Welcome to our latest newsletter which in keeping with the theme of this year is all about COVID-19 again.
Due to the lingering effects on our economy, the Federal Government has announced a welcome extension to the JobKeeper and JobSeeker programs.
And due to the ongoing restrictions in Victoria, the Victorian State Government has also announced additional support packages through cash grants, tax relief and cash flow support.
This newsletter provides further details of these updated measures…
Extension of the JobKeeper Payment
On 21 July 2020 (and updated on 7 August 2020) the Federal Government announced an extension to the JobKeeper Payment for a further 6 months to 28 March 2021. However the payment will be on a scaled back basis with businesses required to reassess their eligibility to remain in the scheme. The new JobKeeper Payment will now be made over two separate extension periods from 28 September 2020 to 3 January 2021 and from 4 January 2021 to 28 March 2021.
From 28 September 2020, businesses will be required to reassess their eligibility for the extension based on their actual decline in GST turnover (not projected) in the September 2020 quarter compared to the same quarter in 2019. And again from 4 January 2021, businesses will be required to reassess their eligibility based on their actual decline in GST turnover (not projected) in the December 2020 quarter when compared to the same quarter in 2019.
From 28 September 2020 the revised scheme is a two-tiered payment system as follows:
| EXTENSION PERIOD 1 28 September 2020 to 3 January 2021 |
EXTENSION PERIOD 2 4 January 2021 to 28 March 2021 |
|
| TIER 1 Higher Rate |
$1,200 per fortnight | $1,000 per fortnight |
| TIER 2 Lower Rate |
$750 per fortnight | $650 per fortnight |
Tier 1 applies to:
- eligible employees and business participants who worked for 20 hours per week or more on average in the relevant reference period.
Tier 2 applies to:
- eligible employees and business participants who worked less than 20 hours per week on average in the relevant reference period.
The relevant reference period for employees is the 4 weeks of pay periods before either 1 March 2020 or 1 July 2020 whichever gives the better outcome for employees. This will also capture any new employees since March 2020. For business participants the relevant reference period is the calendar month of February 2020 and based on total hours of active engagement.
Casual employees are still eligible if they have been employed on a regular and systematic basis for a minimum of 12 months.
The decline in GST turnover is determined in accordance with the existing rules i.e. 50% for entities with an aggregated turnover of more than $1 billion, 30% for entities with an aggregated turnover of $1 billion or less, and 15% for ACNC registered charities.
Applying for the Extended JobKeeper
It is expected that the ATO will release the appropriate application forms (through the ATO Tax Agent and Business Portals) on or soon after 28 September 2020.
Employers will be required to notify the ATO details of their employees and the rate of payment they are eligible for, and they must notify their employees in writing within 7 days of the applicable payment rate that they have advised to the ATO.
Business participants must also notify the ATO whether the higher or lower payment rate applies to them.
Once the rate of payment has been advised for the first extension period there will be no requirement for employers or business participants to notify the rate of payment when applying for the second extension period.
TIP 1 – Qualifying for the first time
If a business did not participate in the JobKeeper scheme prior to 28 September 2020 because they felt they would not be severely impacted, they may now be able to qualify to enter the scheme if they satisfy two tests, being:
- meeting the original eligibility criteria including a projected decline in GST turnover in any of the calendar months from March 2020 to December 2020 (or any of the June, September or December 2020 quarters) when compared to actual turnover over the same period in 2019; and
- meeting the new actual decline in GST turnover test in either the September 2020 or December 2020 quarter depending on the extension period as described earlier.
TIP 2 – Requalifying for the second extension period
A business that originally qualified for the JobKeeper Payments prior to 28 September 2020 may find they now don’t qualify for the first extension period because they don’t meet the actual decline in GST turnover for the September 2020 quarter.
However if they then find that they meet the actual decline in GST turnover in the December quarter they may re-enter the JobKeeper scheme under the second extension period from 4 January 2021 to 28 March 2021.
ADDITIONAL SUPPORT FROM THE VICTORIAN STATE GOVERNMENT
On 13 September 2020, the Victorian Government announced a $3 billion Business Resilience Package of cash grants and tax relief to be delivered to Victorian businesses most affected by the COVID-19 restrictions.
In summary the support on offer includes:
- Business Support Fund Round 3 one-off cash grants of between $10,000 to $20,000 for businesses that meet certain criteria such as employing people and participating in the JobKeeper scheme
- Grants of up to $3,000 for eligible sole traders in certain industries including retail, accommodation, food services, creative & media, hairdressing and gyms, where they operate from a commercial premises as a tenant
- Grants of up to $30,000 for licensed hospitality businesses based on venue capacity and location
- Grants of up to $20,000 for alpine businesses
- Payroll tax deferral for the 2020/21 financial year based on size of payroll
- Waiver of Vacant Residential Land Tax for vacancies in 2020
- 50% stamp duty discount for regional commercial and industrial property
- Other various business initiatives including Melbourne City Recovery Fund, Outdoor Eating and Entertainment Package, voucher program and Council grants
For more details and to apply please visit the Business Victoria website www.business.vic.gov.au
JOBSEEKER – CORONAVIRUS SUPPLEMENT EXTENDED TO 31 DECEMBER 2020
From April 2020, the JobSeeker Payment and other eligible income support payments have been supplemented by an additional payment of $550 per fortnight. Asset testing and the requirement to apply for work (known as “mutual obligation”) have also been waived. This is about to change.
From 25 September 2020, the supplement will reduce to $250 per fortnight until 31 December 2020. In addition the asset test will be reinstated, however the income test threshold will be increased to allow additional income to be earned without it affecting the JobSeeker Payment. With the exception of Victoria, the “mutual obligation” requirement to apply for work will be reinstated but at a reduced level. Centrelink will be in contact with all recipients so if you are currently in receipt of the JobSeeker Payment, make sure you update your details to comply with any requirements in order to continue to receive your payments.
EARLY RELEASE OF SUPER EXTENDED TO 31 DECEMBER 2020
Eligible individuals have been able to access a lump sum of up to $10,000 from their super fund account both prior to 30 June 2020 and after 1 July 2020. This was due to close on the 24th of September, but has now been extended until the 31st December 2020.
To be eligible you must satisfy one of the following requirements:
- you are unemployed; or
- you are eligible to receive the JobSeeker Payment, Youth Allowance, Parenting Payment, Special Benefit or Farm Household Allowance; or
- after 1 January 2020 you were made redundant, or your working hours were reduced by at least 20%; or
- you are a sole trader and there was a reduction in your turnover of more than 20%.
If you wish to apply you can do so directly with the ATO through your myGov account.
*** SCAM ALERT ***
Be wary of emails, phone calls and text messages claiming to be from the ATO. Scams currently doing the rounds include one saying you have a refund available and asking for your bank or credit card details, and another saying you owe the ATO money and aggressively threatening you with arrest. The ATO will never contact you in this way.
If you receive a message and are unsure as to its validity please contact us or report it to the ATO on 1800 008 540.
NUTWOOD PARTNERS OFFICE
From Tuesday the 24th March 2020 we have been working remotely and under the continuing Stage 4 restrictions in Victoria we will not be scheduling any appointments at our office for the foreseeable future.
We are continuing to work via phone, email, video or post to ensure that all of your lodgement obligations are met and we are available to provide assistance to you as necessary. Meeting in person will be subject to the Government’s COVID safe restrictions at the time.
If you have any questions in relation to current events and the impact on your business and finances, please feel free to contact us at anytime.
We hope that you stay safe and well.