JobKeer UPDATE operative provisions

UPDATE JOBKEEPER SUBSIDY PROGRAM

 

Some of you would have received a text message on your phones yesterday about 5:48 pm directly with the ATO with some updated information regarding the Jobkeeper subsidy.

 

So, we thought it would be good if we summarise and give you an updated view of how this program is likely to work.

The actual document is presented by the ATO on the following link: https://www.ato.gov.au/General/JobKeeper-Payment

 

The operation in broad details is as follows:

  • The scheme requires an initial registration with the ATO. The application for the scheme will start on the 20th April 2020 via online application.

Cant’ give you a link until that date, however would be important to receive updates directly from the ATO. You can subscribe to the updates here: https://www.ato.gov.au/Job-keeper-payment/

As soon as the registrations open we will notify you. You will be able to enrol or we will be able to do it for you.

 

  • You must check your eligibility as employer.Here is where the ATO has provided some additional information:
    1. Determine if you as employer are eligible – AKA the 30% drop in turnover test. / 15% drop in Turnover for ACNC registered Charities

There are three ways to determine the turnover test:

  • Compare your turnover in March 2020 to March 2019
  • Compare your projected turnover in April 2020 to April 2020
  • Compare your Projected turnover April to June 2020 to April to June 2019
  • An alternative test as approved by the ATO .

 

Few things to mention here:

  • The turnover is based on your GST Turnover. (regardless of your reporting cycle, monthly or quarterly)
  • You only need to meet the test ONCE, however you will have ongoing reporting requirements (not yet defined by the ATO)
  • If you do not qualify as at 30 March 2020, you can apply the tests above for any month or quarter, and once met you will be eligible for the subsidy from that fortnight onwards.

 

  • Determine eligibility of the employees.
    1. Permanent / part time employed by you at 01 March 2020
    2. Casual employees employed systematically for at least 12 months prior to 01 March 2020
    3. At least 16 years of age
    4. Australian permanent residents / Citizens
    5. Special visa holders

 

  • Your employees must be Nominated for the jobkeeper program
    1. Notify your employee that you are nominating them
    2. Employee must agree to the nomination by signing the JOBKEEPER EMPLOYEE NOMINATION NOTICE (form can be downloaded from this link:  https://www.ato.gov.au/Forms/JobKeeper-payment—employee-nomination-notice/
    3. This form is only for your records.
    4. This form is to be returned to the employer before the end of April 2020.

 

  • Payment must be made:
    1. Once you have determined the eligible employees and your eligibility as employer for the program, you NEED TO PAY the employees at least $1,500 per fortnight.
    2. Continue to pay them for as long as you continue claiming the subsidy or until the end of the program.
    3. Tax must be withheld as appropriate.

 

  • The employer will be required to process a Claim for the Jobkeeper Payment at the end of the month :
    1. Process claim via ATO portal , likely performed by us, tax agents.
    2. Report No. of eligible employees
    3. report to the ATO on an ongoing basis the number of employees, terminated employees etc.

 

  • Superannuation:

There seems to be some new rules being introduced by the government to not require super guarantee on the additional payments as a consequence of the Jobkeeper. However this is not finalised.

So, for the moment the position seems to be as follows:

 

– If your employee earns over $1500 per Fortnight, full super applies as normal.

– If your employee is receiving the payment but not performing any work, there is no requirement for super to be calculating on the amount to $1500.

– If your employee’s wages are less than the Jobkeeper, you only pay super on the actual portion related to the hours worked, any extra payment to reach $1500 is not subject to superannuation

 

Final Comments:

– All Jobkeeper payments are assessable income for the EMPLOYER

– No GST is applicable in this income

– The final details of the program are not yet released in full, the ATO is still fine-tuning the final details, so we will continue providing updates as they get released.

 

 

If you have any questions regarding the above, please call us and we will be happy to discuss further.

The Team at Kardia Group 

T: 07-33924900

 

 

 

LIABILITY LIMITED BY A SCHEME APPROVED UNDER PROFESSIONAL STANDARDS LEGISLATION.

 

 

SMSF Investment Strategy Update 2020

Just a quick reminder / update regarding SMSF.

 

As you would be aware, the ATO has recently released detailed guidelines on what the Investment strategy of the SMSF should consider.

 

With the financial year approaching fast, and under the current circumstances in the economic and health fronts, we thought it would be appropriate to remind you of this little issue well before the year end so you can take actions as required.

 

We attach the link in case you are interested.

https://www.ato.gov.au/super/self-managed-super-funds/investing/your-investment-strategy/

 

In summary, the guidelines require the investment strategy of the fund to be:

–  a lot more detailed with regards to the investment allocation, risk, funds ability to pay pensions and of course whether to hold insurance cover

– The old approach of investment ranges 0% to 100% is no longer a valid approach accepted by the ATO

– The fund’s investments must be in line with the investment strategy. Or a plan must be provided to either update the investment strategy or change the investment portfolio.

– Reviewed at least once in the financial year, this item is quite applicable after the significant events in March 2020 (Covid  19 pandemic)

– Investment strategies that do not comply with the guidelines may create contraventions raised by auditors which may lead to fines for trustees.

 

SMSF Auditors will be paying particular attention to this item in the 2020 financial year.

And the ATO has stated that auditors are required to raise a contravention if it meets the reporting criteria or if the issue has been raised in a previous year and continues to be unrectified in the current year.

 

Please feel free to contact us if you have any questions or concerns with regards to the above.

 

The Team at KARDIA GROUP, Business Advisors

 

Please note: The information provided does not represent financial advice. It is mere administration orientated.

JobKeeper Subsidy

Another development in the fight to keeps businesses afloat:

This time around, the government has released a subsidy program called the JOBKEEPER program.

This is mainly designed to assist employers / sole traders cover the costs of their wages.

Eligibility Criteria for small businesses just like yours:

– Turnover of less than $1 Billion per annum
– The turnover of your business is REDUCED BY MORE THAN 30% relative to a comparable period a year ago
(This period is at least a month )

Eligible employees:

– Full time / Part Time / long term  casuals / stood down employees
– Casual employees eligible if they have been with the employer on a regular basis for the previous 12 months as of 01 March 2020
– Employee Immigration status: Only those that are Australian citizens, Permanent resident visa holders, New Zealanders with 444 visa, special category visa holder residing in Australia continually for 10 years or more
– Re-engaged employees who were employed with the same employer on 01 March 2020
– SELF EMPLOYED individuals will be eligible to receive the jobseeker payment where their income has reduced over 30% compared to a prior year (period being at least one month)

The Process:

In order to receive the subsidy you must:
– elect to participate in the scheme by completing an expression of interest here https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper
– You will be required to :

  • provide supporting information to demonstrate the downturn on your business
  • Report the number of eligible employees employed by the business on a monthly basis going forward.

The Payment:

– Eligible employers will receive a payment of $1,500 per fortnight PER EMPLOYEE FOR UP TO 6 MONTHS
– The payment is the wages BEFORE Tax
– You are able to top up the payment to your employees
– You will receive these payments a month in arrears
– It will be up to you as employer if you want to pay superannuation on any additional wage paid because of the Jobseeker payment.

If you have any questions regarding the above, please contact us immediately
We will be glad to assist in these difficult times

The team at KARDIA GROUP