Jobkeeper 2

This is how Jobkeeper works at the moment.

Eligible employers, sole traders and eligible business participants can enrol for Jobkeeper. You are assessing your own eligibility. At the moment the government will take your word for it.

BUT!!!! Single Touch Payroll and all the other ways the Australian Tax Office have of keeping tabs means you WILL get found out if you do the wrong thing.

You can sign up for it at anytime until Jobkeeper finally ends in 2021 if your business takes a nosedive of 30% or more (50% if you are a very large business). But the payments are not back dated. They start from the month you sign up.

Consult “Eligible employers” on the ATO website for further information.

For informtion on if you are eligible to claim as a business participant see “Partnerships, trusts and companies”.

For a detailed guide on how to enrol – consult “Enrol for the Jobkeeper payment”.

To be eligible your business needs to have suffered (in general terms) a 30% decline in GST turnover. There are a number of ways to work out your eligibility. See “Applying the turnover test”. The criteria is 50% for very large businesses (as in billion dollar GST turnover).

You only need to satisfy the fall in turnover test once (for the first stage of Jobkeeper). So you keep getting it even if the business improves.

Once enrolled, you need to do the business declaration and state the GST turnover every month and give an estimate of expected turnover for the current month (Declarations are made from the 1st of the following month to the 14th of that following month but this doesn’t affect your payments even if your business has improved).

For example: you do the business declaration between the 1st and the 14th of August to claim for July.

But if you don’t do the declaration you will miss out on that previous month’s payment.

Having said that, if you ring the ATO a week or two after the 14th – you can ask for a deferment and do a late lodgement over the phone. But you have to give them a reason as to why you were late lodging.

Jobkeeper is a reimbursement scheme. The government doesn’t pay the employee – they reimburse the employer for paying the employee.

The employer pays employees and the government can see that you have done so via STP (Single Touch Payroll – which is pretty much compulsory for employers now).

Only then does the government reimburses the employer to the tune of $3000 per month ($1500 per fortnight, to be exact. But its paid once a month).

You don’t have to change your pay cycle. Just be sure that the employee has been paid at least $3000 in the month. You can pay more – but not less. So an eligible employee might end up being paid more than they were getting before COVID 19.

Tax is still withheld at the marginal rate. Employers only have to pay superannuation on any amounts above the $3000 per month.

An employee is eligible so long as they were a full-time, part-time or fixed-term employee on March 1, 2020. Or, were a casual for at least 12 months up to the same date. They also need to be 18 as of March 1, 2020.

The first version of Jobkeeper ends on the 28th of September 2020.

“On 21 July the government announced proposed changes to Jobkeeper including an extension through to 28 March 2021. These changes do not impact Jobkeeper payments until after 28 September 2020.” (to quote from the ATO website).

So what does that mean?

You will not need to reapply for Jobkeeper after the 28th of September. But you will have to prove that your business has suffered a significant decline of at least 30% in GST turnover in September quarter (July, August, September) of 2020 – compared to the same quarter of 2019.

To put that another way. Compare the September quarter of 2020 against the September quarter of 2019. If you sufferred a 30% drop (or 50% for a business with a combined turnover of $1 billion or more) then you are elgible for the 1st extension of Jobkeeper.

The payment will scale back to $1200 per fortnight ($2400 per month) for eligible employees who, in the four weeks before 1 March 2020, were working in the business for at least 20 hours a week (on average) and for business participants who were actively engaged in the business for more than 20 hours per week.

But Jobkeeper will finally get around to reducing the payment for part timers (who have formerly been getting the full payment). Employees and eligible business participants who work an average of less than 20 hours a week will get $750 per fortnight ($1500 per month).

And you need to re qualify yet again after the 3rd of January 2021. To be eligible for this last stage of Jobkeeper you will need to demonstrate that your business has had the same decline of 30% or more in GST turnover in the December quarter (October, November, December) of 2020 compared to the same quarter of 2019.

The payment rate for his last stage of the Jobkeeper programme will fall to $1000 per fortnight ($2000 per month) for employees who meet the same criteria as above.

For part time employees and business participants working less than 20 hours a week the payment falls to $650 per fortnight ($1300 a month).

Jobkeeper will finally end on the 28th of March 2021.

What happens after that? Who knows!

But one interesting thing that points to how the government is thinking is that there is a deliberate loophole that seems to mean that as Jobkeeper winds down – you will be able to get Jobseeker – as well as Jobkeeper. You can read an article about this on The Age here

In effect, allowing people to wean off Jobkeeper and move to Jobseeker with a period where they will get both.

To me, this is the government acknowledging that Jobseeker will only delay the day that many (how many?) people will join the ranks of the unemployed.