Staff considerations

Employee Leave Queries

• The World Health Organisation (WHO) declared Coronavirus (COVID-19) a pandemic on 11 March 2020.   With the impact of COVID-19 changing the business landscape daily, it is unsurprising that employers have been left asking “but what does this mean for my business and workforce?”

Please note we do have employment law specialists on hand who are more than happy to assist with specific queries.

Workcover & working from home

• An important point to note is where your team are working from home, their home becomes a place of work and is therefore covered by Workcover.
• Australian Government Checklist to help you identify any risks associated with working from home.
  

Fair Work Requirements

•  Fair Work Ombudsman has released information that addresses Coronavirus and Australian Workplace Laws.
  Fair Work Corona Virus media release 
  

Apprentice Relief

• The government has introduced a wage subsidy to support small businesses to retain their apprentices and trainees.  Businesses may be eligible to receive 50 per cent of their apprentice’s wages, capping at $21,000, per apprentice, for the nine months from 1 January 2020 to 30 September 2020.
• Employers will be able to access the subsidy after an eligibility assessment is undertaken by an Australian Apprenticeship Support Network provider. Like other assessments, this is expected to be completed via a SmartForm on the Australian Apprenticeship website.
• Employers can register for the subsidy from 31 March 2020, and final claims of payment must be lodged by 31 December 2020.
  

JobKeeper Subsidy Payment

What is the JobKeeper Subsidy Payment?

The JobKeeper Subsidy Payment is a wage subsidy to be paid to Businesses, Sole Traders, Businesses Without Employees, Not for Profits and Charities, who have experienced a loss of at least 30 percent of their turnover relative to a comparable period a year ago (of at least a month). The payment will be made to employers at a flat rate of $1,500 per fortnight from 30 March 2020 for all employees that were employed as of March 1 2020.

Payments will be made from the first week of May backdated to 30 March and will continue for a maximum of 6 months. These payments are designed to keep employees on the payroll and connected to their business. Businesses will be required to prove that they are using the funds to subsidise wage payments to their employees and have a legal obligation to retain the employee.

Businesses can register their interest in applying for JobKeeper Payment via ato.gov.au from 30 March 2020.

Employer Obligations

• Register an intention to apply on the ATO website.
• Demonstrate that your business has or will experience the applicable 30% turnover decline.
• Provide information to the ATO on eligible employees engaged as at 1 March 2020 (including those stood down or rehired).
• Ensure that each eligible employee is paid at least $1,500 per fortnight (before tax).
• Notify all eligible employees that they are receiving the JobKeeper Subsidy Payment.
• Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

Eligible Employees

Eligible employees are employees who:

• are 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 basis for longer than 12 months as at 1 March 2020);
• are at least 16 years of age;
• are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
• are not in receipt of a JobKeeper Subsidy Payment from another employer.

Businesses Without Employees

Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.
People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.

Frequently Asked Questions that relate to the JobKeeper Subsidy Payment

What if the employee has been stood down?

If the employee was employed as of 1 March 2020 the employer remains eligible to reinstate the employee and receive the payment.

What if the employee has been made redundant?

If the employee was employed as of 1 March 2020 the employer remains eligible to reinstate the employee and receive the payment. The government has noted that leave entitlements paid as part of the redundancy are yet to be worked through.

Is superannuation payable on the JobKeeper Subsidy Payment?

If the employee is usually paid $1,500 per fortnight before tax, the employer is required to pay superannuation on their full wage including the $1,500 supplement.

If an employee earns less than $1,500 per fortnight before tax, the employer is only required to pay superannuation on the amount the employee earned as their normal wage, not on the additional amount received as part of the $1,500 payment that is in excess of the normal pay.

If my employee works part time and is usually paid less than $1,500 per fortnight, does the business still receive the full $1,500 per fortnight?

Yes, the employer will receive the full $1,500 per fortnight for the employee and the full $1,500 is required to be passed onto the employee.

If my employee earns more than $1,500 per fortnight, does the business receive more than the $1,500 per fortnight?

No, it is a flat $1,500 per employee, per fortnight, regardless of their income level.

What if the employee has already applied for support through Centrelink?

Provided the employee was employed as of 1 March 2020 they can transition back to the employer and be eligible for the payment.

Are casuals eligible for the payment?

If the casual has been employed with the employer for twelve months or more they will be eligible for the payment.

Are those on temporary work visas eligible?

The government has advised New Zealanders on 444 Visas are eligible for the payment. All other temporary visa holds will not be eligible at this point in time.

When does it apply?

Payments will be paid from the first week of May with payments backdated to the 30th March.

How does my business apply for the payments?

The business will need to complete a self-declaration that their revenue has reduced in line with the eligibility criteria via the ATO website. Your BlueRock adviser can assist you with this.

Can an employee access both the Centrelink benefits and the JobKeeper Subsidy Payment at the same time?

No, the employee receiving the JobKeeper Subsidy Payment is not eligible to also receive the JobSeeker payment.

My employee works part time in my business and as a casual in another business. Do they receive two payments of the $1,500?

