With enrolments for the JobKeeper program now open, many practical questions are arising. We share here some of the common questions we are addressing for clients presently.
1. My Hotel turnover hasn’t dropped by 30% in March. If it does in April, will I be able to enrol for JobKeeper at a later time and make claims for the remainder of the program?
Initially, the announcements for JobKeeper suggested that you could opt in at any time throughout the 6-month period. Enrolment for JobKeeper opened on 20 April and the guidelines indicate enrolment must be completed by 30 April to ensure you receive JobKeeper payments as early as possible. However, the ATO indicates that enrolments are open until the end of May if you need more time. It is still unclear whether enrolment will be open for the remainder of the program or whether enrolments will not be allowed after the end of May. For hotels, the June quarter will be down by 30+% (unless you have very strong retail sales), we recommend you enrol before 30 April.
2. My Hotel isn’t currently registered for Single Touch Payroll (“STP”). How do I identify my employees for JobKeeper as part of the enrolment process?
The ATO has advised that it is still fine-tuning the JobKeeper enrolment and identification process for entities that are not registered for STP. They have indicated, however, that entities with less than 40 employees can manually enter each eligible employee for each JobKeeper fortnight by entering their tax file number and date of birth. As the identification of employees is not required until 4 May 2020, we expect further clarification before that date.
If you are in this position, please contact your Prosperity adviser to discuss this matter. We also have services available that can assist with STP being administered on your behalf which would solve the issue of manual reporting.
Eligibility – turnover drop
3. I have been able to identify a turnover drop of at least 30% but potentially my Hotel may return to more normal trading in the coming months. Do I cease to be eligible for JobKeeper once my turnover no longer drops by 30% or more?
No – you only have to establish your eligibility once and then you’re entitled to JobKeeper for the remainder of the program, even if your turnover doesn’t continue dropping by at least 30% in comparison to equivalent periods in 2019. Note that the Government has the power to close the JobKeeper Program prior to the end of the 6 month life of the Program.
4. My current Hotel turnover is significantly below my pre-COVID 19 expectations & projections, but still higher than the equivalent period in 2019 as my Hotel was only starting then. Are there any other turnover comparison methods available?
The JobKeeper Rules allow the Commissioner of Taxation to issue alternative decline in turnover tests by comparing to average monthly turnover of the past 11 (or less) months. All pubs should be able to rely on this provision unless continuing bottleshop turnover is more than 70% of trade and continuing (would not expect many of these cases).
5. I project my Hotel turnover to drop by more than 30% in comparison to the equivalent period in 2019, but the JobKeeper payments received from the Government might result in a net drop of below 30%. Does this exclude me from the program?
No – JobKeeper payments are not supplies for GST purposes and are therefore not included in turnover comparisons.
6. Can I pick & choose which employees I claim JobKeeper payments for (e.g., what if I don’t want to pay all my stood-down employees)?
No – all eligible employees must be covered as this is a “one in all in” program.
7. I hired a casual employee on 1 April 2019, so they are not an eligible employee for JobKeeper purposes on 1 March 2020 as they have not been a long-term casual for 12 months on that date. However, do they become eligible on 1 April 2020 when they reach the 12-month milestone?
No – there is only one 12-month testing time for long-term casuals on 1 March 2020. Long-term casuals cannot become eligible for JobKeeper payments if their 12-month anniversary happens after 1 March 2020 while the program is still running.
8. My payment fortnights do not align exactly with the JobKeeper fortnights. Do I need to apportion my claims in the first and/or last fortnight?
No – as long as a payment of at least $1,500 is made in a JobKeeper fortnight, you will be eligible for a claim for that JobKeeper fortnight even if the period covered by the payment doesn’t entirely align with the JobKeeper fortnight.
For example, assume your fortnight runs from 27 March to 9 April and you made a payment in arrears on 9 April. The first JobKeeper fortnight runs from 30 March to 12 April. Even though the payment relates to a number of days prior to the start of the JobKeeper fortnight, as the payment was made in the JobKeeper fortnight, it is eligible for a JobKeeper claim by the employer.
9. My Hotel is fully shut down due to COVID-19, has no income and all employees are stood-down. As I am incurring administration costs in processing payment to employees and claiming JobKeeper, can I hold back a reasonable administration fee from payments to employees?
No – you must pay at least $1,500 to each employee per fortnight. It is illegal to hold back any amounts for administration fees, even if the amounts are reasonable.
As you will appreciate, the JobKeeper program is complex and many issues are emerging on a daily basis. Please get in touch with Steve Gagel to assist you through the enrolment and claims process.