Coronavirus: Government’s JobKeeper Payment
A major part of the Government’s response to the Coronavirus (or ‘COVID-19’) pandemic is the ‘JobKeeper Payment’ Scheme.
The JobKeeper Payment is a wage subsidy that will be paid through the tax system (i.e., it will be administered by the ATO) to eligible businesses impacted by COVID-19.
Under the scheme, eligible businesses will receive a payment of $1,500 per fortnight per eligible employee and/or for one eligible business participant (i.e., an eligible sole trader, partner, company director or shareholder, or trust beneficiary).
The subsidy will be paid for a maximum period of six months (i.e., from 30 March 2020 up until 27 September 2020). It will be paid to eligible businesses monthly in arrears, with the first payments to employers commencing from the first week of May 2020.
The JobKeeper Payment will ensure that eligible employees (and, where applicable, eligible business participants) receive a gross payment (i.e., before tax) of at least $1,500 per fortnight for the duration of the scheme.
An employer will only be eligible to receive a JobKeeper Payment in respect of an ‘eligible employee’ if, at the time of applying:
For an employer that is registered as a charity with the Australian Charities and Not-for-Profits Commission (excluding universities and non-government schools registered as charities, which are subject to the 30% or 50% decline in turnover tests, as outlined above), a 15% decline in turnover test applies.
Importantly, eligible employers must actually elect to participate in the JobKeeper Scheme via an application to the ATO. In making such an application, an employer will also need to:
The ATO has available on its website an online form which can be used by employers to register their interest in the JobKeeper Payment Scheme.
Editor: Please contact our office If you have any queries in relation to the JobKeeper Scheme.
Shortcut method to claim deductions if working from home
As the situation around COVID-19 continues to develop, the ATO understands many employees are now working from home. To make it easier when claiming a deduction for additional running costs you incur as a result of working from home, special arrangements have been announced.
A simplified method has been introduced that allows you to claim a rate of 80 cents per hour for all your running expenses, rather than having to calculate the additional amount you incurred for specific running expenses.
This simplified method will be available to use from 1 March 2020 until 30 June 2020. You may still use one of the existing methods to calculate your running expenses if you would prefer to.
You can claim a deduction of 80 cents for each hour you work from home due to COVID-19 as long as you are:
You do not have to have a separate or dedicated area of your home set aside for working, such as a private study.
Editor: Please contact our office if you need more information about this deduction.
SMSFs may be able to offer rental relief to related party tenants
As a result of the financial effects of the COVID-19 pandemic, some self-managed superannuation funds (‘SMSFs’) which own real property may want to give a tenant – who is a related party – a reduction in rent because the related party tenant has had a collapse in revenue.
Charging a related party a price that is less than market value is usually a contravention of the strict legislative rules SMSFs and their trustees are required to follow.
The ATO has recently advised that its approach for the 2019–20 and 2020–21 financial years is that it will not take action if an SMSF gives a tenant – even one who is also a related party – a temporary rent reduction, waiver or deferral because of the financial effects of COVID-19 during this period.
If there are temporary changes to the terms of the lease agreement in response to COVID-19, it is important that the parties to the agreement document the changes and the reasons for the change. You can do this with a minute or a renewed lease agreement or other contemporaneous document.
Editor: Please contact our office if you have an SMSF that could be impacted by a lease with a tenant, where the tenant cannot afford to pay some or all of its rent because of the economic consequences of COVID-19.
ATO reminder about salary packaged super
The ATO has provided employers with a recent reminder that, from 1 January 2020, there has been a legislative change to ensure that when an employee sacrifices pre-tax salary in return for an additional concessional contribution into superannuation, it will not result in a reduction in the 9.5% Superannuation Guarantee (‘SG’) obligation their employer has even though doing so reduced their Ordinary Time Earnings.
The ATO has provided information for employers, payroll software providers and intermediaries who may need to change the way they calculate SG.
The ATO advises that, from 1 January 2020, you calculate the minimum amount of SG on the employee’s ‘OTE base’. This is the sum of the employee’s OTE and any OTE amounts they sacrifice in return for super contributions.
Additionally, super contributions to an employee’s fund under an effective salary sacrifice arrangement no longer count towards an employer’ super guarantee obligations.
Editor: If your business allows for salary sacrifice arrangements, feel free to contact our office to ensure that you are calculating SG correctly.
The month that was @ HOC
The last two months has seen everyone at HOC busy learning and applying the new and ever changing Government stimulus packages. We have sent multiply communications during this time regarding the changes via special newsletters. If you any queries on these measures, please give us a call to discuss.
New additions to HOC
We take this opportunity to introduce our new manager at HOC, Dominic De Pasquale. He joins us with extensive experience as a senior accountant, having shown a commitment to excellence and innovation in his previous roles . With substantial experience using various accounting software systems, he is known as being a technical expert on taxation subject matters, including the recent JobKeeper legislation. Dominic is a local, schooled at PEGS, grew up in Moonee Ponds, and an avid Western Bulldogs supporter.
HOC in the community
This month HOC has been active in the community by attending a virtual event with students from Monash University studying accounting, and another event has been scheduled with RMIT University later this month. These events are a platform for us to share our views on how the accounting industry is coping with COVID-19, Working From Home, how the community is being impacted, and the impact of working in the industry moving forward. HOC thanks CPA Australia for giving us the platform to engage with them.
Lisa Papachristoforos from our office has been appointed a member of the CPA Australia Victorian Public Practice Committee, participating in policy formation and feedback on behalf of HOC clients. This will strengthen and deepen our relationships with key policy makers to benefit our clients, and highlights HOC’s position as a leading suburban firm.
HOC Client Webinars
A new addition to our service offering (that we will be rolling out shortly) are client-only webinars on special topics. Spaces at each webinar will be strictly limited and on a first-in basis. Watch out for further communication on this in the coming week as we gear up for our first event via Zoom!
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.Tags: ATO, Coronavirus, COVID19, JobKeeper, JobKeeper Payment, SMSF, superannuation
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