RS COVID-19 Update - Jobkeeper payments, PAYGW

COVID-19 Update - a summary as at March 31 2020

  • National cabinet will meet again on 3rd April at which point they will discuss arrangements for early childhood and childcare facilities and commercial and residential tenancies.
  • Employers who have vulnerable workers on staff who are continuing to operate as an essential service must now do a risk assessment to determine if the risks can be mitigate etc.
  • JobSeeker partner income test has been raised from $79,762.

Jobkeeper Payment

  • Eligibility - employers with annual turnover <$1 billion who self asses have 30% reduction in revenue since 1 March, >$1 billion must be reduction of 50%. Businesses may be operating through companies, partnerships, trusts and sole traders (includes not for profit entities).
  • Eligible employees must be Australian residents, NZ citizens with subclass 444 special category visa or migrants eligible for Jobseeker or Youth Allowance. Includes self-employed individuals. They must be employed on a full-time or part-time basis, or be casual and have been with the employer for over 12 months. Employees can only receive this from one employer.
  • Eligible employers receive $1,500 per employee per fortnight (for up to six month) for each employee on their books on 1 March 2020 and are still engage by the employer (this includes if they have had to be stood down).
  • Each eligible employee MUST receive at least $1,500 a fortnight from the business before tax. If they are earning less the employer will receive this minimum payment and must pass on the total amount to the employee, if they are earning more then the employer pays the gap. Super applies per usual – employer is to pay on the employee earnings not the $1,500 if this is above their earnings (can if they choose to).
  • Program commences 30 March, first payments (including payments in arrears) will be received first week of May from the ATO.
  • If you are self-employed and can prove eligibility you can apply. 


EXAMPLE: A gym that has been forced to close, since March 1, and stood down all employees can now re-engage them and pay all part-time, permanent, and long-term (>12 mth) casual staff the $1,500 a fortnight (paygw applies) for the next six months. They will not have to pay super as they are not deriving ordinary earnings. The staff will not be eligible for this JobKeeper and Centrelink JobSeeker payment, the JobKeeper payment being the larger of the two.\

Cashflow Boost Employer Payments (PAYGW $20k-$100k)

In order to be eligible businesses must have lodged either their 2019 income tax return prior to 12/03/20 or a 19/20 BAS prior to 12/03/20.

This is not effective until 28 April 2020.

We have fielded a lot of questions around whether we can start to pay wages from trusts, companies etc. this quarter where the entity was registered for PAYGW prior to 12 March (eligibility requirement) but hadn’t been paying wages in the past. The below outlines what is classified as a ‘Scheme’ undertaken in order to access or maximise these payments. If you are in this position, please discuss this with your accountant. They will assess with you on a case by case basis, but essentially commencing paying or increasing wages without other justification would be considered a scheme.


Schemes


You will not be eligible for cash flow boosts if you (or a representative) have entered into or carried out a scheme for the purpose of:

  • becoming entitled to cash flow boosts when you would otherwise not be entitled, or
  • increasing the amount of the cash flow boosts.

This may include restructuring your business or the way you usually pay your workers to fall within the eligibility criteria, as well as increasing wages paid in a particular month to maximise the cash flow boost amount.
Any sudden changes to the characterisation of payments made may cause us to investigate whether the payments are in fact wages. If the payments are wages, we may consider the characterisation of past payments, including whether they should have been subject to PAYGW and whether super guarantee contributions should have been made. You may also have FBT obligations that have not yet been met.

Contact us to Make a free, no obligation appointment or telephone (07) 4638 1155


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