With many Australian businesses a long way from returning to ‘normal’ the Federal Government has extended the JobKeeper Payment scheme, commonly referred to as JobKeeper 2.0.  As many of you will be aware, the JobKeeper payment, which was originally due to run until 27 September 2020, will now continue to be available to eligible businesses (including the self-employed) and not-for-profits until 28 March 2021.

Effectively, there will be two separate extension periods for the JobKeeper payment, these being:

• Extension period 1 – which covers the seven new JobKeeper fortnights that commence on 28 September 2020 and end on 3 January 2021; and
• Extension period 2 – which covers the six new JobKeeper fortnights that commence on 4 January 2021 and end on 28 March 2021.

In addition to the separate extension periods, a two-tiered payment system will apply based on hours of work or active engagement.  With further changes announced to expand the eligibility criteria and adjustments to the new ‘Decline in Turnover’ tests applicable from 28 September 2020, JobKeeper 2.0 represents a targeted support package for those businesses still significantly impacted by COVID-19.

We will now examine the new ‘Decline in Turnover’ tests, the extended JobKeeper payment rates and expanded eligibility criteria in more detail.

The ‘Decline in Turnover’ Tests

From 28 September 2020, businesses and not-for-profits seeking to claim the JobKeeper Payment will be required to demonstrate they have suffered an ongoing decline in turnover using actual, rather than projected, GST turnover.  Further, the manner in which sales are allocated to the relevant quarter, must be done consistently with how sales are reported for BAS purposes, if the business is registered for GST.  Accordingly, businesses using an accrual basis for reporting GST, for example, must use an accrual basis for providing evidence of a decline in turnover.

Specifically, to be eligible for the JobKeeper payment Extension Period 1 (ie. from 28 September 2020 until 3 January 2021) businesses and not-for-profits will be required to reassess their eligibility with reference to their actual GST turnover in the September 2020 quarter.  Businesses will need to demonstrate their actual GST turnovers in the September 2020 quarter have decreased (in accordance with the applicable rates) relative to the September 2019 quarter, unless an alternative period has been determined by the Commissioner.

From 4 January 2021, businesses and not-for profits will further reassess their turnover to be eligible for the JobKeeper payment.  To be eligible for the JobKeeper payment Extension Period 2 (ie. from 4 January 2021 to 28 March 2021) businesses only need to demonstrate an applicable decline in turnover in the December 2020 quarter relative to the December 2019 quarter, unless an alternative period has been determined by the Commissioner.

Alternative tests for determining an actual decline in turnover will be available in some circumstances and further guidance regarding alternative tests will be provided in due course.  Please refer to our website for up to date information.

 To be eligible for JobKeeper Payments under the extension, businesses and not-for-profits will still need to demonstrate they have experienced a decline in turnover of at least:

• 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;
• 15 per cent for Australian Charities and Not for profits Commission-registered charities (excluding schools and universities).

If a business or not-for-profit does not meet the additional turnover tests for the extension period, this does not affect their eligibility prior to 28 September 2020.

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.

The Extended JobKeeper Payment Rates

From 28 September 2020 to 3 January 2021, the JobKeeper Payment rates will be:

• $1,200 per fortnight for all eligible employees who, in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, worked in the business or not-for-profit for 80 hours or more, and for eligible business participants who were actively engaged in the business for 80 hours or more in the month of February 2020; and
• $750 per fortnight for other eligible employees and business participants.

From 4 January 2021 to 28 March 2021, the JobKeeper Payment rates will be:

• $1,000 per fortnight for all eligible employees who, in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, worked in the business or not-for-profit for 80 hours or more, and for business participants who were actively engaged in the business for 80 hours or more in the month of February 2020; and
• $650 per fortnight for other eligible employees and business participants.

Businesses and not-for-profits will be required to nominate, and also to notify (the Commissioner and the individual), which payment rate they are claiming for each of their eligible employees (or business participants).

Please note that the total worked hours for an employee includes their total hours of work, paid leave and public holidays.  An employee only needs to satisfy the 80 hour requirement in respect of one reference period where both reference periods (i.e. pre-1 March 2020 and pre-1 July 2020) apply.

Further, a business participant must make a declaration to the entity (or in the case of a sole trader, to the Commissioner) that they had actively engaged in the business for at least 80 hours during the reference period.

The JobKeeper Payment will continue to be made by the ATO to employers in arrears.  Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper Payment (before tax), based on the payment rate that applies to each employee.  This is referred to as the wage condition.

