Forecasting

• Prepare a short-term cash flow forecast (3 months) broken down into weekly cash movements. Include assumptions such as a 20% and 40% drop in revenue.
• Identify the impact on your cash flow and consider potential strategies to adopt around costs savings, and protecting and growing revenue.
• Work with your BlueRock advisor to quickly ascertain your situation
  

Cash flow

• Know your cash flow position.
• Consider how your product mix and sales strategy may need to change to reduce the impact of, or take advantage of, current conditions.
• Revisit your marketing plan and strategy to investigate low to promote your business in low-cost way.
• Eliminate all non-essential or discretionary expenditure.
• Reduce your labour costs – refer to the Staff section below.
• Consider your operating hours to reduce the running costs of your business.
• Discuss reducing or deferring rent with your landlord.
• Discuss converting your debt to interest-only with your bank or seeking a repayment holiday.
• Review cash flow relief and support options provided by the ATO and SRO.
• Identify other options for short-term sources of finance.
• Reduce stock levels.
• Sell surplus assets that do not have debt attached to them.
• Consider payment plans or deferral for personal expenses such as school fees.
  

Staff

1. Speak to staff about short-term job sharing or moving to part-time employment rather than redundancies.
2. Consider short-term salary cuts for higher salaried employees.
3. Communicate with staff about your policy, expectations and interactions with clients and customers – Read our Coronavirus and the Workplace Article for more info on this topic.
4. Consider workflow planning should there be personnel disruptions, managing casual staff, and paying full-time wages while on leave.
5. Consider work-from-home requirements on a case-by-case basis.
6. Consider Fair Work requirements for employees that may have been exposed to the virus.
   

Debtors

• Offer discounts for payment.
• Agree to payment plans where required.
• Seek upfront payments for services where appropriate.
• Make sure your terms and conditions are structured adequately and protect your right to recover debts.
  

Suppliers

• Proactively communicate with key suppliers and delay payments or negotiate extended payment terms.
• Reduce the number of suppliers who are owed funds by clearing smaller debt as this will reduce the number of suppliers you may be required to negotiate with.
• Negotiate payment discounts.
  

JobKeeper Payment Scheme

The JobKeeper Payment Scheme is a wage subsidy operated by the ATO, which is paid to Businesses, Sole Traders, Businesses Without Employees, Not for Profits and Charities.

The Australian Government has announced huge changes to this scheme as a result of the stage 4 restrictions in Victoria and continuing economic impacts of COVID-19.

As a result, we've created a JobKeeper guide that summarises all the changes in a clear and concise way. Hopefully you find it helpful!

Guide to the Jobkeeper Scheme Changes – A Fair Work Focus

The implementation of the JobkeepKer scheme earlier this year has been the lifeline that employers and employees needed to assist with the relentless economic impacts of COVID-19.

As the initial period was set to expire on 28 September 2020, the Federal Government has passed the Coronavirus Economic Response Package (JobKeeper Payments) Amendment Bill 2020 which will have the effect of extending JobKeeper until 28 March 2021.

In addition, the bill extends the temporary JobKeeper provisions in the Fair Work Act with respect to:

• qualifying employers (who remain in JobKeeper) will retain access to the full range of temporary provisions (other than for annual leave payments);  
• legacy employers who suffer at least a 10% decline in turnover will retain access to modified measures provided they have previously been eligible for the JobKeeper scheme.  

New JobKeeper Rules Released on the 15th September

Extension Periods

JobKeeper 1.0 is scheduled to finish 28 September 2020. The extension provides two opportunities to extend the JobKeeper program.

• 28 September 2020 – 3 January 2021
• 4 January 2021 – 28 March 2021

To be eligible for JobKeeper payments under the extension, businesses and not-for-profits will still need to demonstrate a decline in turnover according to the following:

• 50 per cent for those with an aggregated turnover of more than $1 billion;
• 30 per cent for those with an aggregated turnover of $1 billion or less; or
• 15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).

Annual Leave Directives

The temporary JobKeeper enabling request powers that allow an employer to direct an employee to take paid annual leave (provided it does not reduce their annual leave balance to below two (2) weeks) will cease 28 September 2020.

An employer cannot direct an employee to take annual leave under this scheme past 28 September 2020.

If the employer has directed an employee to take annual leave in October 2020 and this is directed prior to 28 September do they have to take the annual leave?

No, under these provisions the requirement for any annual leave to be taken under a directive ceases on 28 September. Even if the directive was provided prior to 28 September, it cannot relate to annual leave after 28 September 2020

JobKeeper 2.0 is split into Qualifying Employers and Legacy Employers

What are ‘qualifying employers’ and ‘legacy employers’?

