Blog

Dear valued clients and friends of Yield.

We hope that you and your family are well.

The Federal Government has last week released its key updates for JobKeeper V2.

This email is to update you about what you need to do to continue to claim the JobKeeper payments or start to receive JobKeeper payments from 28 September 2020.

Our services and advice are very important to you in 2 key ways.

1.  We will assist you to claim the maximum amount available.
2. We will give you the peace of mind that your JobKeeper application and declarations are correct, avoiding any ATO fines and penalties for incorrect declarations and lodgements.

JOBKEEPER V2 OVERVIEW

All employers wanting to claim JobKeeper payments from 28 September 2020 will need to reassess their eligibility and prove that their turnover has declined based on actual figures.

Some businesses that did not qualify for the original JobKeeper payments may find that they now qualify for the new JobKeeper payments.

The JobKeeper scheme has been extended from 28 September 2020 until 28 March 2021.

There are two separate extension periods. For each extension period, an additional actual decline in turnover test applies and the rate of the JobKeeper payment is different.

The extension periods are:

• Extension 1: from 28 September 2020 to 3 January 2021
• Extension 2: from 4 January 2021 to 28 March 2021

Business Eligibility

All businesses wanting to receive JobKeeper V2 will need to reassess their eligibility. You will need to demonstrate that your ACTUAL GST turnover (as reported on your Business Activity Statement) for the September 2020 quarter has decreased by the relevant amount, when compared to the September 2019 quarter and then similarly for the December 2020 quarter when compared with the December 2019 quarter.

The decline in turnover test remains the same as the existing rules, being:

•  Entities with turnover greater than $1 billion – 50%.
• Entities with turnover less than $1 billion – 30%.
• ACNC registered charities (excluding schools and universities) – 15%.

We anticipate alternative turnover tests may become available in some circumstances including where businesses commenced trading after 1 July 2019, where there may be no corresponding period in the prior year. We will communicate details of these measures when issued by the ATO.

Payment Rates

The rate of the JobKeeper V2 payment in each extension will depend on the number of hours:

•  an eligible employee works; or
• an eligible business participant is actively engaged in the business.

It will be split into 2 rates:

Tier 1 Rate 

Applies to:

• Eligible employees who worked 80 hours or more in the 4 weeks of pay period before either 1 March 2020 or 1 July 2020, and
• Eligibile business participants who were actively engaged in the business for 80 hours or more in February 2020.

The rates are:

• $1,200 per fortnight, 28 September 2020 to 3 January 2021
• $1,000 per fortnight: 4 January 2021 to 28 March 2021

Tier 2 Rate 

Applies to:

• Any other eligible employees and eligible business participants

The rates are:

• $750 per fortnight: 28 September 2020 to 3 January 2021
• $650 per fortnight: 4 January 2021 to 28 March 2021

Employers and businesses will need to nominate the rate they are claiming for each eligible employee or eligible business participant.

Furthermore the ATO have indicated that employee declarations may be required to substantiate the hours worked during the relevant periods however details have not yet been provided by the ATO.

Note that you have until 31 October 2020 to meet the wage condition for fortnights ending in October for all your eligible employees.

Eligible Employees

The existing employee eligibility requirements have not changed except for the eligibility date of 1 July 2020 (previously 1 March 2020), and are as follows:

• currently employed and were employed by the employer at 1 July 2020;
• full time, part time, or long term casuals;
• at least 18 years of age or aged 16 to 17 years and independent or not undertaking full time study;
• an Australian resident; and
• not in receipt of a JobKeeper payment from another employer.

Eligible Business Participants

Sole traders and some other entities (such as partnerships, trusts or companies) may be entitled to the JobKeeper Payment scheme under the business participation entitlement. A limit applies of one JobKeeper payment per fortnight for one eligible business participant. Sole traders, one partner in a partnership, one beneficiary of a trust, and one director or shareholder of a company may be regarded as an eligible business participant.

WHAT HAS NOT CHANGED

To claim for fortnights in the JobKeeper extension 1 or 2:

•  You don’t need to re-enrol for the JobKeeper extension if you are already enrolled for JobKeeper for fortnights before 28 September 2020.
• You don’t need to reassess employee eligibility or ask employees to agree to be nominated by you as their eligible employer if you are already claiming for them before 28 September 2020.
• You don’t need to meet any further requirements if you are claiming for an eligible business participant, other than those that applied from the start of JobKeeper relating to:
  • holding an ABN, and
  • declaring assessable income and supplies.

