|With the date for the Federal Budget 2020-2021 being delayed until 6 October, the Treasurer Josh Frydenberg today provided an update on Australia’s economic and fiscal outlook.|
Mr Frydenberg revealed the budget will be in deficit by almost $86 billion in the 2020 financial year and is projected to grow to more than $184 billion in 2021. Unemployment is expected to reach 9.25% by the end of the year.
Individuals who are still financially impacted by the COVID-19 pandemic will have more time to apply for the early release of up to $10,000 of superannuation, with the application period extended from 24 September 2020 to 31 December 2020.
The JobTrainer Skills Package establishes the JobTrainer Fund to provide additional low and no fee training places for job seekers and school leavers, and extends the Supporting Apprentices and Trainees wage subsidy for a further 6 months to 31 March 2021 and expands it to medium-sized businesses from 1 July 2020.
The Government is extending the COVID-19 SME Guarantee Scheme to loans written until 30 June 2021 and making targeted amendments to ensure that the loans available suit the evolving needs of SMEs.
Income support for individuals will continue with the Coronavirus Supplement being extended to 31 December 2020, at a lower payment rate.
The JobKeeper Payment (JKP) Scheme is being extended at a tapered level for an additional 6 months as was announced by Treasury on 21 July 2020.
TREASURY ANNOUNCEMENT – 21 JULY 2020 – EXTENSION OF THE JKP SCHEME – Extension to 28 March 2021
The JKP, 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.
From 28 September 2020 to 3 January 2021, the JKP rates will be:
– $1,200 per fortnight for:
– all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average, and
– for eligible business participants who were actively engaged in the business for 20 hours or more per week on average 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 JKP rates will be:
– $1,000 per fortnight for:
– all eligible employees who, in the four weeks of pay periods before 1 March 2020, were working in the business or not-for-profit for 20 hours or more a week on average; and
– business participants who were actively engaged in the business for 20 hours or more per week on average in the month of February 2020;
– $650 per fortnight for other eligible employees and business participants.
You will be required to nominate which payment rate you are claiming for each of your eligible employees or business participants.
Alternative tests may be announced where an employee’s or business participant’s hours were not usual during the February 2020 reference period.
Guidance will be provided by the ATO where the employee was paid in non-weekly or non-fortnightly pay periods and in other circumstances the general rules do not cover.
The JKP 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 JKP (before tax), based on the payment rate that applies to each employee.
Eligibility – additional turnover tests
There will be an additional decline in turnover test for each of the two periods of extension, as well as meeting the existing eligibility requirements for JKP.
If you do not meet the additional turnover tests for the extension period, this does not affect your eligibility prior to 28 September 2020.
28 September 2020 to 3 January 2021
You will be required to satisfy the decline in turnover test in both the June and September 2020 quarters based on your actual GST turnover relative to the corresponding quarters in 2019 (or another comparable period if applicable).
4 January 2021 to 28 March 2021
You will be required to satisfy the decline in turnover test in each of the June, September and December 2020 quarters based on your actual GST turnover relative to the corresponding quarters in 2019 (or another comparable period if applicable).
Alternative testing periods
Alternative testing periods may be announced where it is not appropriate to compare actual turnover in a quarter in 2020 with actual turnover in a quarter in 2019.
No change to existing decline in turnover threshold
You will need to demonstrate that you have experienced a 30% decline in turnover during the additional testing periods. (50% for businesses with an aggregated turnover of more than $1billion, and 15% for registered charities).
Employers will need to assess in advance of lodging BAS
You will generally be able to assess your eligibility based on details reported in your 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, you will need to assess your eligibility for the JKP in advance of the BAS deadline in order to pay your eligible employees before receiving the JKP (i.e. to meet the wages condition).
An extension of time to pay your employees may be announced so that you have time to first confirm your eligibility for the JKP.
Interaction with existing rules
The JKP will remain open to new recipients, provided they meet the existing eligibility requirements and the additional turnover tests during the extension period. Other eligibility rules for businesses and not-for-profits and their employees remain unchanged.
Need help? To discuss your business or personal accounting, advisory and tax needs please contact the LT Team.