Qualifying employers are employers who are eligible for the JobKeeper scheme after 28 September 2020.

Legacy employers are employers who did receive one or more Jobkeeper payments in the period prior to 28 September 2020, but no longer qualify for the JobKeeper scheme after 28 September 2020.

Whether an employer is a qualifying employer, or a legacy employer has implications to the Temporary Employer Powers under the JobKeeper enabling requests and directions provided for under the Fair Work Act.

Impact on Employer Temporary Powers:

Quick refresh:

Part 6-4C was inserted into the Fair Work Act to give eligible employers powers to issue:

• JobKeeper ‘enabling directions’; and
• JobKeeper requests for employees to:

What is a “JobKeeper enabling direction”?

A “JobKeeper enabling direction” temporarily authorises an employer to:

• give a stand down direction to an employee to work fewer days or hours where the employee cannot be usefully employed for their ordinary days or hours because of a business change attributable to the COVID-19 pandemic or Government initiatives to slow down COVID-19 transmission; and
• give directions to employees to change their work duties (where the duties are within their skill and competency) or to perform duties at a place different from their normal place of work (including the employee’s home).

The effect of the “JobKeeper enabling direction” allow for a temporary variation to the employee’s terms of employment on a unilateral basis. This is a significant change where, in many circumstances, an employer has had no capacity to vary an employee’s employment agreement without their genuine consent.

Qualifying Employers

How has qualifying employer’s powers been impacted by the changes?

Qualifying employers will retain access to the full range of flexibility measures under Part 6-4C in the extended period, except for the annual leave provisions. The annual leave provisions will not apply following 28 September 2020.

What are the changes for stand down directions for a qualifying employer?

There are no changes with respect to stand down directions for qualifying employers. Qualifying employers can give a stand down direction to an employee who is entitled to a JobKeeper payment to the effect of reducing that employee’s ordinary hours, including to zero.

When can a stand down direction be implemented for a qualifying employer?

For qualifying employers, there are no changes to requirements, therefore the employer must:

• give an employee at least 3 days written notice of its intention to give a ‘JobKeeper enabling stand down direction’ or a lesser notice period if genuinely agreed between the employer and the employee; and
• consult with the employee or their representative about the a ‘JobKeeper enabling stand down direction’; and
• keep a written record of the consultation.

Legacy Employers

What are the implications for a legacy employer?

To have access to the modified enabling direction powers under the Fair Work Act (detailed below), a legacy employer must meet the 10% decline in turnover test.

What is the 10% decline in turnover test?

• After commencement (28 September 2020) and prior to 27 October 2020, a legacy employer must have a 10% decline in turnover certificate for the June 2020 quarter compared to the June 2019 quarter; 
• Between 28 October 2020 and 27 February 2021, a legacy employer must have a 10% decline in turnover certificate for the September 2020- quarter compared to the September 2019 quarter; and 
• Between 28 February 2021 and 28 March 2021, a legacy employer must have a 10% decline in turnover certificate for the December 2020 quarter compared to the December 20219 quarter. 

• The test is based on actual GST turnover, as opposed to projected GST turnover.

What are the requirements for a 10% decline in Turnover Certificate and when is required?

• If the business is a small business employer, they can choose to make a statutory declaration: 

• If the business is not a small business employer, a 10% decline in turnover certificate must be obtained in order to access the modified enabling direction powers.

• The certificate must relate to a specified employer and confirms that the employer satisfied the 10% decline in turnover test for the designated quarter applicable to a specified time.
• If the eligible financial services provider is also a director employee or associated entity of the employer or an associated entity of the employer, they cannot issue a 10% decline in turnover certificate in relation to the employer.  

Key information for Certificates:

Do legacy employers have access to the flexibilities under Part 6-4C?

Legacy employers will continue to have access to modified measures.  Similarly, like qualifying employers, the annual leave provisions will not be applicable after 28 September 2020.

What are the changes for stand down directions?

Legacy employers which meet the 10% turnover test and have the necessary certificate can issue a stand down direction to an employee who is entitled to a JobKeeper payment to the effect of reducing that employee’s ordinary hours to a minimum of 60% as they were at 1 March 2020. In addition, such direction may not result in the employee working less than 2 consecutive hours in a day.

What constitutes as ordinary hours?

