JobKeeper Payments Expanded to include Religious Practitioners

Generally, religious practitioners may not be classified as "employees" for tax purposes, and may receive financial support via non monetary benefits and/or a stipend, rather than salary and wages.

The eligibility rules for the JobKeeper Payment scheme have now been expanded to include religious institutions in respect of religious practitioners (with the exception of those that are students only) who are impacted by the COVID-19 pandemic.

What is a "Registered Religious Institution"?

A "registered religious institution" means an institution that is a registered charity and registered as a charity that is advancing religion under the Australian Charities and Not-for-profits Commission Act 2012.

Who is a "Religious Practitioner"?

A "religious practitioner" for the purposes of the JobKeeper Payment scheme is a minister of religion or a full-time member of a religious order.

The expanded eligibility requirements provide that individuals are eligible religious practitioners in a fortnight if they meet all of the following in that fortnight :

• They are not employed by the religious institution;
• They are a religious practitioner and they do activities or a series of activities in pursuit of their vocation as a religious practitioner, and as a member of the registered religious institution;
• They meet the 1 March 2020 requirements; and
• They meet the nomination requirements (explained below).

The eligibility requirements for religious practitioners are largely consistent with those for other employees (ie. the 1 March 2020 requirements), and we have explained these requirements in a previous Tax Alert – click here .

Payment Condition for Religious Institutions

A payment condition applies to an eligible religious institution concerning payments or benefits provided to a religious practitioner to qualify for the JobKeeper Payment scheme in respect of the religious practitioner.

The expanded rules provide that an eligible religious institution meets the payment condition in respect of an individual for a fortnight if it:

• Makes one or more payments to the individual from which an amount must be withheld (ie. PAYG withholding); or
• Provides a benefit to the individual whether that is a fringe benefit or an exempt benefit under the Fringe Benefits Tax Assessment Act 1986.

We understand that where a religious practitioner is normally paid a salary (and/or has expenses paid on their behalf by the religious institution, ie. fringe benefits) and they have assessed they are entitled to receive the JobKeeper Payment, they will meet the payment condition where they continue to receive a salary (and/or fringe benefits) to the value of $1,500 (gross) per fortnight.

We also note that where an institution usually pays religious practitioners for a regular period of more than a fortnight (such as monthly), then those payments are to be allocated to a fortnight or fortnights in a reasonable manner.

Special Nomination Notice

If you have enrolled or intend to enrol for the JobKeeper Payment, you need to complete the JobKeeper religious practitioner nomination notice ( click here ) to:

• Notify your eligible religious practitioners that you intend to participate in the scheme; and
• Confirm they agree to be nominated and receive payments from you as part of the scheme.

Both the registered religious institution and the nominated religious practitioner need to complete the form.   The completed form does not need to be sent to the ATO, however it should be kept as part of your tax records.

Please do not hesitate to contact your Lowe Lippmann Relationship Partner if you wish to discuss any of these matters further.