How to Claim the JobKeeper Payment

On 8 April 2020 the Australian Federal Government passed the legislation necessary for the JobKeeper Payment to be enacted.

Please see below for a summary of the steps needed to be undertaken to obtain the JobKeeper Payment, as well as a summary of the key considerations:-

LAST UPDATED 16 APRIL 2020

What steps do you need to undertake if you think your business is eligible for the JobKeeper Payment?

Step 1

Enrolment for the JobKeeper Payment does not commence until 20 April 2020, however, the ATO is providing a service that provides JobKeeper Payment updates. To sign up for this you can register your interest for the JobKeeper Payment.

Step 2

Determine whether your business is eligible for the JobKeeper Payment.

Step 3

Determine which employees are eligible for the JobKeeper Payment.

Step 4

Determine whether your business has an ‘Eligible Business Participant’ that is entitled to receive the JobKeeper Payment.

Step 5

Ensure that your business is lodging their payroll utilising Single Touch Payroll.

Step 6

Ensure that each Eligible Employee has been paid at least $1,500 per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).

Note that the there is a transitional rule, whereby, for the first two (2) fortnights (30 March 2020 to 12 April 2020 and 13 April 2020 to 26 April 2020), the ATO will accept that the minimum $1,500 payment (for each Eligible Employee) for each fortnight has been paid (even if it has been paid late), provided it is paid in full by the end of April 2020.

Step 7

Notify any Eligible Employees that you are intending to claim the JobKeeper Payment on their behalf and confirm that they aren’t claiming the JobKeeper Payment through another employer/business.

Step 8

Send the JobKeeper Employee Nomination Notice to any nominated employees to be completed and returned by the end of April (if you are intending to claim the JobKeeper Payment for April). The signed documents should be retained, and a copy provided to your Registered Tax Agent (if you are using one).

Step 9

Formally enrol for the JobKeeper Payment using the Approved Form (this should be available from 20 April 2020). Enrolment is required to be completed by the end of April 2020 if the business intends to claim the JobKeeper Payments for the month of April 2020.

When enrolling for the JobKeeper Payment the following information will be required to be included on the form:-

bank details;
indicate if you are claiming an entitlement based on business participation (ie. Sole Trader etc.);
estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March 2020 to 12 April 2020); and
estimated number of employees who will be eligible for the second JobKeeper fortnight (13 April 2020 to 26 April 2020).

Step 10

Each month, the business will need to reconfirm the reported Eligible Employees have not changed. This can be accomplished through the ATO’s online services, the Business Portal or via its Registered Tax Agent.

The business will not need to retest its reported fall in Turnover, but it will need to provide the ATO with information as to its Current and Projected Turnover.

This will be disclosed when submitting the monthly JobKeeper Declaration Report.

Step 11

If there has been a change to the Eligible Employees, the ATO will need to be notified when submitting the monthly JobKeeper Declaration Report.

Is your business eligible for the JobKeeper Payment?

Entities carrying on a business in Australia (or non-profit bodies pursuing its objectives principally in Australia) on 1 March 2020 will be eligible for the subsidy if:-

their business has an Aggregated Turnover of less than $1 billion (including related entities) and estimate their GST Turnover (for the entity in question) has fallen or will likely fall by 30 per cent (30%) or more; or
their business has an Aggregated Turnover of $1 billion or more and estimate their GST Turnover has fallen or will likely fall by 50 per cent (50%) or more; or
charities registered under the Australian Charities and Not-for-profits Commission Act 2012 (Cth) and estimate their GST Turnover has fallen or will likely fall by 15 per cent (15%) or more.

The following entities are not eligible for the subsidy:-

Australian Government and its agencies;
State and Territory Governments and their agencies,
Foreign Governments and their agencies;
Local Council Governments;
wholly-owned corporations of any of the above;
a business subject to the Major Bank Levy;
a Company that is in liquidation; and
a Partnership, Trust or Sole Trader in bankruptcy.

GST Turnover requirements

In comparing the Employers Projected GST Turnover for the Turnover Test Period against its Current GST Turnover for the Relevant Comparison Period, the following modifications have been made to the definition of GST Turnover:-

disregarding adjustments to GST Turnover as a result of the GST Grouping Provisions;
calculating GST Turnover for the relevant period rather than 12 months (ie. for the month/quarter instead of the year); and
each external Territory is treated as forming part of the indirect tax zone.

The Turnover Test Period is:-

a calendar month that ends after 30 March 2020 and before 1 October 2020; or
a quarter that starts on 1 April 2020 or 1 July 2020.

The Relevant Comparison Period, is the period in 2019 that corresponds to the turnover test period.

Is your employee eligible for the JobKeeper Payment?

An Eligible Employee, is an employee who:-

is currently employed by the eligible employer (including those stood down or re-hired);
is a full-time or part-time employee, or a casual employed on a regular and systematic basis for longer than 12 months as at 1 March 2020;
is a permanent employee of the employer, or if a casual employee, not a permanent employee of any other employer;
was aged 16 years or older at 1 March 2020;
was an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020;
was a resident for Australian tax purposes on 1 March 2020; and
is not in receipt of a JobKeeper Payment from another employer.

An individual is excluded from being an Eligible Employee of an entity for a fortnight if:-

parental leave pay is payable to the individual and the individual’s PPL period overlaps with, or includes, the fortnight; or
at any time during the fortnight, the individual is paid dad and partner pay; or
all of the following apply:-

1. the individual is totally incapacitated for work throughout the fortnight;
2. an amount is payable to the individual under, or in accordance with, an Australian workers’ compensation law in respect of the individual’s total incapacity for work;
3. the amount is payable in respect of a period that overlaps with, or includes, the fortnight.

