JobKeeper Payment Scheme
The JobKeeper Payment (JKP) provides a wage subsidy to eligible employers, which importantly includes NFPs and charities, which have experienced a decline in turnover as a result of the COVID-19 pandemic. The JKP will help to offset the cost of ongoing employees and will encourage employers to maintain a connection with employees that have been stood down.
Under the JKP scheme, the employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged to receive the JKP.
NFPs (excluding charities) will be eligible for the JKP if, at the time of applying:
- they have an aggregated turnover of less than $1 billion (for income tax purposes) and they estimate their GST turnover has fallen or will likely decline by 30% or more; or
- they have an aggregated turnover of $1 billion or more (for income tax purposes) and they estimate their GST turnover has fallen or will decline by 50% or more.
Charities registered with the Australian Charities and Not-for-profits Commission (ACNC) will be eligible for the wage subsidy if they estimate their turnover has (or will likely) decline by 15% or more relative to a comparable period.
This lower turnover decline test (ie. 15%) does not apply to universities and non-government schools that are registered charities, which will remain subject to the turnover decline tests set out above for other not-for-profits.
Decline in Turnover
To establish that a NFP has faced (or is likely to) face the relevant decline in turnover, the test has been derived from the "GST turnover" rules, which is an amount typically reported on Business Activity Statements (BAS), with some modifications.
The "GST turnover" rules includes all taxable supplies and all GST free supplies, but not input taxed supplies. For consistency, NFPs who do not report through a BAS statement are required to use the same rules for calculating their turnover.
For registered charities, they may also include donations they have received (or are likely to receive) in their turnover for the purpose of determining if they have been adversely affected.
Where a NFP was not in operation a year ago, or where their turnover a year earlier was not representative of their usual (or average) turnover, the Commissioner has discretion to set out alternative tests that would establish eligibility in specific circumstances. Also, NFPs that have had a liquidator appointed are not eligible for this payment.
Eligible employees are employees who:
- were employed by the Employer at 1 March 2020;
- are currently employed by the eligible Employer (including those stood down or re-hired);
- are full-time, part-time, or long-term casuals (ie. casual employed on a regular basis for longer than 12 months as at 1 March 2020);
- are at least 16 years of age;
- are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder; or
- are not in receipt of a JKP from another employer.
Employees receiving Parental Leave Pay from Services Australia are not eligible for the JKP, however employees on parental leave from their employer will be eligible.
If your employees receive the JKP, this may affect their eligibility for payments from Services Australia (ie. Centrelink) and those employees will need to report their JKP as income.
To participate in the JKP scheme, employers must:
- Register an intention to apply on the Australian Taxation Office (ATO) website and assess that they have (or will likely) experience the required turnover decline (of 30% or 15%).
- Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired).
- Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). Employees who receive $1,500 per fortnight or more from their employer will continue to receive their regular income according to their prevailing workplace arrangements. For employees that have been receiving less than this amount, the employer will now need to pay them, at a minimum, $1,500 per fortnight before tax.
- Notify all eligible employees that they are receiving the JKP.
- Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
Process & Timing
The JKP wage subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May. Businesses and NFPs will be able to register their interest in participating in the JKP from 30 March 2020 on the ATO website (see ATO enrolment page here).
The ATO has now extended the time given to enrol for the initial JKP periods, from the original date of 30 April, until 31 May 2020. If eligible NFPs enrol by 31 May 2020, they will still be able to claim for the four fortnights in April and May, provided the NFP meets all of the eligibility requirements for each of those fortnights. This includes having paid eligible employees by the appropriate date for each fortnight.
For the first two fortnights (30 March - 12 April, 13 April - 26 April), the ATO will accept that eligible NFPs will now have until 8 May 2020 to pay the minimum payment of $3,000 gross wages.