JobKeeper & Other Updates

JobKeeper – Have you completed Stage 2 and 3?

The JobKeeper rules have evolved over recent weeks and the process has been confusing for many people. Here are 2 things that you need to ensure have been attended to today (or did you mean to date) in order to participate in the May payment and maximise the payments for the first 2 fortnights:

1. JobKeeper payments have commenced being paid and many businesses have now received their first JobKeeper subsidy. However, the ATO has indicated that to receive the payment for the first two JobKeeper payments by the first week of May you must complete Steps 2 and 3. Both of these steps are completed on the Business Portal. If you do not have access to the Business portal, please contact us so that we can complete it on our Tax Agent Portal.

Step 2 requires you to nominate your employees eligible for JobKeeper or in the event of a sole trader, nominate the eligible person.

Step 3 requires to you complete the monthly turnover figures. For this month you need to complete the actual turnover for April 2020 as well as the projected May 2020 turnover.

If you miss this cut-off, you have up till 31 May 2020 to complete Steps 2 and 3 however the payments for these fortnights will be delayed.

2. A pre-requisite for employees being eligible to participate in the first 2 fortnights (commencing 30 March) is that each employee has been paid the minimum of $1,500 for each of these 2 fortnights (or the monthly equivalent of $3,250). If you have not already paid an employee this minimum amount, you are not entitled to receive payment for them for the month of April. However, if you are eligible for JobKeeper going forward, please ensure you pay the employees to top up to take them to $1,500 per fortnight.

Both of these steps are required to be completed each month.

What happens if you are claiming JobKeeper for 16/17 year olds?

If the employer is claiming for the first three JobKeeper fortnights (up to and including 10 May 2020)

On 1 March 2020, your employee needs to have been at least 16 years old.

If the employer is claiming for later JobKeeper fortnights (on/after 11 May 2020)

On 1 March 2020, your employee needs to have been at least 16 years old and either:

  • 'independent' within the meaning of the Social Security Act 1991
  • not a 'full time student' within the meaning of the Social Security Act 1991

Generally they are considered 'independent' if they:

  • have supported themselves through work with long term full or part-time employment broadly for a two year period
  • are, or have been, married or are in a registered relationship
  • live in a de facto relationship as a member of a couple for at least 12 months
  • have, or have had, a dependent child
  • are a job seeker assessed as unable to work over 30 hours a week
  • are unable to live at home due to extreme circumstances
  • have parents that are unable to support them
  • are a refugee and their parents do not live in Australia
  • are an orphan and have not been legally adopted
  • are in state care, including foster care

Generally, they are considered a 'full-time student' if they are enrolled in and undertaking study in a course of study at an educational institution of at least 75 per cent of the normal full-time study requirements.

The JobKeeper rules can be complicated and the rules change consistently. If you have any questions in relation to JobKeeper please contact our office

PLEASE NOTE - Employers who are subject to payroll and qualify for the JobKeeper, please note that any payments made to employees to “top up" their wage to $1,500 are exempt from Payroll Tax in Victoria

Victorian Government $10,000 Grant Extended

The Victorian Government has recently altered the eligibility for this grant.

One of the key conditions to obtaining the Victorian Government grant as originally announced was that based on the industry the business operated within, the business had been forced to close or was directly impacted by forced closure measures announced by the Victorian Government.

On 1 May 2020, the parameters of the scheme were widened by the Victorian Government. The Government announced that the scheme will now also be available to all other businesses (i.e. irrespective of the industry they operate in) that are enrolled for JobKeeper (i.e. have experienced a 30% or greater reduction in turnover).

This means that businesses will now be able to apply for the Victorian Government grant where they:

  1. Employ staff;
  2. Hold an ABN as at 16 March 2020 and have turnover of greater than $75,000 for the 2020 financial year;
  3. Have annual wages of less than $650,000 in the 2020 financial year; and
  4. Are enrolled for JobKeeper.

The Victorian Government press release states that the registration process for claiming the $10,000 grant will be updated shortly to reflect the modifications announced (as at the date of this press release, registrations were not open yet based on the revised criteria). It also states that those businesses that have already applied for the $10,000 grant and been declined due to the industry sector their business operates in will be automatically contacted.

Therefore if you are registered for JobKeeper and satisfy all four criteria above, do not hesitate to register for $10,000 Grant HERE

If you have any further questions, please do not hesitate to contact our office.

Lower deeming rates are here

New lower deeming rates may give relief to some people through higher cashflows – and comes as good news.

Deeming simplifies how your investments are assessed for Centrelink/Veterans' Affairs entitlements and aged care fee contributions, by applying a government set interest rate to all financial investments. This includes bank accounts, shares, managed funds and some account-based pensions.

But when deeming rates have been higher than what the bank is paying in interest, it has caused inequities, unless taking higher levels of risk are taken with investments.

What are the new deeming rates?

Deeming rates fell by 0.75% on 1 May. This has reset deeming rates.

Single person with financial investments:

  • up to $51,800- deeming rate per annum is 0.25%
  • over $51,800 - deeming rate per annum is 2.25%

Couple (combined) with financial investments:

  • up to $86,200- deeming rate per annum is 0.25%
  • over $86,200 - deeming rate per annum is 2.25%

Who is likely to benefit?

The benefit of the lower deeming rates may be seen through higher pension entitlements and lower aged care fees. People who are likely to benefit are those:

  • Receiving a part-pension that is assessed under the income test
  • Paying an income-tested fee for home care packages
  • Paying a means-tested fee for residential aged care
  • Who are low-means and paying a daily accommodation payment (DAP) towards residential aged care accommodation.

Self-funded retirees who missed out on an age pension because of their level of assessable income may wish to review their situation to see if they now qualify.

We are here to help

If you benefit from the lower rates, you will see the age pension changes in your next payment. This will happen automatically without you doing anything. It may be a good idea to check your Centrelink records to ensure all balances and details are up to date.

If you are paying fees that are means-tested (or income-tested) fee towards aged care services, the reductions may not occur until after 1 July when the government does its next quarterly review and fee adjustment. As this is still two months away, for some people it may be worth requesting an interim assessment, but care is needed as this will update all changes in your personal and financial situation.

If financial advice is needed, we are here to help. We can help with calculations and advice to ensure you are managing cashflow most effectively. And in the spirit of social distancing we are able to run meetings via video conferencing. Contact us today.