Expanded Eligible Employee Definition for JobKeeper

Additional recently implemented JobKeeper changes mean more employees will qualify for JobKeeper payments from 3 August 2020.

This is primarily because:

• the eligible employee test has been extended from 3 August 2020 to include eligible employees who were employed on 1 July 2020 (in addition to the original 1 March 2020 employment date) who are not currently nominated for the JobKeeper Payment by another entity; and
• from the fortnights commencing on 3 August 2020 and 17 August 2020 (i.e., JobKeeper fortnights 10 and 11) employers will have had until 31 August 2020 to meet the ‘wage condition’ for all new eligible employees included in the JobKeeper scheme under the 1 July eligibility test.

Importantly, as a result of these recent tweaks to the JobKeeper scheme, participating employers should have provided any new eligible employees with an employee nomination form.

The onus is on employers to ensure all of their employees now eligible for JobKeeper Payments as a result of the new 1 July test are given the opportunity to be included.

Information concerning JobKeeper 2.0 is released regularly, so please refer to our website for the most up to date information.

Should you wish to discuss the implications of these JobKeeper 2.0 extensions and adjustments, and your business’s eligibility please contact our office.

The JobKeeper provisions in the Fair Work Act were extended recently along with the passing of the JobKeeper 2.0 legislation.  These extended provisions take effect from 28 September 2020 and include some changes for employers.

The extended provisions allow qualifying and legacy employers to continue to access temporary Fair Work Act provisions for a further six months, until 28 March 2021.  For qualifying employers, those employers whose businesses are eligible for JobKeeper 2.0, access to these provisions allows for increased flexibility to help manage their business and their employees.

A significant change to the provisions include the recognition of legacy employers.  Legacy employers are those businesses that previously qualified for JobKeeper but are now unable to qualify for JobKeeper 2.0, and have suffered a 10% decline in turnover for the relevant test quarter.

Notably, legacy employers must have a ‘10 per cent decline in turnover certificate’ confirming, based on the information provided, that the specified employer satisfies the 10 per cent decline in turnover test for the designated quarter.  These ‘certificates’ must be provided by an eligible financial service provider.  Alternatively, for small business employers with less than 15 employees a statutory declaration can be provided.  Please note that Kelly & Associates can assist clients with the provision of a certificate or statutory declaration as appropriate.

Importantly for employers, these temporary Fair Work Act provisions enable qualifying employers and legacy employers to:

• change an eligible employee’s usual duties
• change an eligible employee’s location of work
• agree with an eligible employee to change their days and times or work; or
• reduce an eligible employee’s hours or days of work in certain circumstances.

Any agreements that legacy employers already have in place will effectively end on 27 September 2020.  All legacy employers will need to reissue or make new directions and agreements with their employees.

Currently, the Fair Work JobKeeper provisions also allow a qualifying employer to make agreements with their employees to take annual leave (including at half pay).  However, from 28 September 2020, these provisions will stop applying and employers will no longer be able to make such agreements under the provisions.

Please contact our office if you require any further assistance regarding these provisions or if you require a 10 per cent decline in turnover certificate or statutory declaration.

Superannuation Contribution Deadlines—Beware!

Despite the difficult economic situation of recent months, we remind employers of the need to meet their ongoing super guarantee obligations for their employees.  Due dates for employer contributions remain unchanged with the next June quarter contribution due by 28 July 2020.

We also remind employers that superannuation contributions are only considered to be paid for the purpose of claiming a tax deduction once they have been received by the super fund.  If you wish to claim a tax deduction for your contributions in the 2019/20 financial year, payments must be received by employee super funds by 30 June.  To meet this deadline you will need to make the payment well in advance to allow processing time, particularly if there is a clearing house involved.  The ATO Small Business Superannuation Clearing House (SBSHH) recently announced that they must accept payments by 23^rd June to ensure payments reach super funds on time.

Whether meeting the 30 June deadline for tax deductibility or the quarterly due date required for super guarantee contributions, we recommend that employers make their super payments 10 days prior to the relevant deadline.

Superannuation Guarantee and JobKeeper

We also advise that amendments have been released to ensure employers are not subject to additional superannuation guarantee obligations by participating in JobKeeper.

Superannuation Guarantee (Administration) Amendment (JobKeeper Payment) Regulations 2020 has now been registered, setting out that superannuation guarantee payments will only be required to be paid to an employee for the performance of work.

