The JobKeeper legislation has now passed both houses of parliament, however, we are still in the dark regarding a number of questions our clients are desperately seeking answers to.
We will try and provide answers to these as and when we can. In the meantime, here is some information around what we do know so far.
The Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 establishes a framework to administer the Coronavirus economic response payments. Under the framework, the Treasurer will be able to make rules which provide for the Commissioner to make payments to eligible entities.
The matters the rules may deal with include some of the extremely pertinent questions we all have –such as the eligibility criteria for a payment; if or how an application for a payment may or must be made; and entitlement, amount and timing of the payments.
At this stage, there is no clear guidance as to when Treasury will make the rules available on its website. We understand that a number of our clients are looking for clarity around the eligibility criteria and the application of an alternative turnover test for businesses where there is no appropriate comparison period for the decline in turnover test.
I can assure you we will be monitoring this closely and will be sure to update you as soon as we have more information.
The Bill has provided information as to how the payments will be made, how overpayments will be handled and record keeping requirements, as well as the consequences of “contrived schemes”. Therefore, we can offer some advice on the following:
How payments will be made?
Payments will be made into your nominated financial institution account with the ATO. If no account has been nominated it will be paid into the account nominated in your most recent income tax return.
If you haven’t nominated an account, then the Commissioner is not obliged to pay the payment until you do so.
We recommend you check, either via your registered tax agent or directly with the ATO, that your correct bank account details are nominated to avoid any delay in receiving payments.
Contrived schemes and consequences
As per the ‘Boosting Cash Flow for Employers’ payment, the legislation has warned businesses against entering into a scheme that has the sole or dominant purpose of either making the entity entitled to a Coronavirus economic response payment or increasing the amount to which an entity is entitled to. If the Commissioner makes such a determination, the entity may no longer be entitled to the payments and may also face criminal charges and imprisonment of up to 10 years’.
Legislation has also been passed amending the Fair Work Act 2019 to support the practical operation of the JobKeeper scheme in Australian workplaces.
This does provide answers to some of our questions as follows:
Can I ask my employees to work whilst they are being paid the Job Keeper payments?
Yes, an employer may direct an employee to do any of the below, provided the Direction is safe, lawful and reasonably within the scope of the business’ operations:
- Undertake alternative duties
- Work at a different location
- Work on different days or at different times
Please use the link below to obtain the information provided by our Employment Lawyers regarding changes to the Fair Work Act 2009 for JobKeeper eligible employers.
We can also provide some payroll direction as follows:
Do I need to pay the superannuation guarantee on the JobKeeper payments?
No, you are not required to pay the superannuation guarantee on the JobKeeper payments you make to your employees in these circumstances:
- Where the payment is a top-up payment on wages below $1,500, superannuation is not payable on the top-up amount
- Where the employee has been stood down and is not performing work
Where an employee has performed work for their pay, superannuation guarantee is payable on the ordinary time earnings.
Does leave accrue on the JobKeeper payments?
No, however, leave should still be accrued whilst an employee is on stand down and on any ordinary hours worked.
Do I need to withhold tax on the JobKeeper payments and if so, at what rate?
Tax should be withheld at the usual marginal rates unless a withholding variation has been submitted by the employee.