• An employee’s ordinary hours are not the hours the employee did or did not work on 1 March 2020 specifically. Rather, ‘ordinary hours’ is the quantity of hours the employee is contracted to work, as set out in the employee’s industrial instrument or contract of employment. To be clear, ordinary hours does not include the specific days an employee might normally perform those hours, it is just the number of hours. 
• Ordinary hours are defined in the Fair Work Act for award and agreement free employees. For award or agreement covered employees, ordinary hours will be assessed according to the terms of the applicable instrument. For example, an employee’s ordinary hours as assessed at 1 March 2020 might be 38 hours per week. 
• This means employees of legacy employers will have a minimum guaranteed threshold of their pre-Coronavirus ordinary hours. 
• Casual employees do not have ‘ordinary hours’ because, by virtue of the nature of casual employment, they are free to accept or refuse work, and their employers are free to offer work or not. 
• We note that the employee cannot be directed to work less than 2 consecutive hours in a day on which the employee works. 

When can a stand down direction be implemented?

With respect to legacy employers, the employer must provide at least 7 days written notice (as opposed to 3 days for qualifying employers) and must consult with the employee or their representative during that period about the ‘JobKeeper stand down direction.’ Note, legacy employers have expanded consultation requirements compared to qualifying employers such as:

• provide information to employee or their representative about the proposed direction;
• invite the employee or their representative to give their views about the impact of the proposed direction on the employee
• during the notice period the employer must give prompt and genuine consideration to any views given by the employee or their representative.

What are the impacts on hourly wages?

Both qualifying and legacy employers must ensure that the employee’s base hourly rate of pay is not less than the base hourly rate of pay had the stand down direction not been given.

Can employees subject to standing directions obtain secondary employment?

The law has not changed with respect to this aspect. Employees subject to a stand down direction can request to engage in reasonable secondary employment, training or professional development.

Are there notification requirements for ceasing or continuing enabling directions for the second quarter?

Yes. Employers must notify employees as to whether JobKeeper enabling directions or agreements will cease or continue based on whether the employer has obtained a new certificate indicating that it has satisfied the 10% decline in turnover requirements for the relevant quarter. 

Does an employer have to renew pre-existing enabling directions if they remain eligible?

No, they will automatically carry over if the employer remains eligible to give that direction or make that agreement in those terms. 

Can an employer cease the enabling directions prior to the end of the extended period?

Yes, an employer and employee may terminate an agreement at any time with each party’s consent. 

Example – Legacy Employers

• 1 March – 30 June 2020

• 30 June – 27 September 2020

• 28 September 2020 – 28 October 2020

• 28 October 2020 – 27 February 2021

• 28 February 2021 – 29 March 2021

• Once the December 2020 quarter is complete, Samantha must again obtain a new 10% decline in turnover certificate for the December 2020 quarter.  
• She must again notify Matthew before 28 February 2021 that the JobKeeper enabling direction will not cease to apply to him on that date. If she does so, the direction can then continue to apply until the start of 29 March 2021.

• If in the September or December 2020 quarters the business recovers, and no longer satisfies the 10% decline in turnover test (and can therefore not get the certificate), Samantha will not be eligible to give her employees a JobKeeper enabling direction for the subsequent period (see new section 789GJE below).  
• She would need to notify Matthew before 28 October 2020 (if the gym no longer satisfies the 10% decline in turnover test for the September 2020 quarter) or before 28 February (if the gym no longer satisfies the test for the December 2020 quarter) that the JobKeeper enabling direction will cease to apply to him on that date (whichever applies).  
• Matthew’s base rate of pay under the Fitness Industry Award 2010 is $21.54 per hour, which cannot be reduced for his hours of work, regardless of the actual number of hours he works.

Please get in touch if you would like assistance in understanding your rights and obligations and wish to speak with our accounting or legal experts.

Here are the changes to JobKeeper as announced on 6 August 2020:

JobKeeper Employee Eligibility Criteria

• Relevant employment date:

• Age for eligible employees:

‍New JobKeeper Payment Rates

• $1,500 per fortnight for eligible employees and business participants will continue until 28 September 2020
• From 28 September this will reduce to $1,200 per fortnight, with a rate of $750 for those working fewer than 20 hours per week in the relevant reference period.
• From 4 January 2021 this will reduce to $1,000 per fortnight, with a rate of $650 for those working fewer than 20 hours per week in the relevant reference period.
• Reduced Rate:
• If an employee was employed as of 1 March 2020, work out the average number of hours the employee worked for the four-week period (2/2/20 to 29/2/20) and for the four-week period (3/6/20 to 30/6/20). The period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility.
• If an employee was not employed as of 1 March 2020 but was employed as of 1 July 2020 work out the average number of hours the employee worked for the 4 week period 3/6/20-30/6/20.

