Strategies and advice for businesses to stay in control through COVID-19 and get ahead of the pack

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COVID-19 Business Continuity – 8th April

Hi, it’s Ashley Thomson with the COVID-19 Business Continuity update for Wednesday, 8th April. Today federal parliament has passed the new JobKeeper legislation.

In today’s briefing:

1. Detailed answers to important JobKeeper questions

  • Timing of JobKeeper
  • JobKeeper payments
  • Business eligibility for JobKeeper
  • JobKeeper subsidies for business owners
  • Complex employee scenarios

2. Working parents
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1. Detailed answers to important JobKeeper questions

I have included the screen snaps from the JobKeeper Frequently Asked Questions Fact Sheet from the Australian Treasury website so that you can see the exact information from the government.

One of the key points to be aware of with JobKeeper is that it is a wage subsidy. That means its purpose is to assist you with the wages you have paid your employees.

A simple way to think of it is as a reimbursement of $1,500 per eligible employee per fortnight.

Remember that you are only eligible to receive it if your revenue has dropped or will drop by 30% or more, see here:

Is my business eligible for JobKeeper scheme?

The fact sheet goes into a lot of detail and I encourage you to read it yourself. For the purpose of this briefing, I’m focusing on the information that is relevant to Tenfold clients. I’ve pasted in the extract from the fact sheet and included some perspective and commentary.

As you will see, there are still several grey areas. The comments made here are for your consideration; I’d still expect that you and your coach will look at each topic and work out how it could apply to your business, and consider what further advice or information you need before making any hard and fast decisions.

Timing of JobKeeper payments

 

What are the eligible payment periods for JobKeeper reimbursement?

JobKeeper eligible pay periods

As I mentioned earlier, as far as we understand based on the information released to date, you’ll need to have paid each staff member the minimum of $1,500 (before tax) for the pay period 30th March to 12th April.

We take this information to mean that it is likely that you will be reimbursed for wages you actually paid in that pay period.
To continue to receive the reimbursements, you’ll have to continue to pay employees.

The ATO will know who you’ve paid and how much from the information that you submit through Single Touch Payroll and they’ll use that information to calculate the amount of the wage subsidies you will be reimbursed.

The first payments from the ATO will be received by employers in the first week of May. After that, the reimbursements will be paid monthly in arrears.

There are two periods before the first reimbursement: first pay period is 30 March – 12 April, second pay period is 13 April – 26 April.

 

JobKeeper for Employees

 

How do I work out which employees are eligible employees?

JobKeeper eligible employees

One of the key points I see here is that to be eligible, an employee is to be currently employed, which means they are getting paid by you.

 

What if I pay my employees less than $1500 per fortnight before tax?

JobKeeper pay less 1500

One way to interpret this is that you can pay an employee their regular wage of less than $1,500 but you won’t get any subsidy for it.

For example: Your part time employee Chris gets a regular fortnightly wage of $1,200. The pay period of 30th March – 12th April is coming up.

JobKeeper employee payment example

In scenario A, you’d pay out less now but you get nothing back from JobKeeper for Chris because the amount of his pay wouldn’t meet the eligibility criteria. (All amounts are before tax)

In scenario B, you’d pay out a bit more than you normally would in April, and you’d then get reimbursed in May.

Important points to note about scenario A:

  1. You can still be eligible for a JobKeeper payment for Chris after you’ve paid him the lower amount if you make a “top up” payment to bring his wage up to $1,500 per fortnight. (The ATO will hopefully provide instructions on how this will work =.)
  2. It is our understanding of the information that any other employees that you did pay the minimum of $1,500 would be eligible for you to receive JobKeeper reimbursement for their wages.

 

Am I required to pay PAGW and superannuation on the JobKeeper payment?

JobKeeper superannuation

Let’s look back quickly at the earlier scenario with Chris and his regular fortnightly wage of $1,200. To be eligible for JobKeeper payment for Chris, you’ll have to top up his pay by $300 a fortnight to meet the minimum of $1,500. As we understand it, you’ll still have to make the usual super contributions on Chris’ regular wage of $1,200 but you won’t have to pay super on the additional $300.

 

Can I back pay stood down employees?

JobKeeper stood down back pay

It’s not completely clear but it could be inferred that you don’t have to back pay them for the time they were stood down between 2nd March – 29th March – e.g. if you stood down an employee on 23rd March due to the government mandated shut down of gyms, playcentres, etc, you may only be required to back pay them for the period 30th March onwards. This is a grey area so look to get clarification on this before making a decision and communicating with your employee.

 

Business eligibility for JobKeeper scheme

 

How can I self-assess that my turnover has fallen 30%?

JobKeeper assess turnover decline

 

Can my business apply for JobKeeper if my turnover declines later?

JobKeeper delay turnover decline

The key point to note here is that you can apply when you “reasonably expect” that your turnover will decrease by the required 30%.

Another point I want you to note is where the advice states, “JobKeeper payment is not backdated to the commencement of the scheme”. While it isn’t stated explicitly, it could be reasonable to think that JobKeeper payments will be paid to late entrants from the time they enter the scheme.  For example, if your revenue doesn’t meet the decrease test of 30% until May, it’s possible (but not yet confirmed) that you’ll be reimbursed for wages you paid in May, assuming your employees were eligible (and one of the main criteria is that your employees were paid the minimum of $1,500 per employee per fortnight.)

This could be quite complicated so your coach will be keeping a close eye on your revenue and sales pipeline and your financial model.

How is the government going to ensure companies don’t manipulate their turnover to ensure they qualify for JobKeeper?

JobKeeper integrity

 

 

JobKeeper Subsidies for Business Owners

Here are some of the clarifications regarding whether business owners themselves qualify for the JobKeeper subsidy.  This depends on whether you take wages, a distribution, are part of a partnership or you operate through a trust structure.

 

I am paid as a shareholder. Am I eligible?

JobKeeper for director or shareholder

This seems to indicate that business owners who receive distributions rather than wages will be eligible for one Jobkeeper payment.

 

I am self-employed. Am I eligible for the JobKeeper payment?

JobKeeper self employed

 

My business is a partnership. Can each partner get JobKeeper?

JobKeeper partnership

 

Can trusts receive the JobKeeper payment?

JobKeeper for trusts

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Complex Employee Scenarios under JobKeeper scheme

 

Can my business get JobKeeper and apprentice subsidy?

JobKeeper for apprentice

 

Can my business get JobKeeper for employees on Workcover?

JobKeeper for employees on workcover

WorkCover is often a complex matter that needs to be handled carefully. Please speak with your coach if you have any questions and we can direct you to professional specialist advice as required.

Do employees with multiple employers get multiple JobKeeper payments?

JobKeeper employee with multiple employers

This question relates to employees who have two or more jobs with different employers.  In this case, it seems that the employee needs to nominate whether you are their primary employer and therefore whether you can receive the subsidy on their behalf.

The full list of questions and clarifying answers can be found here: Fact Sheet: JobKeeper Frequently Asked Questions 

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2. Working parents

The state government announced yesterday that students will not return to school in term 2 (and maybe beyond), instead they will be required to study from home. In many businesses, some of your employees will be the primary caregiver for their kids. In these cases, it’s highly likely that the requirement to home school their children will impact on their work arrangements and their ability to perform their role.

I suggest you speak with your Tenfold Business Coaching expert and think about how you can coordinate your team and resources to manage this complicated situation.

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There’s a lot to digest in today’s briefing. Please reach out to your coach or me if you have any questions – we’re here for you.

Ash

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