COVID-19 stimulus package update - JobKeeper Payment and other measures Rahul Singh Technical Services Manager Challenger l - Accurium
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
COVID-19 stimulus package update
JobKeeper Payment and other measures
Rahul Singh Doug McBirnie
Technical Services Manager General Manager
Challenger l Accurium
Job Keeper payment
What is it?
Legislated on 8th April
Still waiting for final Regulation with all the details
Starting from 30 March 2020 and ending on 27 September 2020
Wage subsidy for eligible employers in respect of eligible employees and self-employed
Payment of $1,500 per fortnight to be paid by ATO to employer in arrears to subsidise
employment costs
3
JobKeeper payment
Eligible employers
Turnover less Turnover $1 Charities and Not
than $1 billion billion or more for Profits*
Turnover reduced or Turnover reduced or Turnover reduced or
likely to reduce by ≥ likely to reduce by ≥ likely to reduce by ≥
30% 50% 15%
* Certain universities and non-government schools have to meet the turnover reduction test based on 30% or 50% threshold
Entities liable for Major Bank Levy are ineligible 4
Insolvent on in liquidation entities also ineligible
JobKeeper payment
Turnover
Turnover has or will likely fall in the relevant month or quarter (depending on Business Activity
Statement reporting period) relative to turnover in a corresponding period a year earlier
Turnover is calculated as it is for GST purposes and includes all taxable supplies and all GST free supplies
but not input taxed supplies
Commissioner discretion can be applied where business not in operation for 12 months or prior turnover
not representative of usual turnover
Some tolerance from the Commissioner where employers, in good faith, estimate a 30 per cent or more
or 50 per cent or more fall in turnover but actually experience a slightly smaller fall
Reduction of turnover in consolidated groups will apply to each business in the group
5JobKeeper payment
Ineligible employers
Australian Government
and its agencies
May have
State & Territory
Government and its their own
agencies wage subsidy Government employees
measures
Local Government and its
agencies
Foreign Government and
its agencies
Employers who don’t meet Employers who don’t claim Employers liable for Bank
turnover reduction test JobKeeper Payment Levy
6Job Keeper payment
Need to pay a minimum of $1,500 per fortnight to employees
Minimum of $1,500 per fortnight needs to be paid to employee with JobKeeper paid monthly in arrears
Can be paid by a combination of:
Gross salary, wages, commissions, bonus, allowances
Salary sacrifice
Other amounts agreed with the employee
7JobKeeper payment
Eligible employees
Currently employed by the eligible employer (including those stood down or re-hired)
Were employed by the employer at 1 March 2020
Are full-time, part-time, or long-term casuals (a casual employed on a regular and systemic basis for
longer than 12 months as at 1 March 2020)
Are at least 16 years of age at 1 March 2020
Are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa
Holder at 1 March 2020
Were a resident for Australian tax purposes on 1 March 2020; and
Are not in receipt of a JobKeeper Payment from another employer.
8JobKeeper payment
Ineligible employees
Employer doesn’t claim JobKeeper payment
Temporary visa holders
Casuals NOT employed on a regular and systemic basis for longer than 12 months as at 1 March 2020
Terminated / redundant before 1 March 2020 and not rehired OR terminated / redundant on or after 1
March 2020
- Different to being “stood down”
Receiving Paid Parental Leave from Services Australia
On Worker’s compensation and not working
Government employees
- May have wage subsidy provided by the relevant Government
9JobKeeper payment
Flow of funds
First payment starts in first week of
ATO May
Monthly in arrears
Reflects payment made to
employee through STP
Employer
Notify employee that employer
is receiving
Notify ATO monthly of turnover Employee
Need to be paid minimum of $1,500 per
reduction test met fortnight
10JobKeeper payment
Example
Real estate business with two
employees
Full time employee earning $3,000 per fn Part time employee earning $1,000 per fn
‒ Gets paid $1,000 per fortnight by employer
‒ Gets paid $3,000 per fortnight by employer
‒ Gets paid an additional $500 per fortnight by
‒ Employer gets $1,500 from JobKeeper Payment employer
to subsidise the cost of employee
‒ Employer gets $1,500 from JobKeeper Payment to
subsidise the cost of employee
11JobKeeper payment
Eligibility criteria for sole traders
Turnover has or will fall by by 30% or more
Had an ABN on or before 12 March 2020 and either:
- Had assessable income for 2018-19 FY and included in their lodged tax return by 12 March 2020 (unless time
extended by Commissioner)
- Made a supply during 1 July 2018 to 12 March 2020 and provided this information to the Commissioner on or before
12 March 2020 (unless time extended by the Commissioner);
Actively engaged in the business
At least 16 years of age at 1 March 2020
An Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020 &
Australian tax resident
Not entitled to JobKeeper Payment from another payer. 12JobKeeper payment
Not employee or a sole trader but carry on a business through an entity
Partners
- One partner can be nominated
Trusts
- One beneficiary can be nominated
Companies
- One director can be nominated if directors are solely being paid through director fees
- One shareholder can be nominated if shareholders are solely being remunerated
through dividends
Share traders and property owner carrying on a business
- Potentially 13JobSeeker Payment and
Coronavirus Supplement
14Payment rate comparison
JobSeeker including $550 Coronavirus Supplement^
Situation Fortnightly Energy Supplement Coronavirus Total if also eligible
payment per fortnight Supplement per for Coronavirus
fortnight Supplement*
Single $565.70 $8.80 $1,124.50
Single with at least $612 $9.50 $1,171.50
$550
one child
Partnered (each) $510.80 $7.90 $1,068.70
JobKeeper ($1,500 per fortnight) delivers greater monetary benefits, however need to be
employed or self-employed.