Business Turnover Tests

• From 28 September 2020, businesses and not-for-profits will be required to reassess their eligibility with reference to their actual GST turnover in the September quarter 2020 to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021.
• From 4 January 2021, businesses and not-for-profits will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in the December quarter 2020 to be eligible for the JobKeeper Payment from 4 January 2021 to 28 March 2021.
• Discretion to set out alternative tests that would establish eligibility in specific circumstances where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019, in line with the Commissioner’s existing discretion.
• The original discretion is noted below:
• The entity commenced business after the relevant comparison period (the business did not exist in that period) but not on or after 1 March 2020.
• The entity acquired or disposed of part of the business after the relevant comparison period (the business is not the same business in that period as it is now).
• The entity undertook a restructure after the relevant comparison period (the business is not the same business in that period as it is now).
• The entity’s turnover substantially increased by: 
• 50% or more in the 12 months immediately before the applicable turnover test period, or
• 25% or more in the 6 months immediately before the applicable turnover test period, or
• 12.5% or more in the 3 months immediately before the applicable turnover test period.
• The entity was affected by drought or other declared natural disaster during the relevant comparison period.
• The entity has a large irregular variance in their turnover for the quarters ending in the 12 months before the applicable turnover test period, excluding entities that have cyclical or regular seasonal variance in their turnover, or
• The entity is a sole trader or small partnership where sickness, injury or leave have impacted an individual’s ability to work which has affected turnover.
• Required turnover drops:
• 50% for those with an aggregated turnover of more than $1 billion
• 30% for those with an aggregated turnover of $1 billion or less
• 15% for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).
  

JobKeeper 2.0 - What can we expect?

As COVID-19 continues to have an impact, the Federal Government has announced both an extension and some updates to the scheme.

JobKeeper will continue to be available to eligible businesses (including eligible business participants) and not-for-profits until 28 March 2021.

• If you weren't previously eligible for JobKeeper but have just been forced to close your business as a result of stage four restrictions effective 5 August, you can apply now.
• JobKeeper will continue to be available to eligible businesses (including eligible business participants) and not-for-profits until 28 March 2021.
• From 28 September 2020, it was announced that eligibility for the JobKeeper Payment will be based on actual turnover in the relevant periods.
• We note legislation for JobKeeper 2.0 is not expected until late August.
  

JobKeeper Rates

Employees who were employed for less than 20 hours a week on average in the four weekly pay periods ending before 1 March 2020 will receive the lower payment rate.

Business Eligibility Turnover Test

Eligible businesses will have to suffer the requisite decline (no change to percentages) based on actual GST turnover (rather than projected GST turnover) to remain eligible:

• 50 per cent for those with an aggregated turnover of more than $1 billion;
• 30 per cent for those with an aggregated turnover of $1 billion or less; or
• 15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities)

Timing of Payments

The Commissioner will have discretion to extend the time an entity has to pay employees in order to meet the wage condition, so that entities have time to first confirm their eligibility for the JobKeeper payments.

Employee Eligibility

Existing eligibility rules for employees remain unchanged. 

FAQ

FAQ – JobKeeper Rates

1. When do I test for a part timer?
2. It is based on average hours worked per week in the four weeks of pay periods before 1 March 2020. Effectively, for the month of February 2020, did the employee or eligible business participant work an average of 20 hours or more per week?
3. What if the hours my employee or eligible business participant worked in February 2020 were not usual?
4. The Commissioner of Taxation will have discretion to set out alternative tests where an employee’s or business participant’s hours were not usual during the February 2020 reference period. For example, this will include where the employee was on leave, volunteering during the bushfires, or not employed for all or part of February 2020.
5. My employee was on maternity leave in February; how do I work out if they qualify for the higher or lower JobKeeper rate?
6. We note that employees currently in receipt of the government Paid Parental Leave Pay cannot receive JobKeeper payments at the same time.
7. The Commissioner will be providing further guidance where February does not provide an appropriate reference period.
8. My employee was on annual leave or personal leave during February so didn’t work an average of 20 hours per week but would normally do so, are they still eligible for the higher rate?
9. The Commissioner has advised there will be discretion to set out alternative tests where the employee’s hours were not usual during the February 2020 reference period.
10. If my employee worked less than 20 hours on average per week in the four weeks in February 2020, does this mean they don’t qualify for JobKeeper anymore?
11. No, it just means they will receive the reduced rate, being $750 or $650 per fortnight depending on the period.

