The March introduction of the Federal Government’s JobKeeper Payment was initially met with confusion by employers and employees, but has since proven to be a lifeline for many businesses.

More than a million casual workers were excluded from the scheme, that was originally forecast to cost $130 billion but has now been revised down to $70 billion before payments are due to cease on September 27. The wage subsidy pays employers a $1,500 a fortnight wage subsidy to eligible employees including some long-term casuals but excludes short-term casuals (less than 12 months employment) and temporary residents.

The government’s decision to extend the JobKeeper rules to include those employed through a grouped special purpose entity, rather than as originally prescribed testing each employer on a stand-alone basis, was a sensible solution. Special treatment was also allowed by the ATO for service entities that, while not actually forming a group for tax purposes, operated in conjunction with a related operated entity by supplying them with staff, which is quite a common arrangement.

Another key feature that has been confirmed by the government was the “one in, all in” principle under which employers cannot select which eligible employees will participate in the scheme. Further clarification was obtained by the release of “alternative turnover testing” methods to allow for unusual situations such as where entities have started or ceased a business within the last 12 months, or have turnover that is irregular and makes the basic 12 month turnover comparison impractical and unreasonable, offering many more businesses access to the scheme.

Now that JobKeeper is live, some key considerations going forward are:

  • Employers who didn’t qualify for April or May could still access it for future periods, with the deadline for registering to receive June JobKeeper payments being 30 June
  • Pay employees $1,500 per fortnight from first period of JobKeeper claim
  • Monthly payroll cycle is still acceptable as long as average out to $1,500 per fortnight
  • Lodge monthly reports with the ATO by the 14th day of following month, including current employee numbers, current and projected turnover for the month.

Warning – employers must keep good records as ATO enforcement action is coming.

This article was published in the 2020 Winter edition of Financial Times.