We would like to take this opportunity to update you on the JobKeeper Payment (JKP) Scheme.

Bills passed but limited detail yet

Yesterday, the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 was introduced and passed both Houses of Parliament. Unfortunately, it did not contain the finer detail of how the JKP Scheme (‘the Scheme’) will operate.

What it did was set up a framework including giving the Treasurer the power to make Rules, by way of Legislative Instrument, as to how the Scheme will work. These Rules are not currently available.

ATO’s role in the JKP Scheme

Further, as previously announced by Treasury, the Commissioner of Taxation will be given certain discretions relating to the operation of the Scheme, including the ability to provide alternative turnover tests that can be satisfied if the tests already announced by Treasury cannot be met (e.g., that businesses with a turnover below $1 billion must have had or will have at least a 30% reduction in their turnover due to the effect of COVID-19). It is anticipated that the ATO will make this information available once Treasury has released the Rules. We believe this information is imminent and as soon as it is available, we will be working quickly to provide you with further updates.

Are we expecting any major changes?

We believe the information we have been providing you with since the Scheme was first announced by the Government and contained in the factsheets on Treasury’s website will be, on the whole, representative of how the Scheme ends up operating – but as usual the devil will in the detail.

In summary;

• The JKP Scheme provides a wage subsidy for eligible businesses of $1,500 per fortnight per eligible employee
• The JKP Scheme potentially also provides a payment to entities that carry on a business but not actually pay staff under formal employment arrangements including;
  • sole traders
  • partnerships
  • trusts
  • companies
• Payments under the scheme will commence from 1 May 2020 but be applicable for payrolls paid from 30 March 2020
• Eligible businesses will be paid $1,500 per fortnight for each eligible employee
• To be eligible, a business must be able to demonstrate that its ‘turnover’ has or will reduce by greater than 30% compared to the corresponding period last year
• Turnover will be based on the GST definition of ‘turnover’)
• For an employee to be eligible, they must have been
  • Employed as at 1 March 2020, whether still employed or subsequently stood down and re-hired
  • Full time or part time employees or casuals with 12 months continuous service
• Employees are ineligible if they receive paid parental leave or have no capacity to work and are receiving workers’ compensation payments

Next steps:

If you believe you may be eligible for the Scheme, make sure you register your interest on the ATO website.

This is not the formal registration but will get you onto the ATO list and ensure you are kept up to date with the latest developments.

At this stage neither the formal registration process or documentation has been released – once released registrations will need to be submitted by 26 April 2020 to ensure first payments can be made on or around 1 May 2020.

We will be in touch with further clarification next week and in the meantime, wishing you a safe & happy Easter.

Please note:

The above is general information only and you should seek advice relevant to your specific circumstances In relation to taxation, legal and human resources matters.