FAQ – Employees and JobKeeper

1. One of  my eligible employees has resigned in June. I need to replace that person. Can the replacement employee be eligible for JobKeeper?
2. No, they will not be eligible as they were not employed in the business as of 1 March 2020.
3. One of my casual employees commenced with us on 19 May 2019. Will they be eligible at all for JobKeeper?
4. Unfortunately not as they need to have been employed for a full 12 months prior to 1 March 2020.
5. One of my eligible employees ceased employment with our business in June. Can I still receive the JobKeeper payments for them?
6. No, once the employment ceases you are required to notify the ATO via your Single Touch Payroll System and your monthly JobKeeper reporting that they have ceased and you will no longer receive payments for them.
7. Our business had suffered a decline in turnover but not enough to initially be eligible for JobKeeper. As such, we had not been using our casual employees who have been with the business for more than 12 months prior to 1 March 2020. In July, we have met the drop in turnover test. Can we now bring back our casual employees and are they eligible for JobKeeper?
8. Provided a casual had been employed for at least 12 months as of 1 March 2020, on a regular and systematic basis, they will be eligible for JobKeeper now that you are enrolling.

FAQ – Eligible JobKeeper Business Participants

1. Are eligible business participants eligible for JobKeeper 2.0?
2. Yes, eligible business participants will continue to be eligible for JobKeeper 2.0, provided they met the initial eligibility criteria and the business meets the turnover test.
3. The scheme advises that an eligible business participant needs to be ‘actively engaged’ in the business. What does this mean?
4. We are waiting on the legislation to provide further guidance regarding this.

FAQ – Turnover Rules for JobKeeper

1. To be eligible for the period 28 September 2020 to 3 Jan 2021, do I need to demonstrate an actual drop in GST turnover for both the June 2020 Quarter and the September 2020 quarter?
2. Yes, it is a requirement that you meet the actual drop in turnover test for both previous quarters.
3. To be eligible for the period 4 Jan 2021 to 28 March 2021, do I need to demonstrate an actual drop in GST turnover for all of the June 2020 quarter, the September 2020 quarter and the December 2020 quarter?
4. Yes, it is a requirement that you meet the actual drop in turnover test for all three previous quarters.
5. Our business lodges their activity statements monthly; how does the turnover test work for us?
6. To test the June quarter, you will need to add each of the months of April, May and June together and it will be the total that is the relevant figure.
7. Are the alternative tests still available, such as those for high-growth businesses, or recently commenced businesses in JobKeeper 2.0?
8. At this stage, nothing has been released to confirm this. We are waiting on the legislation to hopefully provide further guidance in relation to alternative tests.

FAQ – Timing of JobKeeper Eligibility

1. I haven’t been eligible previously; can I still access the JobKeeper program?
2. The JobKeeper payment will continue to remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.
3. I didn’t qualify for JobKeeper 1.0. Can I still qualify for JobKeeper 2.0?
4. In order to be eligible for JobKeeper 2.0, you would need to meet the 'drop in turnover' test for the June 2020 quarter. If you met the drop in turnover test for the June quarter, you should already be enrolled.
5. If you don’t pass the drop in turnover test for the June 2020 quarter, you will be unable to qualify for JobKeeper 2.0 when it begins at the end of September.
   

Guide to the JobKeeper Payment Scheme - 09 April 2020 

Guide to the JobKeeper Payment Scheme - 10 April 2020 - Hint: this guide contains vital updated information around payment of the JobKeeper subsidy and information on non-employee eligibility criteria like sole traders and directors! 

If you'd like assistance with applying and managing your JobKeeper obligations please contact a BlueRock adviser today. 

JobKeeper Payment Scheme Enrolment & Application Process (Phase 1 - we will update this for 2.0 as more information comes to light)

The first stage of the JobKeeper Payment Scheme has already closed. There were two stages to this process: enrolment and reporting. Enrolment (stage 1) opened on 20 April 2020.

It was announced that the deadline for JobKeeper enrolments has been extended from 30 April 2020 until 31 May 2020; however, payments for the first two JobKeeper fortnights are required to be made by 8 May 2020.

If you've been struggling to get on top of everything, this means you'll have some more time and still be able to claim payments for the fortnights in April and May, provided you meet all the eligibility requirements for each of those fortnights. This includes having paid your employees by the appropriate date for each fortnight.

For the first two fortnights (30 March - 12 April, 13 April - 26 April), the ATO will accept the minimum $1,500 payment for each fortnight as being paid by the employer, even if it has been paid late, provided it is paid by 8 May 2020. If the employer does not make this payment to staff by this date, they will not be able to claim JobKeeper for the first two fortnights.

Companies with eligible employees – open

Sole trader and other entities – open

For eligible participants in the scheme, during the enrolment you will need to provide your bank account details. If you have eligible employees you will need to advise the number of eligible employees.

The second stage is the Monthly Reporting Stage which opens on 4 May 2020.

Companies with eligible employees will be required to identify eligible employees either by:

• selecting employee details that are prefilled from their STP pay reports (if they report payroll information through an STP enabled payroll solution) or
• manually entering employee details in ATO Online services for agents or the Business Portal (if they do not use an STP-enabled payroll solution).

