1 billion (for income tax purposes) and estimate their GST turnover has fallen or will likely fall by 30 per cent or more; or
• Their business has an aggregated turnover of $1 billion or more (for income tax purposes) and estimate their GST turnover has fallen or will likely fall by 50 per cent or more.
• Charities registered with the Australian Charities and Not-for-profits Commission (ACNC) will be eligible for the subsidy if they estimate their GST turnover has fallen or will likely fall by 15 per cent or more relative to a comparable period.
This lower turnover decline test does not apply to universities and non-government schools that are registered charities, who will remain subject to the turnover decline tests set out above for businesses.
Is my employee eligible for JobKeeper?
An eligible employee is an employee who:
• Is currently employed by the eligible employer (including those stood down or re-hired);
• Is a full-time or part-time employee, or a casual employed on a regular and systematic basis for longer than 12 months as at 1 March 2020; is a permanent employee of the employer, or if a casual employee, not a permanent employee of any other employer; was aged 16 years or older at 1 March 2020;
• Was an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020;
• Was a resident for Australian tax purposes on 1 March 2020; and
• Is not in receipt of a JobKeeper Payment from another employer.
How does my business register for JobKeeper?
Eligible employers need to elect into the scheme. If you want to participate, you can register your interest on the ATO website to keep updated on information about the JobKeeper Payment.
JobKeeper Registration: https://www.ato.gov.au/general/gen/JobKeeper-payment
I run a business as a partnership - are we both eligible for a JobKeeper payment?
No. Only one partner can be nominated to receive a JobKeeper Payment along with any eligible employees, noting a partner cannot be an employee.
What if I don’t have the money to continue paying my eligible employees until the payments are made by the ATO?
The JobKeeper Payment is a reimbursement scheme that will be paid by the ATO monthly in arrears. In cases where this presents cash flow difficulties, businesses may want to speak to their bank to discuss their options. The banks have said businesses may be able to use the upcoming JobKeeper payment as a basis to seek credit in order to pay their employees until the scheme is making its first payments.
My business only started three months ago or had experienced growth over the past year and won’t show a 30% write-down in turnover - am I eligible to apply for JobSeeker?
To establish that a business has faced or is likely to face a 30 per cent or more or 50 per cent or more fall in turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or quarter (depending on the Business Activity Statement reporting period of that business) relative to their turnover in a corresponding period 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, (for example, because there was a large interim acquisition, they were newly established, were scaling up, 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 (for example, 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 30 per cent or more or 50 per cent or more fall in turnover but actually experience a slightly smaller fall.
As an employee how do I register for JobKeeper?
Employees cannot register for JobKeeper - employers must register with the ATO.
I think I’m eligible for JobKeeper but my business said they aren’t applying - do they have to?
No - there is no requirement for a business to sign up for the JobKeeper program.
What is the difference between JobKeeper and JobSeeker? Which should I apply for?
JobKeeper is administered by the ATO and paid to employers who then pay their employees. JobSeeker is administered by Centrelink and is a form of social security.
My employer says that unless I go from working 2 days a week to 5 days a week they won’t apply for JobKeeper for me, is that allowed?
No. If the employer is an eligible entity and the employee also meets the JobKeeper eligibility criteria the intention of the scheme is that the employer nominates the employee. An employee must receive their normal hourly rate of pay.
Do I pay tax on JobKeeper?
Yes - the JobKeeper payment goes to the business after they pay the employee. Income tax is levied in the normal way for the employee.
I qualify for JobKeeper but my employer has changed my duties/working location, is that allowed?
Yes - The new provisions allow an eligible employer to give directions in relation to a workers’ duties and/or their location of work (including to direct the worker to work from home). A direction to perform duties must be within the employee’s skill and competence, and must be safe (including but not limited to with respect to COVID-19).
A worker’s base rate of pay must be the greater of the otherwise applicable rate of pay, or the base rate for the duties performed. Where a direction is given in relation to work location, the location must be suitable, any associated travel must not be unreasonable. It must be safe to perform the duties (including with respect to COVID-19).
Does JobKeeper count as income for social security purposes?
Yes. Income received through the Job Keeper payment is counted as income from work for social security purposes. This means that it will count towards individual, partner and couple income tests. As a result, social security payments might be reduced, or cut out completely. And eligibility for certain concession cards, like the Low Income Health Care Card, could be impacted.
For example, most single students on Youth Allowance will lose access to Youth Allowance and associated benefits as a result of receiving the JobKeeper payment. This is because the JobKeeper wage subsidy has increased their income (the cut-off for students getting Youth Allowance is $880 in income per fortnight, compared to $1,500 per fortnight from JobKeeper).
Because money from the JobKeeper wage subsidy is counted as income from work, the Age Pension Work Bonus can be used to offset part of it. Income from JobKeeper can also be offset against the Youth Allowance Income Bank. Depending on a person’s circumstances, this could limit how quickly payments will be reduced and/or cut out.
It is possible to receive a social security payment, and JobKeeper wage subsidy at the same time.
Can a person receive JobKeeper, JobSeeker and the Coronavirus Supplement?
Yes. You can access social security and the JobKeeper wage subsidy. The usual social security income tests apply, and JobKeeper payments are counted as income from work.
In most cases, a single person will not be able to access both JobKeeper and JobSeeker unless they are the principle carer of a dependent child.
Labor secured changes to the JobSeeker partner income test that mean from 27 April, the taper rate will reduce. This means it will be possible for one partner to get JobKeeper, and the other partner to get JobSeeker and the Coronavirus Supplement.
What if I am not eligible for JobKeeper?
If you are an Australian citizen or permanent resident, you may qualify for social security support. Please see other responses.
If you hold a temporary visa, the Government has not yet provided meaningful 16 support to temporary visa holders who cannot return home.
However, thanks to Labor’s work in the Parliament, the Social Services Minister, Anne Ruston, can now provide any temporary visa holders with access to JobSeeker, or another appropriate social security payments.
We urge you to contact Senator Ruston to explain why you believe temporary visa holders should have access to JobSeeker: [email protected]
