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not for profit

Understanding the JobKeeper Payment scheme

Too many questions on hand

Applications for the Federal Government’s JobKeeper wage subsidy scheme opened on Monday 20 April – there is now A LOT of information available on the ATO website so we won’t re-create that all here.

What we will do is clarify a few questions that we’ve been hearing frequently from our NFP clients.

Woman calculating the GST tunrover

How does the “turnover test” work?

Once the organisation has achieved the basic eligibility criteria, the turnover test is the key to not only being eligible, but from which period you can claim payments.

Organisations choose a test period – any single month from March to September 2020, or the quarter ending June or September – which is compared to the same period in 2019. And of course, you can test all of those options, then pick the one that works best for your organisation. If you can demonstrate the required decline in turnover, then you are eligible for the JobKeeper Payment for fortnightly cycles that start on or after your chosen month.

Unfortunately, the calculation is not as simple as running a Profit & Loss report – the test must use GST turnover as prescribed in the GST Act, but with specific modifications for JobKeeper purposes, including donations received by charities.

Australian currency with calculator

Can everyone get payments for April?

In order to claim payments from the beginning of the scheme on 30 March, you must be able to demonstrate the decline in turnover for March, April or the June quarter.

If you don’t meet the test in one of those periods, but you are feeling the effects on your income and activities, we recommend giving careful thought to your forecast of the coming months. If you forecast the required decline in a future period (through to September 2020), you can enrol by the end of May and claim payments for the relevant period.

Given that the details and processes have only been published since 17 April and are still changing daily, the ATO will accept a top up” pay by 30 April to ensure that all your eligible employees have been paid a minimum of $1500/fortnight for the first two JobKeeper fortnights.

What is a JobKeeper fortnight?

These are fortnightly periods that form the cut-off dates for claiming payments. Any payroll payments that you make within a JobKeeper fortnight can be claimed (once enrolled) – the key is the payment date, not the pay period dates. There’s no need to realign your pay periods to match the JobKeeper fortnights.

Woman working in a boutique

What about staff who usually earn less than $1500/fortnight?

Employers must pay a minimum of $1500 per fortnight to eligible employees – no matter how few hours they work. We’ve heard from a number of employers who feel unsure about this concept, but it is entirely consistent with the rules of the scheme. It may be possible to vary the hours of staff under the circumstances – check Fair Work for information.

You may not choose to exclude particular employees – the scheme obliges employers that qualify and opt in, to claim and pass on the JobKeeper Payment for all eligible employees.

What if I have stood down staff or made people redundant?

Staff on payroll at 1 March are eligible for JobKeeper. If they had been terminated, you may re-engage them. Employees don’t need to actually work any hours to be eligible for the subsidy, for example, if an organisation is unable to do its usual work because of the coronavirus restrictions.

Please note that the JobKeeper Payment for re-engaged employees is only available from the fortnight terminated employees were re-engaged. You cannot claim retrospectively for employees you re-engage.

Man using his laptop for online application

How do I apply?

Apply via ATO Online Services if you are an authorised contact for your organisation, using your MyGovID. You can also engage a registered BAS or Tax Agent to manage JobKeeper on your behalf.

You will need to state the period that you have met the decline in turnover test and the number of employees that you expect to claim for, along with a bank account and contact person details. You must have completed the employee nomination process before enrolling.

Reporting to the ATO - can I be cut off?

No. The legislation is clear that you need only pass the turnover test once – there is no need to prove eligibility again. The scheme does require you to report your actual turnover for the month along with a forecast for the coming month. The ATO says the reporting will provide data on whether the JobKeeper scheme is improving. You must advise the ATO if anything changes with your nominated employees or your business that make either ineligible.

The ATO really doesn’t want to see organisations manipulating financial information or employment arrangements to manufacture eligibility for the scheme. As they say in the nomination form: penalties apply for making a false or misleading statement.

Woman talking on her mobile while using her laptop

We’re here to help

During this challenging time, we understand the need for extra support. It is confusing – Accounting For Good has applied many brains to the problem and the JobKeeper scheme has been a constant topic of discussion. Our team of NFP accounting specialists is available to guide you through the JobKeeper Payment process.

We are working from home, but it’s still business as usual. All our tools are online and we are more than happy to arrange video conferences or phone meetings when you need.

If you have any questions about the JobKeeper Payment or other government stimulus package, please contact us today.

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