The ATO has advised that it will remit funds to employers for all eligible employees after receiving the application.

Eligible Business Participant

Your non-employee individual is an eligible business participant of your entity for the fortnight if they meet all of the following:

They are an individual not employed by your entity.

They are actively engaged in the business carried on by your entity (at 1 March 2020 and for the fortnight you are claiming).

They are one of the following (at 1 March 2020 and for the fortnight you are claiming)

• a sole trader
• a partner in the partnership
• an adult beneficiary of the trust
• a shareholder or director in the company.

Eligible business entities

Your entity is eligible if:

on 1 March 2020, it carried on a business in Australia

it satisfies the 'fall in turnover' test for the relevant period

it satisfied certain conditions as at 12 March 2020, being  

• a 2018–19 income tax return showing that it had an amount included in its assessable income in relation to it carrying on a business, or
• an activity statement or GST return for any tax period that started after 1 July 2018 and ended before 12 March 2020 showing that it made a taxable, GST-free or input-taxed sale.
  

Note: A discretion to give further time after 12 March 2020 may apply in limited circumstances such as if you did not have a requirement to lodge your 2018-2019 return until after 12 March 2020, or you have deferred your lodgement under an extension of lodgement date the ATO initiated.

Sole Trader & Other Entity Monthly Reporting

Each month, you must reconfirm your reported eligible employees and eligible business participant. If your eligible employees change or leave your employment, you will need to notify the ATO through this monthly declaration.

You must also provide information as to your current and projected GST turnover. This is not a retest of your eligibility, but rather an indication of how your business is progressing under the JobKeeper Payment Scheme.

Employer Obligations

• Demonstrate that your business has or will experience the applicable turnover decline.
• Apply using the ATO application process and register your business.
• Notify your employees in writing if they are eligible for the JobKeeper payments.
• Each eligible business participant and eligible employee must complete the ATO approved form.
• 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 and have been nominated to the ATO in writing.
• Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

Intending on giving your eligible employees a JobKeeper Enabling Direction or JobKeeper Enabling Request?

The new Part 6-4C inserted into the Fair Work Act now gives employers temporary powers to issue:

‘Jobkeeper enabling directions’; and

'Jobkeeper enabling requests' for employees to:

• work reduced days or alternative hours of work;
• take accrued annual leave and agreements to take annual leave at half pay.

What is a “Jobkeeper enabling direction”?

A “Jobkeeper enabling direction” can only be given by an eligible employer to an eligible employee, where both qualify for the JobKeeper Payment Scheme.

A “Jobkeeper enabling direction” temporarily authorises an employer to:

• give a stand down direction to an employee to work fewer days or hours (including nil) where the employee cannot be usefully employed for their ordinary days or hours because of a business change attributable to the COVID-19 pandemic or Government initiatives to slow down COVID-19 transmission; and
• give directions to employees to change their work duties (where the duties are within their skill and competency) or to perform duties at a place different from their normal place of work (including the employee’s home).

What is a “Jobkeeper enabling request”?

A “Jobkeeper enabling request” authorises an employer to:

• request an employee perform their duties on different days or at different times (provided that it does not reduce their ordinary hours of work); or
• request an employee take paid annual leave (provided it does not reduce their annual leave balance to below two (2) weeks).

Communicate Legal Employment Changes to Your Staff With These Affordable JobKeeper Templates

The following templates are available to help you communicate JobKeeper updates with your staff:

1. JobKeeper Enabling Stand Down Direction (to reduce an eligible employee's hours, including to nil)
2. JobKeeper Enabling Direction – Alternative Duties (to change an eligible employee’s usual work duties)
3. JobKeeper Enabling Direction – Change of Location (to change an eligible employee’s usual place of work)
4. JobKeeper Enabling Request – Different Hours/Days (to change an eligible employee’s days or work hours, compared to their usual hours/days. This arrangement does not reduce their ordinary hours).
5. JobKeeper Enabling Request – Paid Annual Leave
6. Notification of termination and redundancy

Cost: $200+GST or $750+GST for all 6 templates

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 Payment from another employer
  

If your employees have multiple employers, they can usually choose which employer they want to nominate through. However, if your employees are long-term casuals and have other permanent employment, they must choose the permanent employer and cannot nominate you.

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 Scheme

1. 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.

2. 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.

3. Is superannuation payable on the JobKeeper Subsidy Scheme?

• 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.

4. 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.

5. 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.

6. 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.

7. Are casuals eligible for the payment?

• If the casual has been employed with the employer for 12 months or more they will be eligible for the payment.

8. 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.

9. When does it apply?

• Payments will be paid from the second week of May with payments backdated to the 30 March 2020.