Business entities distributing passive income may only have one person eligible.
^^ Coronavirus Supplement payable from 27 April 2020 for maximum of six months
* May be higher if a person is a non-homeowner and also eligible for Rent Assistance. 15JobKeeper and JobSeeker Payment
JobKeeper JobSeeker
Asset test relaxed but still
Non means tested
income tested
Employees need to be on
Employees not on the
the books of the employer
books of the employer will
on 1 March and
need to consider JobSeeker
continuously since
JobKeeper payments are
Eligible sole traders could
assessable income for
pick and choose but would
JobSeeker so for most
generally be better off
people will cancel
under JobKeeper
JobSeeker
Partnerships, trusts and
Partnerships, trusts &
companies where
companies where
individuals only receive
individuals only receive
passive income – only one
person eligible
passive income – anyone
not receiving JobKeeper 16
may consider JobSeekerRelaxed eligibility for relevant income support
Relaxed rules enhancing eligibility
For Jobseeker Payment
- Assets Test
- Definition of ‘unemployed’
- Liquid of ‘unemployed’
- Ordinary waiting period
- Newly arrived resident’s waiting period
- Seasonal worker preclusion periods
Mutual obligations requirement changes
Income Maintenance Period (IMP) and Compensation Preclusion Periods still apply
17Relaxed eligibility for relevant income support
Relaxation on definition of unemployment
For Jobseeker Payment, a person can be considered unemployed if
For sole traders and self-employed: business was suspended, or suffered a reduction in turnover, as a result of the
adverse economic effects of the coronavirus
The person’s working hours were reduced (including to zero) as a result of the adverse economic effects of the
coronavirus
Person is in self-isolation as a result of advice of a Government body or a health professional regarding the
coronavirus and the person’s working hours were reduced (including to zero)
Secretary may require employees to use leave entitlements but someone on leave without pay could be considered to
be unemployed
18Jobseeker income test
Income test
Single and not a principal carer
$104 to $254 per fortnight 50 cents reduction
Above $254 per fortnight 60 cents reduction
No entitlement at $1,086.50 per fortnight
19JobSeeker income test
Income test
Partnered – personal income test
$104 to $254 per fortnight 50 cents reduction
Above $254 per fortnight 60 cents reduction
No entitlement at $993.50 per fortnight
But also take into account partner’s income
Partner’s income until 26 April 2020 From 27 April 2020
Partner’s income $993.50 No impact No impact
For each $ > $993.50 per fortnight 60 cents reduction 25 cents reduction
No entitlements at $1,858 per $3,068.80 per fortnight
fortnight
20Who may not be eligible for JobKeeper but may be
eligible for JobSeeker?
Employer doesn’t claim JobKeeper payment
Casuals NOT employed on a regular and systemic basis for longer than 12 months as at 1 March
2020
Terminated / redundant before 1 March 2020 and not rehired or terminated / redundant on or after
1 March 2020
- May have an income maintenance period
Receiving Paid Parental Leave from Services Australia
On Worker’s compensation and not working
- Although may have compensation preclusion period
Government employees if not covered by the relevant government’s wage subsidy measure
21Who may not be eligible for both JobKeeper and
JobSeeker?
Received substantial termination payments from employers such as redundancy and
leave entitlements due to Income Maintenance Period
No longer an employee and partner’s income in excess of the allowable income
Employer doesn’t claim or is not eligible for JobKeeper, employee ‘stood down’ and
partner’s income affects JobSeeker eligibility
22Other FAQ
23Temporary early access to superannuation
New condition of release enabling $10,000 release from super
Can withdraw from multiple accounts to make up $10,000
Only one application can be made per financial year until the closing period of 24 September 2020
Be careful if full requested amount could not be released. For example insurance premiums or market volatility
- Cannot do a subsequent application to top up
2-3 days for ATO to confirm status of application
For TRIS (TtR) balances, consider commuting the intended withdrawal amount back to accumulation
Monitor issues for
- Personal deductible super contributions and Notice of Intent
- Insurances in the fund including $6,000 threshold and being inactive
24Updating of account based pension balances - ABP
Services Australia proactively updating ABP balances
Usually, ABP balances are automatically updated in February and August by Services Australia / DVA
Services Australia has engaged providers to provide out of cycle updated account balances for ABPs and TAPs
Most product providers providing data files
Consider
- Checking with the fund whether they are going to provide updated balances to Services Australia
- Client should then receive correct entitlement based on updated account balances
- Consider updating managed funds / listed securities / cash
25Contact us
The information in this presentation has been prepared by Accurium Pty Ltd ABN 13 009 492 219 (Accurium). It is general information only and is not intended to be financial product advice,
tax advice or legal advice and should not be relied upon as such. Whilst all care is taken in the preparation of this presentation, no warranty is given with respect to the information provided
and Accurium is not liable for any loss arising from reliance on this information. Scenarios, examples and comparisons are shown for illustrative purposes only and should not be relied on by
individuals when they make investment decisions. We recommend that individuals seek professional advice before making any financial decisions. This presentation was accompanied by an
oral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author.
26You can also read
