COVID Financial Assistance

Latest Update

JOBKEEPER 2.0

JobKeeper 1.0 is now concluding and the commencement of JobKeeper 2.0 is about to commence. (URGENT – if you were on JobKeeper 1.0, please review your wages for eligible employees effective 28 September 2020. Refer below for more information on a change of rates).

If you were registered for JobKeeper 1.0 and you remain eligible for JobKeeper 2.0, due to satisfying the turnover reduction test (see below), you do not need to take any action. However, if you cease to be eligible, you must cancel your enrolment in JobKeeper. If you did not qualify for JobKeeper 1.0 but you are now eligible for JobKeeper 2.0, you must register and separately nominate your eligible employees.

If you need assistance with any of this, please contact our office.

The following is a brief outline of JobKeeper 2.0:

Eligible Employers – you must have conducted a business as of 1 March 2020 and employ 'eligible employees' during the fortnight that you claim JobKeeper 2.0 for. You must ensure that each eligible employee receives fortnightly wages of at least equal to the JobKeeper payment being received (see below).

Eligible Employees – There have been changes to this since JobKeeper 1.0. From 3 August 2020, eligible employees are those employees that have been employed since 1 July 2020 on a full time or part time basis. For any casual employees, they will also be eligible employees where they have been employed on a regular basis for at least 12 months prior to 1 July 2020.

Eligible Business Participants - these include sole traders, partners in a partnership, beneficiaries of the trust or directors of a company that are not employees of the business. Eligibility of JobKeeper 2.0 is still in place for these participants. A criterion though is that the eligible business participant must have commenced business prior to 12 March 2020 and the business must have lodged either a 2019 financial year income tax return or a business activity statement prior to 12 March 2020.

Calculating a reduction of turnover - Under JobKeeper 2.0 the reduction in turnover test is calculated by reference to the following comparison periods:

JobKeeper 2.0 period

Turnover testing period

Turnover comparison period

December 2020 quarter

(comprising JobKeeper fortnights 14 – 19)

30 Sep 2020 quarter

30 Sep 2019 quarter

March 2021 quarter

(comprising JobKeeper fortnights 20 – 26)

31 Dec 2020 quarter

31 Dec 2019 quarter


Under JobKeeper 2.0, the turnover tests are based on actual GST turnover for the quarter and not based on projected GST for the quarter. Furthermore, for JobKeeper 2.0, the ATO has stipulated that turnover needs to be calculated having regard to the same principles as the business prepares their BAS (i.e. if the business reports its GST on an accruals basis, turnover is calculated on an accruals basis whereas if the business reports its GST on a cash basis, turnover is calculated on a cash basis).

There will be alternative tests available to calculate the reduction of turnover to assist those businesses that have irregular turnover. However, the Taxation Office have not released these yet. It is expected that it will be similar to JobKeeper 1.0.

Pay Rate – As mentioned earlier, it is important that eligible employers pay their eligible employees as a minimum, the JobKeeper amount per fortnight, even if they earn less than this. For JobKeeper fortnights starting on or after 28 September 2020, the amount will depend on the employee's total hours worked, paid leave, and paid public holidays during this period.

PLEASE NOTE THE DECREASE IN THE PAY RATE EFFECTIVE 28 SEPTEMBER 2020 FROM $1,500 TO $1,200 OR $750 (depending on the hours worked). This is outlined below:

Dec 2020 quarter (comprising JobKeeper fortnights 14 – 19)

Mar 2021 quarter (comprising JobKeeper fortnights 20 – 26)

For those eligible employees that worked at least 80 hours (including paid leave) during the month of February 2020 or June 2020

(Tier 1 Employees)

$1,200 per fortnight

$750 per fortnight

For those Eligible Business Participants that worked at least 80 hours during the month of February 2020

(Tier 1 Eligible Business Participants)

$1,200 per fortnight

$750 per fortnight

For those eligible employees that did not work at least 80 hours (including paid leave) during the month or February 2020 or June 2020

(Tier 2 Employees)

$1,000 per fortnight

$650 per fortnight

For those Eligible Business Participants that did not work at least 80 hours during the month of February 2020

(Tier 2 Eligible Business Participants)

$1,000 per fortnight

$650 per fortnight


VICTORIAN GOVERNMENT SUPPORT (ROUND 3)

In our previous update, we outlined the funding available for the third round of Business Support Fund available from $10,000 - $20,000 depending on the business annual payroll. The Victorian Government has since only made this available to businesses in certain business sectors that are Restricted, Heavily Restricted or Closed and for which restrictions are not easing between the First and Second Steps of the “Roadmap". For a full list of these sectors, please click HERE.

If you are not eligible for this Business Support Fund, you may be able to access other support programs from the Victorian Government's Business Resilience Package. This support package includes the following funding opportunities:

1. Sole Trader Support – Grants of $3,000 are available to sole traders who are in the hardest hit sectors, such as retail, accommodation and food services, creative and media, hairdressing, gyms, events, education and training. To be eligible for this grant you must:

a. be a non-employing business operating in Victoria.
b. operate from a commercial premises or location.
c. hold a valid ABN.
d. be a current participant in the Commonwealth Government's JobKeeper payment scheme.
e. operate in an industry sector that has been heavily restricted or closed as a result of continued restrictions.
f. have not received a Business Support Fund Expansion grant (i.e. $10,000 for Metro business and $5,000 Regional).

The application process has not yet opened for this and a full list of the eligibility criteria will be made available at this time.

2. Licensed Hospitality Venue Fund – Grants of up to $30,000 will be available based on location of the premises and the maximum patron capacity as shown below:

Patron Capacity

Eligible Grant Amount

Metropolitan

Melbourne

Regional

Victoria

1-20

$15,000

$10,000

21-100

$20,000

$15,000

101 or more

$30,000

$25,000


A full list of eligibility criteria has not been published yet but will be as soon as the application process opens. However, at this stage we know that to be eligible you must:

Operate a licensed pub, club, hotel, bar, restaurant or reception centre under a general, full club or on-premises liquor license issued by the Victorian Commission for Gambling and Liquor Regulation; and

Have premises that serve patrons and holds a Class 2 or 3 Service Sector – Certificate of Registration under the Food Act 1984 (Vic) issued by a local council.

3. Outdoor Hospitality Support – Grants of up to $5,000 will be available for hospitality businesses with an annual payroll of less than $3 million to help them adapt to outdoor dining.

4. Melbourne City Recovery Fund – Grants will be available for small and medium businesses to pay for equipment, covert spaces like rooftops and courtyards into hospitality zones and remodel internal layouts to allow for better flow of patrons. However, you must be in the Melbourne CBD to be eligible.


AUDIT INSURANCE

You will note that on any of the applications for Grants or JobKeeper, there is a statement from the Government authority that they will be reviewing your entitlements to these funds and undertake an audit on your entitlement to these funds. The Victorian Government has allowed for a 4-year period after the grant has been approved to audit the application.

We are of the belief at this stage, that the Federal and State Government are releasing these funds out to the businesses as it assists with the economy. However once things settle, we also believe that there will be significant audit activity being undertaken to ensure that only those eligible, have received the funds.

Based on this, now would be a time to consider audit insurance for your business. We are seeing more review and audit activity by the Australian Taxation Office and we are certain to see more as a result of the grants being offered. Audit insurance covers any costs that are charged by professionals to assist in the audit process. Audit insurance is cost effective and is also tax deductible.

If you would like a quote, please do not hesitate to contact our office.