The regulations specify that employers are not required to make contributions for top-up payments to satisfy the wage conditions for JobKeeper payments.  For example, where an employee earns her usual wages of $1,000 per fortnight, and her employer pays an additional $500 per fortnight to meet the wage condition for JobKeeper, the additional payment of $500 is excluded from being salary or wages and is not subject to additional superannuation guarantee obligations.

Early Release of Super due to COVID-19

Clients who are experiencing financial stress as a result of the COVID-19, may be able to access some of their superannuation money early.   Individuals who meet eligibility criteria will be allowed to access up to $10,000 from their superannuation in 2019/20 and a further $10,000 in the 2020/21 financial year.

Funds accessed under the early release measures are tax free and will not affect Centrelink or veteran’s payments.

Applications for the 2019-20 financial year opened on April 20 and close on 30 June 2020.   In relation to the 2020/21 year, applications can be lodged between 1 July 2020 and 24 September 2020. 

Clients can apply online through myGov however we recommend that you contact our office to discuss the eligibility criteria and the suitability of this measure to your circumstances.

The $150,000 instant asset write-off has now been extended until the end of the year as the government looks to encourage businesses to invest further in assets.  Businesses with an aggregated annual turnover of less than $500 million are eligible for an expanded instant asset write-off for asset investments of up to $150,000.  The threshold applies on a per asset basis, so businesses can immediately write-off multiple assets, provided each asset costs less than $150,000.  The announcement applies to new or second-hand assets first used or installed ready for use from 12 March 2020 until 31 December 2020. Legislation to give effect to the extension will be introduced to Parliament shortly.

Also from 12 March 2020,  businesses with turnover less than $500 million (not otherwise using the instant asset rules) will be able to access a 15-month investment incentive via an accelerated depreciation deduction.  Eligible businesses will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.  This measure applies until 30 June 2021.

With the 2020 tax season commencing in July and current medical advice recommending limited adult contact, we advise that we will not be conducting individual tax appointments in our office during the next few months.  Instead we will be offering a remote service and encourage you to contact our office if you require a remote consultation with your accountant, either via Zoom or telephone.

To assist with the electronic approach to tax preparation this year, we have provided a complementary Tax Data Organiser and an Individual Tax Return Checklist that you might like to use to help gather and compile your tax information.  The ATO website also provides some helpful deduction guides that are specific to particular occupations and industries: https://www.ato.gov.au/Individuals/Income-and-deductions/Occupation-and-industry-specific-guides/

This tax season information can be forwarded to us in the mail or via email direct to your accountant or reception@kellyassoc.com.au   Alternatively, you may upload your information to the client portal and we have provided instructions for this process below.

Please note that as circumstances and medical advice changes we will review our current remote appointment policy.  We will update our website with any changes in our policy or alternatively please contact our office to check if appointments are available.

We thank you for your patience and understanding as we try to ensure the safety of all clients and staff.

Uploading your Tax Information to the Client Portal

Uploading your tax documents to the client portal is a simple and secure way to share your information with us!

Simply log in to the client portal as you usually would and enter the relevant portal area.

From the ‘document listing’ page, open the ‘upload manager’ (the upwards facing arrow shown above) located in the top right hand corner of the page, choose ‘select files’ and then ‘start’ to complete the transfer.

Please note that we will be automatically notified that you have sent your documents and that they are available for us to retrieve!

We also remind you that we have provided ‘client portal tips’ on our website to help with the process of retrieving and signing your tax returns.

If you need further assistance with the client portal please do not hesitate to contact us.

We are working hard to ensure we continue to meet our clients’ needs during this challenging time.   Currently, half our staff are in the office and the remainder are working from home.  We are continuing to encourage phone calls, email and Zoom meetings as our preferred forms of communication.  We will continue to maintain a record of all clients attending our office and practice social distancing measures.

Over recent months we hope you have found our communication and website helpful.  We encourage you to regularly review the website for further updates.

The Prime Minister Scott Morrison recently announced a $17.6 billion Coronavirus stimulus package for businesses and individuals.   There are four elements to the stimulus package, of which all clients should be aware:

1. Low income earners to receive $750 cash

A one-off payment of $750 will be paid to all social security, veteran and other income support recipients and eligible concession card holders.  This payment is tax-free and will not count as income for social security, household allowances and veteran payments.  A full list of eligible recipients is provided via the following link:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_households.pdf

The one-off payment will occur automatically from 31 March 2020 by Services Australia or the Department of Veterans’ Affairs.

