As JobKeeper is a “before tax” payment and therefore payments made to employees under JobKeeper arrangements must have PAYGW withheld where appropriate, are these payments eligible for inclusion in the calculation of the Cash Boost scheme?
Yes, where the other criteria for the Cash Boost assistance are satisfied.
What are the withholding and “on-cost” obligations for payments made to employees under the JobKeeper scheme?
JobKeeper is a “before tax” payment and therefore payments made to employees under JobKeeper arrangements must have PAYGW withheld where appropriate.
Taxpayers should look to any announcements made their State Governments regarding concessions for Payroll Tax, workers compensation payments, etc. as these many vary State to State.
Employers are not required to make superannuation contributions in respect of payments made to satisfy the wage condition.
For example, if an employee normally receives $1,000, but the employer paid them $1,500 to satisfy the wage condition, then the employer will only be required to make superannuation contributions in relation to $1,000.
However, if an employee normally receives $2,000, the employer will continue to be required to make contributions in relation to that amount.
An employer will not be required to make superannuation contributions for an employee who is stood down. If an employer pays a stood down employee $1,500 to satisfy the wage condition for receiving the JobKeeper payment, then the entire amount will be disregarded for superannuation guarantee purposes.
Where the individual is a sole trader, who receives the nomination notice?
In accordance with the JobKeeper Rules s.12(5), where the individual is a sole trader the nomination form must be given to the Commissioner.
What is the situation for businesses and employees where the business has changed hands?
Subsection 9(6) of the Rules provides some flexibility for any changes in ownership of a business and movement of employees within the same wholly owned group and other business sale situations. It means that employees are not disadvantaged if these events, which are ordinarily beyond their control, occur.
A person can therefore be treated as an eligible employee of the same employer even if the business or non-profit body in which the person is employed changes hands after 1 March 2020. It also means that in working out if a person is a long term casual employee of an employer, employment in a business or non-profit body in the 12 month period ending on 1 March 2020 can be counted even if the business or non-profit body changed hands during that period.
For the purposes of qualifying as an eligible business participant, what does the term “actively engaged in the business” mean?
This requirement is not clarified other than to note in the Explanatory Statement to the JobKeeper Rules:
- The business participation requirements are that, at any time in the fortnight,
the individual is actively engaged in the business carried on by the entity. The
individual must be actively engaged in the operations and activities of the body.
- Where a business has entered liquidation or an individual has become
bankruptcy, they are not eligible for JobKeeper assistance.
- However where the business operations have ceased due to the COVID-19 crisis,
but the eligible business participant is still working hard in the background to
give the business the best opportunity to survive the crisis, such as exploring all
the Government assistance available, then the eligible business participant is still
actively engaged in the business even though the business itself is not operating.
If a sole trader is also employed in a business other than their own, can the sole trader get the JobKeeper assistance as an eligible business participant of their sole trader business?
No, if the terms of the employment are not as a casual employee. Where an individual is both a sole trader and a full-time or part-time employee they must seek JobKeeper assistance through their employer.
Is there a minimum turnover test for sole traders?
No. However the normal rules around business v. hobby would apply.
What is the situation where an employee who has been with the employer less than twelve months, moved from casual to permanent?
Provided the individual was an employee (other than a casual employee who is not a long-term casual employee) at 1 March 2020 they will satisfy that part of the eligible employee criteria.
The test is the employee’s status as at 1 March 2020, not what came before that.
Are company directors who are also employees eligible for JobKeeper assistance?
Provided the directors meet the criteria as eligible employees, the company will be able to seek JobKeeper assistance on their behalf.
However as employees they will not be able to act as the nominated eligible business participant of the company.
Are charities eligible for JobKeeper assistance?
Yes, provided they meet the 15% decline in turnover test, together with the eligible employer and eligible employee tests.
Is there a JobKeeper checklist?
Yes, the ATO has provided checklists on the website to assist employers and businesses through the registration process.
Does receiving JobKeeper assistance preclude an employee from having a second job?
No, however JobKeeper assistance can only be claimed from one employer. Where one job is permanent and one is casual, the employee should nominate the permanent role as the employer from which they will receive JobKeeper assistance.
If the individual is seeking the JobKeeper payment from their business as an eligible business participant, the individual can only be employed by another employer as a casual
Do all employees need to provide an Employee Nomination Notice?
Yes, as the Employee Nomination Notice is the employee’s confirmation that they meet all the eligible employee criteria, all employees need to provide an Employee Nomination Notice.
Does the employee have a choice as to which employer they nominate?
Yes, individuals with one or more full time or part time jobs are free to nominate any one of those full time or part time jobs. Similarly, individuals with multiple long term casual jobs can nominate any one of those casual jobs.
What is the situation where an employee is currently on less than $1,500 per JobKeeper fortnight?
In this case the employer can either (a) increase the employee’s salary to $1,500 per JobKeeper fortnight and receive the JobKeeper assistance as a reimbursement later; or (b) keep the employee on their current salary and bear the entire cost of that salary without Government assistance. However, an employer cannot pick and choose which employees receive JobKeeper. The scheme is a “one in all in” scheme. If the employer wants to bear the entire cost of the salary of one employee, it must also do that for all other eligible employees. That is, the employer will not elect to be part of the JobKeeper scheme.
In relation to the JobKeeper scheme, what is the situation where a business has closed?
If a business has closed and terminated all of its employees, it is not eligible to receive JobKeeper payments. If a business has closed, but will reopen at a later time, it is still necessary for its employees to remain “on the books” for the JobKeeper payments to be made to those employees.
Also, an entity does not qualify for the JobKeeper scheme at a time if:
- where the entity is a company - a liquidator or provisional liquidator has been appointed in relation to the company; or
- where the entity is an individual - a trustee in bankruptcy has been appointed to the individual's property.