Does your business have an Eligible Business Participant that is entitled to the JobKeeper Payment?

A business is only able to have one Eligible Business Participant per entity.

An individual is the Eligible Business Participant for an entity for a fortnight if:-

the individual is not employed by the entity at any time in the fortnight; and
the individual satisfies the Business Participation Requirements at a time in the fortnight; and
the individual satisfies the 31 March 2020 Requirements and the Nomination Requirements; and
the individual is not specifically excluded from being the eligible business participant for the entity for the fortnight.

The Business Participation Requirements are satisfied at a time if, at that time:-

the individual is actively engaged in the business carried on by the entity; and
the individual is covered by column 2 of the applicable item of the following table.

Item	Column 1 If the entity is a …	Column 2 The individual must be …
1	Sole trader	The entity
2	Partnership	A partner in the partnership
3	Trust	An adult beneficiary of the trust
4	Company	A shareholder in or a director of the company

The 31 March 2020 requirements are that, on 1 March 2020:-

the individual was aged 16 years or over; and
the individual satisfied the Business Participation Requirements; and
the individual:-
- was an Australian resident (within the meaning of section 7 of the Social Security Act 1991); or
- was a resident of Australia for the purposes of the Income Tax Assessment Act 1936 and was the holder of a special category visa referred to in the regulations under the Migration Act 1958 as a Subclass 444 (Special Category) visa.

How Much to Pay?

Gross Wages

An Eligible Employer is required to pay the minimum $1,500 (before tax) per fortnight to each Eligible Employee to claim the JobKeeper Payment for that fortnight.

If the Eligible Employee earns less than $1,500 per fortnight (before tax), the Employer must pay them at least $1,500 for each fortnight to claim the JobKeeper Payment.

You cannot pay your employees less than $1,500 per fortnight and keep the difference.

You will not be eligible for the JobKeeper payment if you pay your nominated employee less than $1,500 before tax per fortnight.

If an Eligible Employee earns more than $1,500 per fortnight, the Employer should continue to pay them their regular salary or wages.

Any amount the employer pays above $1,500 per fortnight is not subsidised by the JobKeeper Payment.

Example 1

An employee is ordinarily entitled to Gross Wages of $1,000 per fortnight, assuming the employee continues to work in the business, the employer would be required to pay the employee Gross Wages of $1,500.

The employer would then be entitled to receive the $1,500 JobKeeper Payment (within 14 days after the end of the month).

Example 2

An employee is ordinarily entitled to Gross Wages of $2,000 per fortnight, assuming the employee continues to work in the business, the employer would be required to pay the employee their Gross Wages of $2,000.

The employer would then be entitled to receive the $1,500 JobKeeper Payment.

Example 3

An employee has been stood down and is no longer able to work in the business as a result of the Coronavirus, the employer would be required to pay the employee Gross Wages of $1,500.

The employer would then be entitled to receive the $1,500.

Example 4

An employee has been partially stood down (as a result of the Coronavirus) and has performed work in the business that would entitle them to a Gross Wage of $500, the employer would be required to pay the employee Gross Wages of $1,500.

The employer would then be entitled to receive the $1,500 JobKeeper Payment.

Example 5

An employee has been partially stood down and has performed work in the business that would entitle them to a Gross Wage of $2,000, the employer would be required to pay the employee their Gross Wages of $2,000.

The employer would then be entitled to receive the $1,500 JobKeeper Payment.

Note that as the JobKeeper Payment covers the fortnight commencing 30 March 2020 (ie. 30 March 2020 to 12 April 2020), and ceases on the fortnight ending 27 September 2020 (ie. 14 September to 27 September), an employer will need to ensure that each Eligible Employee has received sufficient Gross Wages for each period.

Example 6

An employee is paid $1,000 for the fortnight ended 2 April 2020 (or $100 a day – assuming they work weekdays), as this fortnight covers four (4) days in the first JobKeeper Fortnight (ie. 30 March 2020 to 2 April 2020), the employee has not been paid the full $1,500 per fortnight in relation to those four (4) days (ie. the minimum payment of $1,500 per fortnight, equates to $150 a day – assuming they work weekdays).

To ensure that the employer remains eligible for the JobKeeper Payment for the employee, they will need to ensure that they pay an additional $200 of Gross Wages (being 4 days of the $50 shortfall) along with the $1,500 in Gross Wages for the fortnight ended 16 April 2020.

This is possible as the ATO will accept that the minimum $1,500 payment has been paid provided it is paid in full by the end of April 2020.

Superannuation

The Employer is not required to pay Superannuation on any portion of the JobKeeper Payment that is in excess of the Ordinary Times Earnings of the employee (although they may choose to do so).

Example 7

An employee has been stood down and is no longer able to work in the business (as a result of the Coronavirus).

The employer is not required to pay Superannuation on the $1,500 Gross Wages payable as a result of the JobKeeper Payment.

Example 8

An employee has performed work that would entitle them to Gross Wages of $1,000 for the fortnight.

The employer is only required to pay Superannuation on the $1,000 and not on the additional $500 payable as a result of the JobKeeper Payment.

Example 9

An employee has performed work that would entitle them to Gross Wages of $2,000 for the fortnight.

The employer is required to pay Superannuation on the full $2,000.