COVID-19 stimulus package update JobKeeper Payment and other - - PowerPoint PPT Presentation

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COVID-19 stimulus package update JobKeeper Payment and other - - PowerPoint PPT Presentation

Jan 30, 2024 270 likes •529 views

COVID-19 stimulus package update JobKeeper Payment and other measures Rahul Singh Doug McBirnie Technical Services Manager General Manager Accurium Challenger l Job Keeper payment What is it? Legislated on 8 th April Still waiting

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COVID-19 stimulus package update

JobKeeper Payment and other measures

Rahul Singh Technical Services Manager Challenger l Doug McBirnie General Manager Accurium

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Legislated on 8th April

Still waiting for final Regulation with all the details

Starting from 30 March 2020 and ending on 27 September 2020

Wage subsidy for eligible employers in respect of eligible employees and self-employed

Payment of $1,500 per fortnight to be paid by ATO to employer in arrears to subsidise employment costs 3

Job Keeper payment

What is it?

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JobKeeper payment

Eligible employers

Turnover less than $1 billion Turnover $1 billion or more Charities and Not for Profits*

Turnover reduced or likely to reduce by ≥ 30% Turnover reduced or likely to reduce by ≥ 50% Turnover reduced or likely to reduce by ≥ 15%

* Certain universities and non-government schools have to meet the turnover reduction test based on 30% or 50% threshold Entities liable for Major Bank Levy are ineligible Insolvent on in liquidation entities also ineligible

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Turnover has or will likely fall in the relevant month or quarter (depending on Business Activity Statement reporting period) relative to turnover in a corresponding period a year earlier

Turnover is calculated as it is for GST purposes and includes all taxable supplies and all GST free supplies but not input taxed supplies

Commissioner discretion can be applied where business not in operation for 12 months or prior turnover not representative of usual turnover

Some tolerance from the Commissioner where employers, in good faith, estimate a 30 per cent or more

  • r 50 per cent or more fall in turnover but actually experience a slightly smaller fall

Reduction of turnover in consolidated groups will apply to each business in the group 5

JobKeeper payment

Turnover

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JobKeeper payment

Ineligible employers

Australian Government and its agencies State & Territory Government and its agencies Local Government and its agencies

Government employees

Foreign Government and its agencies

May have their own wage subsidy measures

Employers who don’t meet turnover reduction test Employers who don’t claim JobKeeper Payment

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Employers liable for Bank Levy

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Minimum of $1,500 per fortnight needs to be paid to employee with JobKeeper paid monthly in arrears Can be paid by a combination of:

Gross salary, wages, commissions, bonus, allowances

Salary sacrifice

Other amounts agreed with the employee 7

Job Keeper payment

Need to pay a minimum of $1,500 per fortnight to employees

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Currently employed by the eligible employer (including those stood down or re-hired)

Were employed by the employer at 1 March 2020

Are full-time, part-time, or long-term casuals (a casual employed on a regular and systemic basis for longer than 12 months as at 1 March 2020)

Are at least 16 years of age at 1 March 2020

Are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020

Were a resident for Australian tax purposes on 1 March 2020; and

Are not in receipt of a JobKeeper Payment from another employer. 8

JobKeeper payment

Eligible employees

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Employer doesn’t claim JobKeeper payment

Temporary visa holders

Casuals NOT employed on a regular and systemic basis for longer than 12 months as at 1 March 2020

Terminated / redundant before 1 March 2020 and not rehired OR terminated / redundant on or after 1 March 2020

  • Different to being “stood down”

Receiving Paid Parental Leave from Services Australia

On Worker’s compensation and not working

Government employees

  • May have wage subsidy provided by the relevant Government

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JobKeeper payment

Ineligible employees

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JobKeeper payment

Flow of funds

ATO Employer Employee

Need to be paid minimum of $1,500 per fortnight First payment starts in first week of May

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Monthly in arrears

Reflects payment made to employee through STP

Notify employee that employer is receiving

Notify ATO monthly of turnover reduction test met

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JobKeeper payment

Example

Real estate business with two employees

Full time employee earning $3,000 per fn Part time employee earning $1,000 per fn

‒ Gets paid $3,000 per fortnight by employer ‒ Employer gets $1,500 from JobKeeper Payment to subsidise the cost of employee ‒ Gets paid $1,000 per fortnight by employer ‒ Gets paid an additional $500 per fortnight by employer ‒ Employer gets $1,500 from JobKeeper Payment to subsidise the cost of employee

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JobKeeper payment

Eligibility criteria for sole traders

Turnover has or will fall by by 30% or more

Had an ABN on or before 12 March 2020 and either:

  • Had assessable income for 2018-19 FY and included in their lodged tax return by 12 March 2020 (unless time

extended by Commissioner)

  • Made a supply during 1 July 2018 to 12 March 2020 and provided this information to the Commissioner on or before

12 March 2020 (unless time extended by the Commissioner);

Actively engaged in the business

At least 16 years of age at 1 March 2020

An Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020 & Australian tax resident

Not entitled to JobKeeper Payment from another payer.

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JobKeeper payment

Not employee or a sole trader but carry on a business through an entity

Partners

  • One partner can be nominated

Trusts

  • One beneficiary can be nominated

Companies

  • One director can be nominated if directors are solely being paid through director fees
  • One shareholder can be nominated if shareholders are solely being remunerated

through dividends

Share traders and property owner carrying on a business

  • Potentially

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JobSeeker Payment and Coronavirus Supplement

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Payment rate comparison

JobSeeker including $550 Coronavirus Supplement^

^^ Coronavirus Supplement payable from 27 April 2020 for maximum of six months * May be higher if a person is a non-homeowner and also eligible for Rent Assistance.