No, an employee may only receive the JobKeeper Subsidy Payment from one employer.

Superannuation & Social Security for Individuals and Sole Traders

Early Release Of Superannuation

The Government will allow individuals in financial stress to access up to $10,000 of their superannuation in the 2020 financial year and a further $10,000 in the 2021 financial year.

1. To be eligible for early release of superannuation you must be either have:
2. Been unemployed, or
3. Been eligible to receive Jobseeker payment, Youth Allowance for job seekers, Parenting Payment, Special Benefit or Farm Household Allowance, or
4. Been made redundant on or after 1 January 2020, or
5. Had your working hours reduced by 20 percent or more, or if you were a sole trader had your business suspended or experienced a reduction in your turnover of 20 percent or more

Those who are eligible are able to apply through the myGov website  from mid April 2020 to access the funds before 1 July 2020 for the first $10,000 and have three months after this date to access more.  These funds will not be taxed and will not affect Centrelink or Veterans' Affairs payments.

Superannuation Pensions Minimum Draw Down Rates

The Government is temporarily reducing the superannuation minimum draw down requirements for account based pensions and similar products by 50% for the 2019/20 and 2020/21 financial years.  This will provide more flexibility as to how superannuants manage their superannuation assets.

No Relief for Employer Super Obligations

Employers will still need to meet their ongoing super guarantee obligations for their employees.

Social security deeming rates

The Government is reducing the deeming rate adopted for Age Pension income testing by a further 0.25 percentage points to reflect the latest rate reductions by the RBA.  As of 1 May 2020, the upper deeming rate will be 2.25 per cent and the lower deeming rate will be 0.25 per cent.

Income Support For Individuals & Sole Traders

• Two $750 stimulus payments to pensioners, social security, veteran and other income support recipients and eligible concession card holders.  The first of these payments was announced on 12 March 2020 and the second will be automatically made on 13 July 2020.   The payment will be tax-free and will not count as income for social security, farm household allowance, and veteran payments.
• From 27 April 2020, the Government is also temporarily expanding eligibility to income support payments to include sole traders and and establishing a new time limited Corona virus Supplement to be paid at a rate of $550 per fortnight for the next 6 months on top of existing entitlements.  
• The Corona virus Supplement will be paid to both existing and new recipients of the JobSeeker Payment, Youth Allowance, Parenting Payment, Farm Household Allowance and Special Benefit and be in addition to the payments made on under these allowances. 
• The Jobseeker payment is currently $550 per fortnight and the addition of the Corona virus Supplement increases this payment to $1,100 per fortnight.
• Sole traders and casual workers who are currently making less than $1,075 a fortnight will be eligible to receive the full supplement.

As of 30 March 2020, people who are self-employed are eligible toa apply for the JobKeeper Payment Subsidy. If you are self-employed you will need to provide a monthly update to the ATO to declare your continued eligibility for the payments. Payment will be made monthly to the your nominated bank account.

Bank Care Package

• The Australian Banking Association (ABA) has announced a relief package that includes a deferral of principal and interest repayments for all term loans and retail loans for six months for small business customers with less than $3 million in total debt owed to credit providers.
  
• At the end of the deferral period, businesses will not be required to pay the deferred interest in a lump sum.  Either the term of the loan will be extended, or the level of loan repayments will be increased.   The package applies to all ABA member banks who agree to participate (listed below).  

To read more about how the banks are assisting click on the below links.

• ANZ
• Commonwealth Bank of Australia
• Macquarie Bank
• National Australia Bank
• Westpac
• Bank of Melbourne
• Suncorp Bank

Funders outside of the (ABA) who are providing support are also listed below:

• ING
• Bankwest
• ME Bank
• Judo Bank
  

Corona virus SME Guarantee Scheme

• This Scheme is designed to provide working capital support to SME’s (businesses with turnover of less than $50 million) to get through the impact of the corona virus.
• Under the Scheme, the Federal government will guarantee 50 per cent of new SME unsecured loans issued by eligible lenders up to the value of $250,000.  This effectively represents a guarantee of $125,000.
• The government will encourage lenders to provide facilities to SMEs that only have to be drawn if needed by the SME, and will remain available into the future, with interest only on the funds that are drawn down.
• The Scheme will commence in April 2020 and loans will be made available by participating lenders until 30 September 2020.  The loans will be made under a term of 3 years with an initial 6 month repayment holiday.  No assets will be required as security for these loans. 
• These conditions apply only to new loans, not refinanced loans.
• No fees will be payable on the establishment of the loans.
  

Payroll Tax

Victoria

• Full payroll tax refunds for the 2019-20 financial year to small and medium-sized businesses with taxable wages of less than $3 million per member entity of a group.
• Payments will start flowing this week and the assistance is a refund, not a loan or deferral.
• Eligible businesses must continue to lodge returns but do not need to make further payments for this financial year.
• The State Revenue Office will directly contact eligible businesses in relation to reimbursement for payroll tax already paid in the financial year.
• The same businesses will also be able to defer any payroll tax for the first three months of the 2020/21 financial year until 1 January 2021

New South Wales

• The NSW Government has announced that they will waive  payroll tax for businesses with payrolls of up to $10m, for the months from April to June 2020.
• Also, the payroll tax threshold will be raised to $1m in 2020/21, thereby bringing forward another round of payroll tax cuts for eligible businesses.