OBLIGATIONS + RISKS FOR YOU

If a wrong claim is made or if the ATO in the future decides that you were ineligible to receive the JobKeeper payment, the ATO will require you to repay them any JobKeeper payments that you have received plus penalties and interest.

The key risks to you as the employer include:

1.  The employer certifies the facts provided to the ATO and the JobKeeper claim made.
2. The employer receives significant JobKeeper payments over a 6 month period.
3. If the employer makes a mistake and is found to be ineligible by the ATO (for example, its turnover is not down by 30%), then they may have to repay all amounts received back to the ATO.
4. An employee ceases to be eligible if they cease employment during the life of this JobKeeper scheme.

Note the ATO requires you to keep all records in relation to your JobKeeper claim for a 5 year period.

OUR WORK PLAN TO ASSIST YOU

The ATO has specific actions that must take place within tight time frames for an employer to receive the JobKeeper payments.

These are the actions that we can assist you with:

Employer Eligibility Assessment – Extension 1 and Extension 2

• Document the fall in turnover % for 2020 quarter compared to 2019 quarter in case of future ATO audit.

Payment Rate Assessment

• Work out if the Tier 1 or Tier 2 rate applies to each of your eligible employees and/or eligible business participants.
• Notifying the ATO and your eligible employees and/or eligible business participants what payment rates applies to them.

Ongoing Work

• During each JobKeeper extension, ensuring your eligible employees are paid the right rate according to their tier.
• Ensure your payroll software is correctly set up to record JobKeeper “top up” payments if needed.

Monthly JobKeeper Declaration Report – Due by 7th day of each month

• Using ATO online services, report to the ATO using their Monthly JobKeeper Declaration Report on the following:
  • Input required ATO declaration items
  • Notify if any eligible employees have changed or left your employment.

OUR ENGAGEMENT

We fully understand that times are tough at the moment, and like your business, our team’s wages need to be paid as well as our other operating costs, hence there will be a fee associated with our Jobkeeper work.

If you have already engaged Yield to administer the Jobkeeper program for your business the same monthly fee that is currently charged by Yield will continue to be charged for work undertaken for Jobkeeper V2. The monthly fee will only be payable for the month’s you receive Jobkeeper payments..

If you are new to the Jobkeeper program and wish to engage Yield to undertake the work plan as detailed above, please be in touch so that we can provide you with a copy of our Jobkeeper fee schedule and to discuss how it would apply to your business.

As mentioned previously, the Jobkeeper program has placed an enormous amount of pressure on Yield’s resources along with every other accounting firm’s. We did not ask for this additional work and don’t particularly want to profit from it, hence we have provided as much information in this and prior Jobkeeper emails, so clients who wish to, may take care of these processes themselves. We are however offering to complete the work for those wishing to engage with us for our assistance.

NEXT STEPS

You have limited time to test your eligibility for JobKeeper V2 (starting on 28 September  2020) and to meet the various compliance requirements associated with the program.

Given you will need to demonstrate that your actual GST turnover for the September 2020 quarter has decreased by 30% when compared to the corresponding period in the prior year, it is imperative that your accounting records are reconciled and up to date as soon as practicable after 30 September 2020 to assist in determining your eligibility.

If you are an existing Jobkeeper recipient and Yield is administering the program for your business, we will assess your eligibility for Jobkeeper V2 when completing your September 2020 monthly declaration report and will be in touch soon after to discuss our findings.

If you are not an existing Jobkeeper participant however feel you may be eligible for Jobkeeper V2 and would like to engage Yield to access your eligibility and if eligible, administer the Jobkeeper program for your business, please contact us to discuss the matter as soon as possible.

If you are administering the Jobkeeper program yourself, you will need to act quickly to assess eligibility for Jobkeeper V2, determine which  employees are eligible, which tiers apply to which employees, obtain the necessary declarations, make the minimum payments to the eligible employees.by the due dates and to lodge your monthly declarations on time.

Either way remember we are here to help, so please be in touch if you have any queries or require our assistance to ensure you receive your full entitlements under the Jobkeeper program.

For comprehensive information on all aspects of the Jobkeeper program including the Jobkeeper V2 extension program please refer to the various Jobkeeper guides that can be found here on the ATO website.

We look forward to hearing from you soon.

Kind regards