2. Cash flow assistance for businesses

Supportive measures introduced to assist Australian businesses to manage cash flow challenges and retain employees include:

• Tax-free cash flow boost for employers.

Small and medium-sized businesses with a turnover of less than $50 million will receive up to $25,000 to help cover the costs of employee wages and salaries equal to 50% of the PAYG withheld.  The minimum payment is $2,000 with a maximum of $25,000 and will be available for businesses who lodge business activity statements for the March and June quarters.

Eligible businesses that withhold tax on employee salary and wages will automatically receive the payment.  This payment will be delivered by the ATO as a credit in the activity statement system from 28 April 2020 once businesses lodge their relevant activity statements.  Eligible businesses that pay salary and wages but are not required to withhold tax will also receive the minimum payment of $2,000.  For additional information regarding the timing of these payments please use the following link:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_businesses.pdf

• Apprentice wage subsidy.

Small businesses with fewer than 20 full-time workers will receive 50% of an apprentice or trainee’s wage for up to nine months from 1 January 2020 to 30 September 2020.  For each apprentice or trainee, the Government will provide up to a maximum of $7,000 in wage assistance per quarter. Where a small business is unable to retain the apprentice or trainee, the subsidy will be available to a new employer to re-engage an eligible apprentice or trainee.   It is proposed that employers will be able to register for the subsidy from early April 2020.  Final claims for payment must be lodged by 31 December 2020.

3. Boosted instant asset write-off and accelerated depreciation

Businesses with an aggregated annual  turnover of less than $500 million are eligible for an expanded instant asset write-off for asset investments of up to $150,000 (up from $30,000). The threshold applies on a per asset basis, so businesses can immediately write-off multiple assets.  The announcement applies to new or second-hand assets first used or installed ready for use from now until 30 June 2020.  The instant asset write-off is due to revert to $1,000 for small businesses (businesses with a turnover less than $10 million) from 1 July 2020.

Businesses with turnover less than $500 million will also be able to access a

15-month investment incentive by accelerating depreciation deductions.   These eligible businesses will be able to deduct 50% of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset’s cost.  Additional information regarding the criteria for an eligible asset can be found at:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Support_for_business_investment.pdf

4. Assistance for severely affected regions

The Government has also announced a $1 billion fund to support regions and communities most significantly affected by the Coronavirus outbreak.  Those industries disproportionally affected will include such industries as tourism, agriculture and education.

The ATO will provide administrative relief for certain tax obligations (similar to relief provided following the bushfires) for taxpayers affected by the virus outbreak, on a case-by-case basis.   Additional information for those regions severely affected by the outbreak can be found via the following link:

https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet-Assistance_for_regions.pdf

Additional Income Support

In addition to the stimulus package announced, people who are unable to attend work because they have been diagnosed with the Coronavirus or who are in isolation, may qualify for income support if they do not have any employer leave entitlements.   Additional information can be found on the Australian Government Services Australia webpage at https://www.servicesaustralia.gov.au/.  Our accountants are available to guide you through the process of accessing support should you need assistance.

Further Resources and Information

Please be aware of two links that will be particularly helpful for those clients who are employers and have questions in relation to employee entitlements and whether staff should or should not be in the workplace.  We have provided a link below to both resources.  In addition Fair Work is very helpful and they have a coronavirus hotline – 13 13 94.

https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/coronavirus-and-australian-workplace-laws#health-and-safety-information

https://www.health.gov.au/resources/collections/novel-coronavirus-2019-ncov-resources

The Andrews Government has set up a hotline for businesses needing information on dealing with new measures to tackle coronavirus, as well as details on support services. The number is 13 22 15.

Please feel free to contact our office if you would like to discuss any of the above information in more detail or if we can assist you further, either personally or professionally.

After 27th March 2020, you will no longer be able to use AUSkey to access the ATO business portal and other government online services. AUSkey will be replaced with myGovID and Relationship Authorisation Manager (RAM). MyGovID is a new and secure way to prove who you are online. RAM allows you to manage access to online services and authorise others who can act on behalf of your business.