Western Australia

• The Government will waive payroll tax for the four-month period between 1 March 2020 and 30 June 2020 for eligible businesses.
• To be eligible, the business has to qualify as a small or medium business, with Australia-wide annual wages of less than $7.5m in the 2019/20 income year. This payroll tax relief will replace the payroll tax deferral previously announced.
• Eligible business with Australian taxable wages of less than $5m as at 29 February 2020 need not apply for the waiver as it will be automatically applied. The OSR has clarified they simply need to lodge their March to June return and enter their taxable wages as normal and record them as “exempt (other) wages”. Other eligible business will need to apply to the OSR for the waiver.

Queensland

• The QLD Government have announced additional payroll tax relief measures in addition to the deferral of March to June payroll tax returns until the 3rd of August 2020.
• All businesses specifically impacted by COVID-1 will be refunded two months’ worth of payroll tax , and
• Small and medium enterprise businesses will be given a three-month payroll tax holiday and a further six-month payroll tax deferral.

South Australia

• Six-month waiver (from April to September 2020) for all businesses with an annual payroll (grouped) up to $4m.
• Employers with grouped annual wages above $4m will be able to defer payroll tax payments for six months on demonstration of significant impacts on cash flow of COVID-19.

ACT

• There will be a 6-month waiver on payroll tax for the hospitality, creative arts and entertainment industries.
• There will also be access to interest-free deferrals of payroll tax commencing on 1 July 2020 for all businesses up to a payroll threshold of $10m in Australian taxable wages.

Tasmania

• The TAS Government has extended payroll tax relief as part of its additional social and economic support package to assist those impacted by the COVID-19 pandemic.
• The payroll tax waivers previously announced for businesses in hospitality, tourism and seafood sectors, as well as businesses with payrolls less than $5m, will be extended such that these businesses will not need to pay payroll tax for the entire 2019/20 year. This will include refunds and waivers to provide cash flow to businesses.
• Affected businesses in other sectors with an annual payroll not exceeding $5m in Australian wages, can apply for a waiver of payroll tax for the three months of April, May and June 2020.
  

ATO Relief – PAYGW Refunds

• These tax free payments are to help businesses cover employee wages and applies to businesses and Not For Profit entities with a turnover of less than $50 million that employ staff, between 1 January 2020 and 31 October 2020.
• 100% of PAYG withheld between January 2020 and June 2020 will be credited to a maximum of $50,000 for the six month period. The minimum amount an employer will be able to receive is $10,000, up to the maximum of $50,000 for this period.
• An additional payment is also being introduced in the July — October 2020 period equal to the total of the PAYG withheld refunded in the previous six months to provide a total refund of up to $50,000 per entity.
• PAYGW credits will apply on a per entity, ABN basis.  Therefore, if you have two entities conducting business in your group structure each entity is eligible for PAYGW BAS credits of up to $50,000 provided each entity has paid $50,000 in PAYGW during the period 1 January 2020 to 30 June 2020.
• Maximum total refund per entity is $100,000
• Upon lodgement of the March 2020 quarter Business Activity Statements, the ATO will automatically apply a credit to the entities Running Balance Account in the amount of the PAYG tax withheld reduction from 28 April 2020.
• The ATO has advised that where these credits result in an entity having a net refundable amount, refunds will be paid within 14 days to the entity’s nominated bank account.
• For employers with monthly Activity Statement lodgements, the March 2020 credit will be calculated at three times the rate, to cover for the January and February months.

Monthly BAS Lodgement Example:

• A business which employs staff, lodges monthly BAS’s.  All staff are on salary, and a monthly PAYGW of $15,000 is declared each BAS.
• On the March 2020 BAS, the $15,000 is claimed in W2.  The ATO will automatically apply a credit in the Running Balance Account of $45,000 ($15,000  January BAS, $15,000 February BAS and $15,000 March BAS).
• On the April 2020 BAS, the $15,000 is claimed in W2.  The ATO will automatically apply a credit of $5,000, being the balance of the amount receivable under the announcement.
• On the May and June 2020 BAS’s, the $15,000 is claimed each month. There will be no credit to the Running Balance Account in these months as your entity has already “received” the maximum allowable benefit.
  

ATO Relief – Tax Payment Deferral Options

• Deferring by up to four months the payment date for BAS amounts due (including PAYG installments), income tax assessments, FBT assessments and excise.
• Allowing businesses to vary PAYG installment amounts to zero for the March 2020 quarter; businesses that vary their PAYG installment to zero can also claim a refund for any installments made for the September 2019 and December 2019 quarters.
• Remitting any interest and penalties, incurred on or after 23 January 2020, that have been applied to outstanding tax liabilities.
• Working with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans, and
• Allowing businesses on a quarterly reporting cycle to opt into monthly GST reporting in order to get quicker access to GST refunds they may be entitled to.