Last week the Federal Government, through the Treasurer, Josh Frydenberg, provided its Economic and Fiscal Update. As part of the update, the Treasurer announced some further measures that extend some of the Government Covid-19 support already in place, including:-
- An extension to the temporary early access to super until 31st December, 2020;
- Government underwriting of Small Business loans extended until 30 June, 2021;
- Extension of the Supporting Apprentices and Trainees Wages subsidy until 31st March, 2021; and
- JobKeeper Extension - detailed below.
EXTENSION OF JOBKEEPER - FROM OCTOBER VERY RESTRICTIVE CRITERIA APPLIES!
The JobKeeper payment was originally due to end on the 27 September 2020. It will now continue to be available to eligible businesses (including the self-employed) and not-for-profits until the 28 March 2021.
The payment rate of $1,500 per fortnight for eligible employees and business participants will be reduced to $1,200 per fortnight from 28 September 2020 and to $1,000 per fortnight from 4 January 2021. From 28 September 2020, lower payment rates will also apply for employees and business participants that worked fewer than 20 hours per week.
From 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper will be required to demonstrate that they have suffered an ongoing significant decline in turnover using actual GST turnover (rather than projected GST turnover).
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 June and September quarters 2020. They will need to demonstrate that they have met the relevant decline in turnover test in both of those quarters 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 further reassess their turnover to be eligible for JobKeeper. They will need to demonstrate that they have met the relevant decline in turnover test with reference to their actual GST turnover in each of the June, September and December quarters 2020 to remain eligible for JobKeeper from 4 January 2021 to 28 March 2021.
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 Commissioner of Taxation will have 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.
Businesses and not-for-profits will generally be able to assess eligibility based on details reported in the Business Activity Statement (BAS). Alternative arrangements will be put in place for businesses and not-for-profits that are not required to lodge a BAS (for example, if the entity is a member of a GST group).
As the deadline to lodge a BAS for the September quarter or month is in late October, and the December quarter (or month) BAS deadline is in late January for monthly lodgers or late February for quarterly lodgers, businesses and not-for-profits will need to assess their eligibility for JobKeeper in advance of the BAS deadline in order to meet the wage condition (which requires them to pay their eligible employees in advance of receiving the JobKeeper payment in arrears from the ATO).
The Commissioner of Taxation 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 JobKeeper.
The eligibility rules for employees remain unchanged.
The self‐employed will be eligible to receive JobKeeper where they meet the relevant turnover test, and are not a permanent employee of another employer.
Employees will continue to receive the JobKeeper payment through their employer during the period of the extension if they and their employer are eligible and their employer is claiming JobKeeper.
However, the amount of the JobKeeper payment will change at the rates set out above.
As always, please do not hesitate to contact our office to discuss your JobKeeper eligibility.
28 May 2020 - Superannuation Guarantee Amnesty
This topic is especially important for employers who may have any unpaid or late employee superannuation contributions for the period detailed below.
Make no mistake, even during the current Coronavirus crisis Superannuation Contributions are expected to be paid on time for employees. Usually, 28 days from the end of each quarter. The ATO has no power to extend or defer any due dates for employee superannuation contributions.
Even during the Coronavirus crisis the usual late payment processes and penalties continue to apply as normal.
This includes paying the shortfall amount, administration fees, nominal interest of 10%, GIC and up to a 200% penalty.
Finally, most are not tax deductible once paid.
- Amnesty Currently Available - Act Now -
Business clients who have employees (including business owners who are also employees) should be aware that a Super Guarantee (SG) amnesty is currently now available. The amnesty commenced in March, 2020 and employers have until the 7th September, 2020 to take advantage as there are some incentives to take it up.
The amnesty applies specifically to the periods from 1 July, 1992 until the March, 2018 quarter.
If you have always made all super contributions on time and in full you do not need to take any further action. Simply continue to meet your employer super obligations going forward.
If your business has at any stage fallen behind on its SG obligations and is eligible for the amnesty, you need to start working through the issues now or contact us to work through the issues for you.
With the introduction of Single Touch Payroll (STP) the ATO’s detection of late superannuation payments is becoming more sophisticated every week. Therefore, compliance with the Superannuation Guarantee laws is a must as the penalties for non compliance are punitive.
We note that the amnesty only applies to “voluntary” disclosures. The ATO will continue its compliance activities during the amnesty period so if they discover the underpayment first, full penalties apply. The amnesty also does not apply to amounts that have already been identified as owing or where the employer is subject to an ATO audit.
Should you have any queries regarding the above or prefer an appointment (via video conference) to discuss how your business may be impacted please do not hesitate to contact our office.
Temporary Reduction in Minimum Pension Rates from Superannuation
As part of the economic response to the current COVID-19 issue the Government will be temporarily reducing the superannuation minimum drawdown amounts for retirees in receipts of account based pensions and similar products by 50% for the 2020 and 2021 income years.
As a practice we usually advise our SMSF clients each year of their minimum pension to be withdrawn from their SMSF during an income year.
To the right is a chart with the original default rates and the new 50% reduced rates that now apply to the 2020 and 2021 income years.
As a practice we are committed to working closely together with our clients to provide support wherever possible during this difficult time.
For confirmation of the change to your minimum pension for the year or if you have any queries on how the measures may impact you personally please do not hesitate to contact our office.