You will need to use myGovID and RAM if you:

• use the ATO Business Portal
• use Access Manager
• access government online services using AUSkey or Manage ABN Connections like the Australian Business Register (ABR)
• have employees or authorise others to access government online services on behalf of your business

It is important to act now, before the 27th March deadline to continue to access online services. The principal authority (business owner or person listed on the ABR) must set up their own myGovID, link their business in RAM and authorise employees:

Step 1: Set up your myGovID

To set up and use myGovID, business owners and employees must have their own personal smart device (i.e. a mobile phone). Smart device minimum requirements are Apple ios10 or later and Android 7.0 (Nougat) or later.

• Download the myGovID app, available from the Apple App Store or Google Play.
• Set up your myGovID by entering your full name, date of birth and email address. Use an email address that belongs to you only and is not shared.
Employees should use a personal email address rather than a work based email address. MyGovID is specific to and remains with the individual, regardless of their employment.
• Add two Australian identity documents – for example, a passport, driver’s licence, medicare card and or birth certificate. It is important that your name matches with the name on the identity documents.

Step 2: Log in to RAM using your myGovID and link your business
You must be the principal authority (business owner or listed associate on the ABR) to link your business’s ABN to your myGovID:

• Before you link your business, check that your business details and individual associates (for example, individual trustees, directors and public officers) on the ABR are up to date, so RAM can use the correct information: https://abr.gov.au

Go to your web browser (this can be done on your computer), login to RAM using your myGovID:
https://info.authorisationmanager.gov.au

• Select Link my business to find your business or businesses and add the required information.

How to link if your business is a trust with a corporate trustee?

The ability to link your business requires the principal authority or business owner to be listed as an individual associate for the business (on the ABR). If the only listed associate of a business is another business (that is, not an individual) you will need to call the ATO to manually link.

Therefore, in the case of a trust with a corporate trustee, the principal authority must contact the ATO on 1300 287 539, select option 3 for RAM enquiries and be prepared with the following information:

• TFN & PAYG arrangements, if applicable (for the principal authority)
• ABN of the trust
• ACN of the trustee company

Step 3: Authorising employees and others in RAM

You can use RAM to authorise others to act on behalf of your business – for example, if you have employees who access the business portal on behalf of your business.

• Before you authorise staff, check they have set up their myGovID. You need to enter their legal name so it matches exactly with the name used in their myGovID and an email address only they can access.
• Login to RAM using myGovID: https://info.authorisationmanager.gov.au
• Select View or manage authorisations, machine credentials and cloud software notifications to authorise users. If you have multiple employees with AUSkeys, you can use the import AUSkey users function to create multiple authorisations at a time. If you need to customise someone’s access and permissions, you will be directed through RAM to Access Manager.

You’ve finished setting up!

You and your employees can now use myGovID to access the ATO Business Portal https://bp.ato.gov.au/

Select ‘Login with myGovID’ and enter your myGovID email address and use the myGovID app to verify it’s you.

NOTE: Using software to report
If you use desktop or locally hosted software (not cloud based software) you may need to undertake additional steps – your software supplier will guide you through this process. If you use cloud based Standard Business Reporting enable software, you don’t need to undertake additional steps – your software supplier will do this for you.

The superannuation guarantee amnesty bill has been passed by Parliament ensuring that employers will get six months to disclose historical non-compliance of superannuation payments.  This one-off amnesty aims to encourage employers to self-correct historical superannuation guarantee non-compliance.

Employers should be aware that as a result of Single Touch Payroll (STP), the ATO now has an ‘unprecedented level of visibility’ of superannuation information.  Any clients with a historical non-compliance of superannuation payments should make use of the amnesty to avoid severe penalties which would otherwise apply under voluntary disclosure (outside the amnesty period) or ATO detection.

All employers should be aware that late payment of the superannuation guarantee (i.e. payments failing to reach the employee’s superannuation fund by the due date) and underpayments are reasons for superannuation shortfalls and penalties will apply.

Please consider your superannuation guarantee compliance very carefully and contact our office if you require assistance to work through the issues involved.

The ATO is reminding businesses that are looking to expand or improve their business and thinking of buying new or second hand assets, that medium sized businesses with a turnover up to $50 million (but at least $10 million) are eligible for the instant asset write-off.

This now applies to assets that cost up to $30,000 and which were purchased and first used or installed ready for use from 7:30pm (AEDT) on 2 April 2019 to 30 June 2020.

Medium sized businesses may purchase and claim a deduction for each asset that costs less than the $30,000 threshold.

For assets over $30,000 the general depreciation rules apply (which may depend on the entity).