Welcomed changes to JobKeeper rules

JobKeeper extension granted

The Taxation Commissioner has extended the enrolment period for the JobKeeper Payment scheme. It has been extended from 30 April 2020 until 31 May 2020.

Businesses that enrol by 31 May are still eligible to claim for the fortnights in April and May, provided that they meet the eligibility requirements for the period.

Be aware, however, that all eligible employees must have been paid the equivalent of $1,500 per fortnight for the fortnights ended 12 April and 26 April 2020, and that these payments must be made to them by 8 May 2020, even if the business does not register until after this date.

To date more than 900,000 businesses have expressed an interest in the wage subsidy.

New alternative tests for businesses

The Federal Government has released further clarification on the JobKeeper payment scheme for those entities that cannot satisfy the basic decline in turnover. In welcomed news over the weekend, the following additional alternative tests were outlined by the Treasurer’s office:

  • Employees employed through a special purpose entity, rather than an operating entity – Business structures that employ staff through a service entity rather than through the main business structure may now qualify for the subsidy if the combined GST turnover of the business satisfies the 30% test.
  • Charities can exclude government revenue – Charities that employ staff (other than schools and universities) can elect to exclude government revenue from the JobKeeper turnover test for the purposes of assessing eligibility for the payment.
  • ‘One in, all in’ principle – Participating businesses in the JobKeeper scheme must ensure that eligible employees who have agreed to participate in the scheme must do so. Employers cannot select which eligible employees will participate in the scheme.
  • Full time students aged 16 and 17 years old – Further clarification has been provided that full time students who are 17 years old and younger, and who are not financially independent, are not eligible for the JobKeeper Payment.
  • International Aid Organisations – Australian residents that are employed by NFPs which participate in the Overseas Aid Gift Deductibility Scheme or for developed country relief are eligible for the JobKeeper Payment.
  • Recognition of religious practitioners – Religious institutions may apply for the JobKeeper Payment on behalf of their practitioners.

The alternative tests outlined above are in addition to the seven circumstances that were announced by the ATO on 23 April 2020. Last week further clarification was provided for entities that may have been affected by a drought or other natural disasters. The legislative instrument also addressed entities in sectors that experience irregular turnover e.g. property and construction.

JobKeeper FAQs

We recommend carefully reviewing the alternative tests before applying for the JobKeeper Payment. Details are provided in the following FAQs – https://treasury.gov.au/sites/default/files/2020-05/JobKeeper_payment_frequently_asked_questions.pdf

Bank to prioritise financial assistance

The banks have assured the Federal Government they will setup hotlines to help businesses who need finance to bridge the gap until the first JobKeeper payments are made.

We are here to help

We will continue to keep you updated with further information on stimulus measures. For further updates, visit HLB Mann Judd’s COVID-19 Resource Centre to help you and your business in this challenging time. Please contact your HLB Mann Judd adviser if you have any questions.