JobKeeper 2.0
Today, the Prime Minister and the Treasurer announced the much-expected changes to the JobKeeper and JobSeeker schemes.
Details are somewhat minimal and sketchy, and as always, the devil will be in the detail.
So, what do we know?
1. JobKeeper is continuing beyond the end of September.
The current scheme, which provides a payment of $1,500 per fortnight for each employee, business owner or sole trader, continues in its present form until September 25. So the existing payments for July ($3,000 per employee), August (3 fortnights – $4,500) and September ($3,000) will continue in the same way as they currently apply.
i.e. lodge at the end of each month, based on the payroll records etc. and receive the payment within 4 – 7 days.
Until the end of September, there is no change in the reporting requirements.
2. So what changes after the end of September?
Firstly, to continue receiving the JobKeeper payments after September 25, a business needs to re-qualify.
The qualification process (as per reports) appears to be based on BOTH the June AND September quarters. i.e. you will need to show that there has been a reduction of income – year to year – of 30% in each quarter.
If you ‘pass’ in one quarter, but not the other, then the support will stop. And you will not be certain of your qualification until the end of the Septemner quarter – even though the ‘new’ system actually starts before the end of the September quarter.
3. How much will I get – does this change?
Yes, it does, and the changes are significant.
Where the current payment is the same regardless of how much an employee or a business owner was previously earning, the new version will differentiate between full-time and part-time staff.
As a Full-time employee – i.e. over 20 hours per week (this seems to be the description from the media releases, but this may need correction) the payment will reduce from $1,500 to $1,200 per fortnight.
For Part-time employees – 20 hours or less – the payment will reduce to $750 per fortnight. This measure has been justified by the argument that some of these staff are earning more form JobKeeper than they were on their normal employment situation (Which probably ignores so many scenarios around casual jobs, flexible shifts and the like.)
It is likely that there will be some form of evidence required to show the number of hours worked per employee and also for every business owner. This may be required by way of a declaration, or a monthly lodgement via Single Touch Payroll to verify the employment details.
These payments would then be paid for October to December on a monthly basis at the end of each month.
AND THEN THESE PAYMENTS CHANGE AGAIN IN JANUARY.
To continue getting payments beyond December 2020, a business will need to ‘retest’ and show that they are still 30% or more below the previous year (so October – December 2020 compared to October – December 2019)
In January 2021, the fortnightly payments reduce to $1,000 per fortnight for full-time and $650 per fortnight for part-time staff.
4. I am self-employed and have an ABN – how does this affect me? Or I am a Director of a company and don’t get paid ‘on salary’. How does this affect me?
The same rules will apply. i.e. turnover test, verification of hours worked to determine whether you qualify for the full time or part-time rate.
5. What do I need to prepare qualify again for JobKeeper?
This is where prudent bookwork and management is vital. This should be a matter of stating the obvious, but all paperwork must be prepared and lodged on time.
That means:
a) Accounts for each month are completed promptly. You will need to see what your turnover is on a month-to-month basis and be able to compare your results with the same period in 2019.
Review regularly, and be prepared to look at staffing, work arrangements, cashflow management and financial arrangements to manage this process.
Review regularly, and be prepared to look at staffing, work arrangements, cashflow management and financial arrangements to manage this process.
b) Bas returns for the June, September and December quarters will need to be lodged on time;
c) The ATO will be looking at the turnover as shown in the Bas for these periods to compare to the previous year to verify the claims made regarding reduction in turnover.
d) Keep a very close eye on your cashflow and receivables. As all businesses will need to pay their employees before receiving JobKeeper – and may have only 1 or 2 days notice at the end of September to determine if they will qualify for the next quarter – flexibility and agile management will be key.
6. I qualified before but did not claim. Can I claim now?
Or My turnover has dropped now so that I will qualify now, but I did not before – can I apply now?
Yes, but the employment scenario is still based on employment details as at March 1, 2020.
No new employees will qualify, so if any staff have left since March 1, 2020, and have been replaced, and / or new employees have started since March 1, 2020, the new employees WILL NOT QUALIFY for JobKeeper in your business.
There will be more that will come from the Government and the Tax Office, and we will need to wait for the delayed Parliamentary session to confirm the final details, but this is where we are at right now.
Any questions? Email me at stuart.smith@fiscalartisans.com.auor on this blog and I will do my best to answer your questions.
Cheers!
