COVID-19 stimulus package update JobKeeper Payment and other measures Rahul Singh Doug McBirnie Technical Services Manager General Manager Accurium Challenger l
Job Keeper payment What is it? Legislated on 8 th April Still waiting for final Regulation with all the details Starting from 30 March 2020 and ending on 27 September 2020 Wage subsidy for eligible employers in respect of eligible employees and self-employed Payment of $1,500 per fortnight to be paid by ATO to employer in arrears to subsidise employment costs 3
JobKeeper payment Eligible employers Charities and Not Turnover less Turnover $1 for Profits* than $1 billion billion or more Turnover reduced or Turnover reduced or Turnover reduced or likely to reduce by ≥ likely to reduce by ≥ likely to reduce by ≥ 50% 30% 15% * Certain universities and non-government schools have to meet the turnover reduction test based on 30% or 50% threshold 4 Entities liable for Major Bank Levy are ineligible Insolvent on in liquidation entities also ineligible
JobKeeper payment Turnover Turnover has or will likely fall in the relevant month or quarter (depending on Business Activity Statement reporting period) relative to turnover in a corresponding period a year earlier Turnover is calculated as it is for GST purposes and includes all taxable supplies and all GST free supplies but not input taxed supplies Commissioner discretion can be applied where business not in operation for 12 months or prior turnover not representative of usual turnover Some tolerance from the Commissioner 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 Reduction of turnover in consolidated groups will apply to each business in the group 5
JobKeeper payment Ineligible employers Australian Government and its agencies May have State & Territory their own Government and its Government employees wage subsidy agencies measures Local Government and its agencies Foreign Government and its agencies Employers who don’t meet Employers who don’t claim Employers liable for Bank turnover reduction test JobKeeper Payment Levy 6
Job Keeper payment Need to pay a minimum of $1,500 per fortnight to employees Minimum of $1,500 per fortnight needs to be paid to employee with JobKeeper paid monthly in arrears Can be paid by a combination of: Gross salary, wages, commissions, bonus, allowances Salary sacrifice Other amounts agreed with the employee 7
JobKeeper payment Eligible employees Currently employed by the eligible employer (including those stood down or re-hired) Were employed by the employer 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, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020 Were a resident for Australian tax purposes on 1 March 2020; and Are not in receipt of a JobKeeper Payment from another employer. 8
JobKeeper payment Ineligible employees Employer doesn’t claim JobKeeper payment Temporary visa holders Casuals NOT employed on a regular and systemic basis for longer than 12 months as at 1 March 2020 Terminated / redundant before 1 March 2020 and not rehired OR terminated / redundant on or after 1 March 2020 Different to being “stood down” - Receiving Paid Parental Leave from Services Australia On Worker’s compensation and not working Government employees May have wage subsidy provided by the relevant Government - 9
JobKeeper payment Flow of funds First payment starts in first week of ATO May Monthly in arrears Reflects payment made to employee through STP Employer Notify employee that employer is receiving Employee Notify ATO monthly of turnover Need to be paid minimum of $1,500 per reduction test met fortnight 10
JobKeeper payment Example Real estate business with two employees Full time employee earning $3,000 per fn Part time employee earning $1,000 per fn ‒ Gets paid $1,000 per fortnight by employer ‒ Gets paid $3,000 per fortnight by employer ‒ Gets paid an additional $500 per fortnight by employer ‒ Employer gets $1,500 from JobKeeper Payment to subsidise the cost of employee ‒ Employer gets $1,500 from JobKeeper Payment to subsidise the cost of employee 11
JobKeeper payment Eligibility criteria for sole traders Turnover has or will fall by by 30% or more Had an ABN on or before 12 March 2020 and either: Had assessable income for 2018-19 FY and included in their lodged tax return by 12 March 2020 (unless time - extended by Commissioner) Made a supply during 1 July 2018 to 12 March 2020 and provided this information to the Commissioner on or before - 12 March 2020 (unless time extended by the Commissioner); Actively engaged in the business At least 16 years of age at 1 March 2020 An Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020 & Australian tax resident Not entitled to JobKeeper Payment from another payer. 12
JobKeeper payment Not employee or a sole trader but carry on a business through an entity Partners One partner can be nominated - Trusts One beneficiary can be nominated - Companies One director can be nominated if directors are solely being paid through director fees - One shareholder can be nominated if shareholders are solely being remunerated - through dividends Share traders and property owner carrying on a business Potentially - 13
JobSeeker Payment and Coronavirus Supplement 14
Payment rate comparison JobSeeker including $550 Coronavirus Supplement^ Situation Fortnightly Energy Supplement Coronavirus Total if also eligible payment per fortnight Supplement per for Coronavirus fortnight Supplement* Single $565.70 $8.80 $1,124.50 Single with at least $612 $9.50 $1,171.50 $550 one child Partnered (each) $510.80 $7.90 $1,068.70 JobKeeper ($1,500 per fortnight) delivers greater monetary benefits, however need to be employed or self-employed. Business entities distributing passive income may only have one person eligible. ^^ Coronavirus Supplement payable from 27 April 2020 for maximum of six months 15 * May be higher if a person is a non-homeowner and also eligible for Rent Assistance.
JobKeeper and JobSeeker Payment JobKeeper JobSeeker Asset test relaxed but still Non means tested income tested Employees need to be on Employees not on the the books of the employer books of the employer will on 1 March and need to consider JobSeeker continuously since JobKeeper payments are Eligible sole traders could assessable income for pick and choose but would JobSeeker so for most generally be better off people will cancel under JobKeeper JobSeeker Partnerships, trusts and Partnerships, trusts & companies where companies where individuals only receive individuals only receive passive income – anyone 16 passive income – only one not receiving JobKeeper person eligible may consider JobSeeker
Relaxed eligibility for relevant income support Relaxed rules enhancing eligibility For Jobseeker Payment Assets Test - Definition of ‘unemployed’ - Liquid of ‘unemployed’ - Ordinary waiting period - Newly arrived resident’s waiting period - Seasonal worker preclusion periods - Mutual obligations requirement changes Income Maintenance Period (IMP) and Compensation Preclusion Periods still apply 17
Relaxed eligibility for relevant income support Relaxation on definition of unemployment For Jobseeker Payment, a person can be considered unemployed if For sole traders and self-employed: business was suspended, or suffered a reduction in turnover, as a result of the adverse economic effects of the coronavirus The person’s working hours were reduced (including to zero) as a result of the adverse economic effects of the coronavirus Person is in self-isolation as a result of advice of a Government body or a health professional regarding the coronavirus and the person’s working hours were reduced (including to zero) Secretary may require employees to use leave entitlements but someone on leave without pay could be considered to be unemployed 18
Jobseeker income test Income test Single and not a principal carer $104 to $254 per fortnight 50 cents reduction Above $254 per fortnight 60 cents reduction No entitlement at $1,086.50 per fortnight 19
JobSeeker income test Income test Partnered – personal income test $104 to $254 per fortnight 50 cents reduction Above $254 per fortnight 60 cents reduction No entitlement at $993.50 per fortnight But also take into account partner’s income Partner’s income until 26 April 2020 From 27 April 2020 Partner’s income $993.50 No impact No impact For each $ > $993.50 per fortnight 60 cents reduction 25 cents reduction No entitlements at $1,858 per $3,068.80 per fortnight fortnight 20
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