10. 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.

11. Can an employee access both the Centrelink benefits and the JobKeeper Payment Scheme at the same time?

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

12. 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 Payment from one employer

13. When does an employer need to notify an employee they will be entitled to the JobKeeper Payment? 

• The employer must notify an individual employee in writing that they are eligible. Once the nomination form has been completed, the employer can register the employee via Single Touch Payroll. Once registered via Single Touch Payroll, it is a requirement that the employer notifies the employee within 7 days that the employee and employer are eligible and they have been registered.

14. When do I need to notify the ATO that we elect for our business to participate in the JobKeeper Payment Scheme?

• For an entitlement arising in the first (30 March –12 April) or second JobKeeper fortnight (13 April – 26 April) you must notify the ATO by 30 May.

15. Are partnerships eligible for the Jobkeeper Payment? 

• Yes, if the eligibility criteria set out earlier is met. However, only one partner can be nominated to receive the JobKeeper Payment. All eligible employees of the partnership will also be entitled to the JobKeeper Payment if they meet the criteria, noting a partner cannot be an employee.

16. Are company directors that receive director fees eligible for the Jobkeeper Payment? 

• Yes, if the eligibility criteria set out earlier is met. However, only one director can be nominated to receive the JobKeeper Payment and that individual may not receive the payment as an employee. All eligible employees of the company will also be entitled to the JobKeeper Payment if they meet the criteria.

Did You Know That JobKeeper Audits May Be Covered By Your Insurance?

Good news! If you're a client of BlueRock Accounting and you use our audit insurance product, Audit Shield, then future JobKeeper audits and reviews are covered by your existing insurance. If you're a BlueRock Accounting client but are yet to sign up to Audit Shield, it may be worth exploring to save a lot of stress in the event of an audit. Feel free to get in touch with Adam Gibbins, our Director of General Insurance, if you have any questions.

Income Support For Individuals & Sole Traders

• Two $750 stimulus payments are available 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 is establishing a new time-limited Coronavirus Supplement to be paid at a rate of $550 per fortnight for the next 6 months on top of existing entitlements.  
• The Coronavirus Supplement will be paid to both existing and new recipients of the JobSeeker Payment Scheme, 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 Coronavirus 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 to apply for the JobKeeper Payment Scheme. 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 nominated bank account.

Income Support for Businesses

Business Support Fund

• The Victorian Government Business Support Fund has been extended to include an additional $5,000 for employing businesses in metropolitan Melbourne and Mitchell Shire in recognition of spending longer under restrictions (in addition to the $5,000 expansion).
• Employing businesses in regional local government areas (except Mitchell Shire) that will shut down under stage three restrictions can now also apply for the $5,000 grant.
• If you have previously received or applied for the $5,000 expansion grant, you don't need to re-apply - payment will be processed automatically.
• For new applicants, applications for the program will be extended until 14 September 2020.

Tourism Accommodation Support Program

• The return to Stage 3 Stay at Home restrictions means some residents within these hot zones will have to cancel travel bookings to regional Victoria during the period, placing additional strain on accommodation providers.
• Accommodation providers in regional Victoria impacted by these cancellations will be able to apply for direct financial support of up to $225 per booking per night through the new Tourism Accommodation Support Program.
• At present, businesses can register their interest and more details will be available soon.
• There will also be some marketing support for campaigns for travel between the regions when restrictions ease.
  

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 that when your employees 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

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

WorkSafe

Employers are now required to notify WorkSafe immediately when a worker tests positive for Coronavirus and to complete the written notification form within 48 hours.

When to Notify

• Immediately after becoming aware that:
• an employee, independent contractor, employee of the independent contractor or self-employed person has received a confirmed diagnosis of coronavirus (COVID-19) and;
• the employee, independent contractor, employee of the independent contractor or self-employed person has attended the workplace within the relevant infection period.

How to Notify

• Option A: Complete the COVID-19 reporting form   

OR

• Option B: Call WorkSafe on 13 23 60
• WorkSafe will then record details of your incident and send you an email with a unique link for you to complete the last stage of notifying us of the full details in writing. It is mandatory that you complete the full details in writing within 48 hours.
  

Apprentice Relief

Apprenticeship Wage Subsidy

• The Federal Government is extending and expanding the Supporting Apprentices and Trainees wage subsidy to include medium-sized businesses who had an apprentice in place on 1 July 2020, for wages paid from 1 July 2020 to 31 March 2021.
• Eligible employers can apply for a wage subsidy of 50% of an eligible apprentice or trainee’s wages paid until 31 March 2021.
• Subsidies will also be available to any new employer who re-engages an eligible apprentice that was displaced by an eligible small or medium-sized business.

