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The JobKeeper Payment Fact sheet 2 - Eligibility

April 15, 2020

The JobKeeper Payment will provide eligible employers with a subsidy of $1,500 per fortnight to continue paying taxable wages to eligible employees from 30 March 2020 for a maximum period of 6 months.

Both employers and employees must be eligible and eligible employers will be required to pass payments directly onto eligible employees as wages or as a subsidy to their wage.

This webinar provides a brief overview of the JobKeeper Payment and explains who is eligible for the JobKeeper Payment.

 

 

Q. Who is an eligible employer for the JobKeeper Payment?

An employer will be eligible to claim the JobKeeper Payment on behalf of their employees if:

  • it has a turnover of less than $1 billion; and
  • their turnover has or will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month) at any time between 30 March 2020 and 27 September 2020. For example, you will be immediately eligible if your March 2020 turnover has reduced by 30% when compared to your March 2019 turnover, or you will become eligible in June 2020 if your turnover has reduced by 30% when compared to your June 2020 turnover.

Employers with a turnover of $1 billion or more are also eligible if your turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month).

Q. Are business owners eligible?

Yes. People who are self-employed are eligible for the subsidy if at the time of applying they:

  • estimate their turnover has or will fall by 30% or more;
  • had an ABN on or before 12 March 2020, and either:
    • had an amount included in its assessable income for the 2018-19 year and it was included in their income tax return lodged on or before 12 March 2020 (or such later time as allowed by the Commissioner), or
    • made a supply during the period 1 July 2018 to 12 March 2020 and provided this information to the Commissioner on or before 12 March 2020 (or such later time as allowed by the Commissioner);
  • are actively engaged in the operation and activities of the business;
  • had a particular role within the business:
    • sole trader—the individual must be the entity;
    • partnership—the individual must be a partner in the partnership;
    • trust—the individual must be an adult beneficiary of the trust; and
    • company—either a director or shareholder in the company.
  • are not entitled to another JobKeeper Payment;
  • are not a permanent employee of any other employer;
  • were aged at least 16 years of age as at 1 March 2020; and
  • are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.

Businesses that are in liquidation are ineligible.

Partnerships

In a partnership only one person can be nominated (as the entrepreneur) to receive the JobKeeper allowance, along with any eligible employees, noting a partner cannot be an employee.

The other partner may be entitled to some other form of income support from Services Australia (e.g. JobSeeker allowance).

Trusts

Trusts can receive the JobKeeper Payments for any eligible employees.

Where beneficiaries of a trust only receive distributions, rather than being paid salary and wages for work done, only one individual adult beneficiary (that is, not a corporate beneficiary) can be nominated to receive the JobKeeper Payment.

A beneficiary who receives the payment cannot also receive the payment as an employee.

Company directors

If company directors receive directors’ fees then an eligible business can nominate one director (in a director capacity) to receive the payment, as well as any eligible employees.

A director who receives the payment cannot also receive the payment as an employee.

Shareholders

An eligible business that pays shareholders that provide labour in the form of dividends can nominate only one shareholder to receive the JobKeeper Payment.

A shareholder who receives the payment cannot also receive the payment as an employee.

Q. Who is an eligible employee for the JobKeeper Payment?

Once a business is considered an eligible employer, your employees will be eligible for the JobKeeper Payment if they:

  • are currently employed (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 basis for longer than 12 months as at 1 March 2020);
  • are at least 16 years old;
  • 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.

Q.  How does a business establish a decline in turnover?

A business will need to nominate either a relevant month or quarter in 2020 in comparison to the same time period in 2019 that can show the business has experienced or is likely to experience the relevant fall in turnover.

The Tax Rules relating to the scheme specify the relevant month or quarter for comparison purposes:

  • March 2020
  • April 2020
  • May 2020
  • June 2020
  • July 2020
  • August 2020
  • September 2020
  • Or the quarter starting on 1 April 2020, or the quarter starting on 1 July 2020

For example, you can make the comparison by comparing the whole of the month of March 2020 with March 2019, or by comparing the quarter beginning on 1 April 2020 with the quarter beginning on 1 April 2019. Using these periods allows the Commissioner to examine changes in GST turnover that is reported.

If you were not in business a year earlier, or your turnover a year earlier is not representative of your usual or average turnover, the ATO will have discretion to consider additional information that the business can provide to establish that you have been adversely affected by the impacts of the Coronavirus. For example because you were scaling up or you turnover is typically highly variable.

Q. What is Projected GST turnover and Current GST turnover?

Turnover is calculated as it is for GST purposes and reported on Business Activity Statements. It includes all taxable supplies and all GST free supplies but not input taxed supplies.

The definitions of terms ‘projected GST turnover’ and ‘current GST turnover’ are those set out in the GST Act (see sections 188-15, 188-20 and 195-1). The Rules make some modifications so that the calculation of the turnover is confined to the relevant period (i.e. the month or the quarter) and is calculated at the end of that period.

The explanatory materials note that projected GST turnover includes:

‘the value of all the supplies that an entity has made or is likely to make in the period. A supply is likely to be made where, on the balance of probabilities, it can be predicted that the supply is more likely than not to be made. The likelihood of a supply being made must be based on a reasonable expectation and considered in the context of the facts and circumstances of a particular business, such as by reference to the terms of a particular contract which requires supplies to be made in a certain period.’

Q.  Are there any obligations on employees?

Yes your employee/s must:

  • notify their principal employer if they have multiple employers.
  • if not an Australian citizen notify you of their visa status to allow you to determine if they are an eligible employee.
  • notify Services Australia if they are currently in receipt of an income support payment.

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Further information

This fact sheet is part of a series on JobKeeper Payment aimed at assisting members understand the requirements. More information is set out in:

#1 The JobKeeper Payment - Overview

#3 The JobKeeper Payment - Applying

#4 The JobKeeper Payment – Receiving the Payment

#5 The JobKeeper Payment – Making changes to working arrangements

#6 The JobKeeper Payment – Record Keeping and Reporting Requirements

The Federal Government has released the following information:

Contact a HIA Workplace Adviser on 1300 650 620 for further information and advice

Current at: 16 April 2020
Reference: NFSIRE132