The JobKeeper Bills were passed by the Commonwealth Parliament yesterday, 8 April. At the time of writing, the Acts as passed were not available on https://www.legislation.gov.au. Therefore we are retaining links to the Bills at the end of this article. The Bills were passed without amendment. The Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 leaves most of the core details to be supplied by Rules, to be made by the Treasurer. As at the time of writing, the Treasurer has not made those rules, nor released a current exposure draft. An exposure draft available on the Treasurer’s website until some time on 8 April was taken down. We have, nevertheless, posted a copy of it below. While there cannot be any guarantee, there is a reasonable likelihood that much of the detail in that draft will find its way into the final Rules when promulgated.
A summary of what we know about the contents of the Bill at present, determined from Treasury announcements (to be updated progressively as we read and digest the Bill is released) is set out below:
Employer Eligibility to claim for employees
To receive the JobKeeper Payment, employers must:
- Apply at gov.au and assess that they have or will be likely to experience the required turnover decline (see below).
- Provide information to the ATO on all eligible employees. This means eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down since 1 March, even if re-hired). For most businesses ATO pre-populates employee data from Single Touch Payroll.
- Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). Employees who receive $1,500 per fortnight or more from their employer will continue to receive their regular income according to their prevailing workplace arrangements. For employees that have been receiving less than this amount, the employer will now need to pay them, at a minimum, $1,500 per fortnight before tax.
- Notify all eligible employees that they are receiving the JobKeeper Payment.
- Provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
- Amount of payments Affected employers will be able to claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for a maximum period of 6 months.
- Turnover test for Eligibility Employers will be eligible for the subsidy if:
- their business has an annual turnover of less than $1 billion and they estimate their turnover has or will likely fall by 30 per cent or more; or
- their business has an annual turnover of $1 billion or more (or is part of a consolidated group for income tax purposes with turnover of $1 billion or more) and they estimate their turnover has or will likely fall by 50 per cent or more; and
- their business is not subject to the Major Bank Levy.
- Self-employed individuals (businesses without employees) will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test outlined above.
- Non-government schools and private vocational education providers are eligible, if they meet the turnover test.
- Turnover is calculated as for GST purposes, and is reported on Business Activity Statements. It includes all taxable supplies and all GST free supplies but not input taxed supplies.
- Business not in operation one year prior If the business was not in operation a year earlier the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that it has been significantly affected by the impacts of the Coronavirus.
- Where turnover one year prior is not representative Where the businesses turnover a year earlier was not representative of their usual or average turnover, (e.g. because of a large interim acquisition, they were newly established or turnover is typically highly variable) the Tax Commissioner will have discretion to consider additional information that the business can provide to establish that it has been significantly affected by the impacts of the Coronavirus.
- What if I get my turnover estimate wrong? 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.
- Consolidated tax groups If a business is part of a consolidated group for income tax purposes, with a turnover of $1 billion or more, the 50 per cent or more turnover test will apply to each business in that consolidated group that business. If the consolidated group has turnover of less than $1 billion, the 30 per cent or more turnover test is applied to each business in that consolidated group. Individual businesses within a consolidated group may be eligible for the JobKeeper payment while other businesses in the group may not be eligible.
Eligibility for employers to claim for business owners
- Director paid by director’s fees An eligible business can nominate only one director who is paid by directors fees to receive the payment (as well as all eligible employees). Other directors cannot claim as employees.
- Shareholder who provides labour An eligible business that pays dividends to shareholders that provide labour will only be able to nominate one shareholder to receive the JobKeeper Payment.
- Business conducted by individuals as trustee(s) A business run by one or more individuals as trustee(s) of a trust will be able to claim for one of those trustees only. The others will not be able to claim as employees.
- Business conducted by partnership will be able to claim the payment for one only of those partners. The other partners will not be able to claim as employees.
Eligible employees are employees who:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed 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);
- are at least 16 years of age at 1 March 2020;
- are an Australian citizen, a permanent resident, or a Special Category (Subclass 444) Visa Holder at 1 March 2020;
- were a tax resident for Australian tax purposes on 1 March 2020; and
- not in receipt of another JobKeeper Payment from another employer.
- Employees receiving Parental Leave Pay from Services Australia are not eligible for the JobKeeper Payment.
- Employees on parental leave from their employer will be eligible.
- 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.
- If your employees receive the JobKeeper Payment, this may affect their eligibility for income support payments and they must report their change in circumstances to Services Australia online at gov.au or by telephone.
Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 (Withdrawn exposure draft)
(The third Bill has been omitted. This is an Appropriation Bill, which provides the funding from Treasury but does not contain eligibilty criteria.)