JobKeeper Updates

Since the Government first introduced its $130 billion JobKeeper program, they have continued to release updates and clarifications. At first they seemed to be expanding both eligibility and flexibility, but now it appears that some of that may be being pulled back.

Whether you’ve already received payments under the scheme, or are anticipating receiving one, it’s important that you understand what your requirements are and how they may be changing.

Here are the most recent JobKeeper updates.

Subsidy Adjustments

On 11 May, Prime Minister Scott Morrison announced that the JobKeeper wage subsidy could be ‘adjusted’ in the future to provide more targeted support. The Treasury department is also considering retargeting the payment to specific industries, or even doing away with the flat rate $1,500 a fortnight (which sees some workers receiving more subsidy than their regular wages). The Labour Opposition has also indicated that it would support cutting the payment amount, if more Australians were made eligible in return.

While we don’t know what changes, if any, will be made, it makes sense to stay aware of any announcements the Government might make. With COVID-19 restrictions easing across Australia, adjustments wouldn’t come as too much of a surprise.

Early Winding Back

The Government will review the JobKeeper program at the end of June. As COVID-19 restrictions begin to ease, there’s a chance that the scheme could be wound up early. In fact, the PM says it was only meant as a temporary lifeline to help Australians through the worst of the crisis. And he believes it’s a lifeline that comes at a significant economic cost.

Additionally, the program was originally budgeted to cover six million employees, but only five million have applied. This lower than expected uptake could impact on a possible government decision to implement an early wind up.

Audits

The ATO has recently released guidance that advise that payments under the JobKeeper scheme will be audited. If you are receiving JobKeeper payments for your employees or as a sole trader it’s essential that you have confidence that your payments meet the decline in turnover test. If they don’t, you risk them being clawed back by the ATO and interest being charged on the amounts paid, at a rate of 7.89%.

The audits will also be looking to catch those businesses that are simply doing the wrong thing. Under anti-avoidance provisions, the ATO will look at businesses that:

defer making supplies, invoicing or receiving payments to achieve a decline in turnover for a particular period;
bring forward making supplies, invoicing or receiving payments to achieve a decline in turnover for a particular period;
transfer income-producing assets to achieve a decline in turnover for a particular period; or
have not been significantly affected by external environmental factors.

In other words, they’ll also be on the look-out for employers who receive the JobKeeper payments but don’t pass them on fully to their employees. In these cases not only will you be subjected to repayments with interest, but possibly with legal ramifications.

If you are a business that is at risk for being reviewed, it’s best to retain evidence that supports your decisions and your eligibility for JobKeeper payments. Contemporaneous evidence is generally more compelling so it’s a good idea to keep those records up to date for each period.

Full Time Students Under 17

The JobKeeper rules have been clarified to provide that full time students who are 17 years old and younger and who are not financially independent, are not eligible for the JobKeeper payments. This doesn’t change the rules for those that are financially independent as they’ll still require the security that JobKeeper can provide.

Monthly Reporting and Substantiation

It’s essential that if you receive (or will receive) a JobKeeper payment that you meet your monthly reporting requirements and maintain evidence to substantiate your position.

Monthly Reporting Requirements

Any entity that is entitled to a JobKeeper payment must complete a JobKeeper Declaration report within seven days of the end of each calendar month (in which a payment is received). You can make that via the Business Portal using your myGovID. Of course, your tax adviser can also help you make your monthly reports. You will need to include your current GST turnover for the month, as well as the projected turnover for the following month.

Substantiation

Employers that receive JobKeeper payments must keep records to substantiate the information that they provide to the ATO. If you don’t keep accurate records then you could lose your opportunity to receive JobKeeper payments. The ATO could also require that you return payments made, with interest.

We’re here to help if you need any additional information or advice based on your specific situation.

JobKeeper Updates