Federal Govt Provides Additional Clarification to JobKeeper Rules and Eligibility

There has been an overwhelming take-up of the Federal Government’s JobKeeper program, introduced to support businesses significantly affected by COVID-19 to help keep their employees employed.

To date, more than 900,000 businesses expressed interest in the JobKeeper payment and more than 400,000 business have enrolled for the scheme, covering around 2.4 M employees.

The Government has now introduced further clarification in relation to the JobKeeper eligibility rules and enrolment timeframe.

JobKeeper enrolment deadline now 31 May

The original deadline for enrolling in JobKeeper to access payments for the first 2 fortnights was 30 April, however the ATO has now extended the date for businesses to enrol and identify eligible employees to 31 May.

Employers will still need to ensure they have paid eligible employees by 8th May to be eligible for April JobKeeper payments for those first 2 fortnights.

Due to the sheer volume of businesses enrolling for JobKeeper, late enrolment may result in delays in receiving the funds from the ATO.

JobKeeper registration issues

The ATO requires businesses to reconfirm the eligibility of businesses and reported eligible employees each month.

The ATO website states “This is not a retest of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment scheme.”

For those simply nominating an eligible business participant (e.g., director, shareholder, partner, adult beneficiary), the ATO has fixed the bug in the enrolment process that would not allow an entity to enter ‘0’ employees.

Calculating Turnover Decline

The ATO has provided several methods for calculating a fall in turnover. Businesses can compare:

  • GST turnover for March 2020 against GST turnover for March 2019;
  • projected GST turnover for April 2020 against GST turnover for April 2019; or
  • projected GST turnover for the quarter starting April 2020 against GST turnover for the quarter starting April 2019.

On a practical note – when completing the registration form, if you are choosing the basis of a reduction in turnover for the June 2020 quarter, then you should select April as the turnover reduction month as it is the first month in that quarter.

Alternative JobKeeper Tests

Alternative tests for JobKeeper have been released for businesses that have different circumstances, including those that have restructured, or whose turnover had been impacted by drought or other natural disaster during the relevant comparison period.

The legislative instrument and the explanatory statement outline further details.

In the meantime, the ATO advises that if an entity is able to pass the basic turnover reduction test then they don’t need to consider the alternative tests (i.e., the alternative tests cannot make an entity ineligible for JobKeeper if they have already passed the basic test).

An alternative decline in turnover test will apply to special purpose employment entities such as service entities. In circumstances where an employment entity is utilised within a group of companies, and that employment entity is unable to demonstrate a sufficient decline in its own turnover, the employment entity will be able to refer to the decline in turnover of the operating entities it services. This should allow some special purpose service entities that provide employee labour to group members to access the JobKeeper scheme, although we are still waiting to see the detail of these new rules. See the Treasury fact sheet for more.

The alternative test will refer to the combined GST turnovers of the related group members using the services of the employer entity.

‘One In, All In’ Principle

The ATO has provided some guidance on the ‘one in, all in’ principle which is that employers who want to participate in JobKeeper cannot choose to only nominate some eligible employees and not others.

The ATO states that “The design of the JobKeeper scheme is that all eligible employees are paid the minimum of $1500 per fortnight and that the employer claims for each of these employees. Employers are not meant to pick and choose between their eligible employees.”

There was initially some confusion as to whether an employee was eligible for JobKeeper registration if their wage or salary was less than $1,500 per fortnight, but this has been resolved, with the ATO confirming that employees who are eligible and normally receive less than $1500 per fortnight should be paid at least $1500 per fortnight.

Future Updates to Come

The Government is continuing to work through the operational issues of the JobKeeper payment scheme, with Treasurer, the Hon Josh Frydenberg MP specifying additional rules being clarified:

  • charities and the treatment of government revenue
  • religious practitioners
  • international aid organisations, and
  • universities.

Treasurer Frydenberg’s media release also noted that banks have agreed to set up special hotlines to help businesses who need bridging finance to bridge the gap until the JobKeeper payments are reimbursed to employers, and also to bring JobKeeper-related applications to the “front of the queue” to accelerate the finance assessment process.

Additional Information

We’ll bring you more as it’s released. In the meantime, please let us know if you need assistance in navigating the changing rules or in registering to claim the JobKeeper payment or other stimulus payments.

Talk To
Neil Parker
Subscribe to our newsletter

Get informed about our business all the time, whatever you are. Read whenever you want.