• The government has introduced a wage subsidy to support small businesses to retain their apprentices and trainees.  Businesses may be eligible to receive 50% of their apprentice’s wages, capping at $21,000 per apprentice, for the 9 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.
• Please note that if the employer is in receipt of the JobKeeper Payment for the relevant apprentice, they are not entitled to the apprentice relief.
  

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. 

To be eligible for early release of superannuation you must be either have:

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% or more, or if you were a sole trader had your business suspended or experienced a reduction in your turnover of 20% 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 3 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 Drawdown Rates

The government is temporarily reducing the superannuation minimum drawdown 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.

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% and the lower deeming rate will be 0.25%.

Bank Care Package

• The Australian Banking Association (ABA) and the major banks have confirmed they are implementing a new phase of support as of July 2020 for customers impacted by the COVID-19 pandemic.
• Initially, the ABA had announced a relief package that included a deferral of principal and interest repayments for all mortgages, term loans and retail loans for 6 months for small business customers with less than $3 million in total debt owed to credit providers.
• While many of the 800,000 bank customers who had deferred their repayments have already begun repaying their loans following an initial three-month hiatus, many more will look to do so at the end of their six-month deferral period (the maximum term allowed under the previous COVID-19 support package). However, following discussions with APRA and ASIC to provide the appropriate regulatory treatment (and with interim authorisation granted by the ACCC), the banks have now agreed to extend this support package on a case-by-case basis for customers who require it.
• Customers with reduced incomes and ongoing financial difficulty due to COVID-19 will be contacted by their banks and, if they cannot return to repayments or restructure/vary their loan (for example by extending the length of the loan or converting to interest-only repayment for a period of time) to support their current financial situation, they may be able to extend their repayment deferral by another four months.
• 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

SMEs can now loan up to $1M as the government extends its COVID-19 loans scheme

The Federal Government has also announced plans this week to extend its small business COVID-19 loans scheme until June next year.

On 1 October 2020, the following changes will come into effect:

• Loans will be provided for purposes other than working capital
• Secured loans (i.e. where collateral is presented) will be permitted in addition to unsecured loans
• The maximum loan size will increase four-fold to $1 million, up from $250,000 per borrower
• The maximum loan term will increase to five years, up from three years
• Lenders will have additional discretion to offer repayment holidays.

As with any loan, it's important that businesses have a solid strategy for repaying the debt with confidence. We recommend reaching out to our BlueRock Finance team to plan a path forward and for help liaising with the banks.

Get in touch with the BlueRock Finance team to find out more.

Coronavirus SME Guarantee Scheme

• This scheme is designed to provide working capital support to SMEs (businesses with a turnover of less than $50 million) to get through the impact of the coronavirus.
• Under the scheme, the Federal Government will guarantee 50% 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 commenced 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

There have been some updates to the payroll tax concessions available across the country. This latest update was announced on 10 July.

• Eligible businesses with payrolls up to $10 million can defer their liabilities for the first half of the 2020-21 financial year. Please note that this is only a deferral; not a waiver as had been the case previously.

Below is a summary of the latest developments as of 7 April 2020.

• Full payroll tax refunds for the 2019-20 financial year are available to small and medium-sized businesses with taxable wages of less than $3 million per member entity of a group.
• Payments should now have been refunded 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 3 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 4-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 businesses will need to apply to the OSR for the waiver.

Queensland

• The QLD Government has announced additional payroll tax relief measures in addition to the deferral of March to June payroll tax returns until 3 August 2020.
• All businesses specifically impacted by COVID-19 will be refunded 2 months’ worth of payroll tax, and
• Small and medium enterprise businesses will be given a 3-month payroll tax holiday and a further 6-month payroll tax deferral.

South Australia

• The SA Government is offering a 6-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 6 months on the 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 3 months of April, May and June 2020.
  

ATO Relief – PAYGW Refunds

• These tax-free payments are to help businesses cover employee wages and apply 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 6-month period. The minimum amount an employer will be able to receive is $10,000, up to a maximum of $50,000 for this period.
• An additional payment is also being introduced in the July to October 2020 period equal to the total of the PAYG withheld refunded in the previous 6 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 2 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.
• The 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 that 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

• Businesses can defer by up to 4 months the payment date for BAS amounts due (including PAYG installments), income tax assessments, FBT assessments and excise.
• Businesses can 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.
• Businesses can remit any interest and penalties, incurred on or after 23 January 2020, that have been applied to outstanding tax liabilities.
• The ATO will work with affected businesses to help them pay their existing and ongoing tax liabilities by allowing them to enter into low-interest payment plans
• The ATO will allow 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.