JobKeeper ($1,500 per fortnight) delivers greater monetary benefits, however need to be employed or self-employed. Business entities distributing passive income may only have one person eligible.

Situation Fortnightly payment Energy Supplement per fortnight Coronavirus Supplement per fortnight Total if also eligible for Coronavirus Supplement* Single $565.70 $8.80 $550 $1,124.50 Single with at least

  • ne child

$612 $9.50 $1,171.50 Partnered (each) $510.80 $7.90 $1,068.70

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JobKeeper and JobSeeker Payment

JobKeeper

Non means tested Employees need to be on the books of the employer

  • n 1 March and

continuously since Eligible sole traders could pick and choose but would generally be better off under JobKeeper Partnerships, trusts & companies where individuals only receive passive income – only one person eligible

JobSeeker

Asset test relaxed but still income tested Employees not on the books of the employer will need to consider JobSeeker JobKeeper payments are assessable income for JobSeeker so for most people will cancel JobSeeker Partnerships, trusts and companies where individuals only receive passive income – anyone not receiving JobKeeper may consider JobSeeker

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Relaxed eligibility for relevant income support

Relaxed rules enhancing eligibility

For Jobseeker Payment

  • Assets Test
  • Definition of ‘unemployed’
  • Liquid of ‘unemployed’
  • Ordinary waiting period
  • Newly arrived resident’s waiting period
  • Seasonal worker preclusion periods

Mutual obligations requirement changes

Income Maintenance Period (IMP) and Compensation Preclusion Periods still apply 17

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Relaxed eligibility for relevant income support

Relaxation on definition of unemployment

For Jobseeker Payment, a person can be considered unemployed if

 For sole traders and self-employed: business was suspended, or suffered a reduction in turnover, as a result of the

adverse economic effects of the coronavirus

 The person’s working hours were reduced (including to zero) as a result of the adverse economic effects of the

coronavirus

 Person is in self-isolation as a result of advice of a Government body or a health professional regarding the

coronavirus and the person’s working hours were reduced (including to zero)

 Secretary may require employees to use leave entitlements but someone on leave without pay could be considered to

be unemployed

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Jobseeker income test

Income test

Single and not a principal carer

$104 to $254 per fortnight 50 cents reduction Above $254 per fortnight 60 cents reduction No entitlement at $1,086.50 per fortnight

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JobSeeker income test

Income test

Partnered – personal income test $104 to $254 per fortnight 50 cents reduction Above $254 per fortnight 60 cents reduction No entitlement at $993.50 per fortnight

But also take into account partner’s income

Partner’s income until 26 April 2020 Partner’s income $993.50 No impact For each $ > $993.50 per fortnight 60 cents reduction No entitlements at $1,858 per fortnight From 27 April 2020 No impact 25 cents reduction $3,068.80 per fortnight

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Who may not be eligible for JobKeeper but may be eligible for JobSeeker?

Employer doesn’t claim JobKeeper payment

Casuals NOT employed on a regular and systemic basis for longer than 12 months as at 1 March 2020

Terminated / redundant before 1 March 2020 and not rehired or terminated / redundant on or after 1 March 2020

  • May have an income maintenance period

Receiving Paid Parental Leave from Services Australia

On Worker’s compensation and not working

  • Although may have compensation preclusion period

Government employees if not covered by the relevant government’s wage subsidy measure

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Who may not be eligible for both JobKeeper and JobSeeker?

Received substantial termination payments from employers such as redundancy and leave entitlements due to Income Maintenance Period

No longer an employee and partner’s income in excess of the allowable income

Employer doesn’t claim or is not eligible for JobKeeper, employee ‘stood down’ and partner’s income affects JobSeeker eligibility 22

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Other FAQ

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Temporary early access to superannuation

New condition of release enabling $10,000 release from super

Can withdraw from multiple accounts to make up $10,000

Only one application can be made per financial year until the closing period of 24 September 2020

Be careful if full requested amount could not be released. For example insurance premiums or market volatility

  • Cannot do a subsequent application to top up

2-3 days for ATO to confirm status of application

For TRIS (TtR) balances, consider commuting the intended withdrawal amount back to accumulation

Monitor issues for

  • Personal deductible super contributions and Notice of Intent
  • Insurances in the fund including $6,000 threshold and being inactive

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Updating of account based pension balances - ABP

Services Australia proactively updating ABP balances

Usually, ABP balances are automatically updated in February and August by Services Australia / DVA

Services Australia has engaged providers to provide out of cycle updated account balances for ABPs and TAPs

Most product providers providing data files

Consider

  • Checking with the fund whether they are going to provide updated balances to Services Australia
  • Client should then receive correct entitlement based on updated account balances
  • Consider updating managed funds / listed securities / cash

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Contact us

The information in this presentation has been prepared by Accurium Pty Ltd ABN 13 009 492 219 (Accurium). It is general information only and is not intended to be financial product advice, tax advice or legal advice and should not be relied upon as such. Whilst all care is taken in the preparation of this presentation, no warranty is given with respect to the information provided and Accurium is not liable for any loss arising from reliance on this information. Scenarios, examples and comparisons are shown for illustrative purposes only and should not be relied on by individuals when they make investment decisions. We recommend that individuals seek professional advice before making any financial decisions. This presentation was accompanied by an

  • ral presentation, and is not a complete record of the discussion held. No part of this presentation should be used elsewhere without prior consent from the author.

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