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Qualifying for JobKeeper

Cameron Finlay • Apr 13, 2020

The JobKeeper legislation has now been passed, and the detailed rules set out in that legislation make some of the previously published information obsolete.

Qualifying for JobKeeper

The two issues to now qualify for JobKeeper payments are:

- Pay your employees the pre tax minimum of $1,500 per fortnight

- Determine whether you believe the 30% decline in turnover will occur.

Paying Eligible Employees

You must keep paying eligible employees.

There are 13 fortnights in the program, commencing from Monday 30 March, and you qualify for JobKeeper on a fortnight-by-fortnight basis.   To qualify, a particular employee in any fortnight must be paid the minimum pre-tax $1,500 in that fortnight (or whatever the payroll period may be).

If the employee is not paid each fortnight then the employer will not qualify for JobKeeper in the first place.   This means the employer may need to fund two or possibly even three fortnights' worth of wages from 30 March before receiving any JobKeeper money in early May.

If you don't qualify for some reason you can't claw back the wages paid.   If you decide to pay less than the $1,500 or intend to pay when the JobKeeper is either confirmed or received, you may not receive JobKeeper (and also may lose the employee too).

Decline in Turnover

Firstly, ignore the previous Fact Sheets and FAQ and Media announcements, the actual rules will operate differently.

There are two parts to the decline in turnover requirements.

1. Determine the percentage decline threshhold that applies to you, and

2. Determine if you will suffer that percentage decline.

For most businesses, the turnover decline threshhold is 30%.

What constitutes turnover is sourced from the GST rules; being the revenue excluding GST and GST-free income.   Ignore non GST income like interest, dividends and residential rents.

Then, compare a month or even a quarter now against the same month or quarter in 2019.   This does not have to be the same as a GST month or quarter; you choose the time-frame to compare, for example mid March to mid April.   The months are March to September (this year to last year) or the quarters ending June and September (this year to last year).

You only need to establish the decline in turnover once, it is not a continuing requirement.

Forecast of Turnover Decline

Your turnover for March may already have fallen the 30%, and this information will be provided in an ATO application form (which is yet to be issued).

You could be expecting April to decline at least 30%, perhaps due to cancelled orders, or being closed, or lack of new orders.   That would meet the requirements for the two fortnights in April (ending 12 th and 26 th April).

Perhaps the 30% decline won't show in April, so you could instead compare the predicted June 2020 quarter to the June 2019 quarter.

The ATO has been given discretion to determine alternative ways of measuring turnover decline, but this has not been released as yet.

What if Actual Turnover Decline is not less than 30%?

It does not automatically mean repayment of JobKeeper amounts.   The onus is on the taxpayer to show the prediction was reasonable when made (a list of cancelled orders, a daily list of total orders received, or perhaps daily enquiries).   Then, show the new strategies that were successful in improving sales, which were not evident or succeeding at the time the prediction was made.

Principals who do not take a Wage

A business can nominate one person for JobKeeper where that person is active in the business although not recorded as an employee, and who perhaps receives payment by trust distribution, dividend , share of profit etc., instead of a wage.

Compliance

The program is subject to ATO compliance and audit, and it will undertake activities to identify multiple or ineligible payments to individuals.   There will also be integrity rules to prevent employers contributing to get inappropriate access to payments.

There are large penalties for those trying to illegally access benefits under the program.

Steps Now

1. Register for JobKeeper if you have not done so already, at:

2. An application should soon be forthcoming, with Single Touch Payroll data, or a form if not using STP.

3. Compile evidence to support your turnover (eg., March, or April, or March to June quarter).

4. The deadline to submit the application is Sunday 26 April 2020 (form yet to be released)., and for the same period last year.

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