Federal Government | Job Keeper Payment Program & Support Measures

We’ve highlighted the new key measures of support set in place over the last few days by the Federal Government & other bodies to provide assistance to SME businesses, facing on-going challenges as a result of COVID-19.

Job Keeper Payment - Wage Subsidy Business Support Program

The Federal Government has announced its “Job Keeper” wage subsidy payment support program – pledging a $130 billion package over the next six months to help businesses retain & remain connected with their employees as a result of COVID-19.

The package will be delivered through the Australian Tax Office (utilising Single Touch Payroll), and will include a flat-rate payment of $1,500 a fortnight per employee – regardless of their salary – paid for the next six months.

The support program will be paid to businesses and non-profit organisations to retain or continue to engage full-time, part-time, and casual staff who have been employed with their current employer for 12 months or more.

Additionally, for any employees which have been retrenched from 1 March 2020 – employers can put these individuals back on the payroll, and be eligible to receive the “Job Keeper” payment support package.

The program will commence from 30 March 2020, with the first payments to be received by eligible businesses in the first week of May, as monthly arrears from the ATO. Eligible businesses can begin distributing the “Job Keeper” payment immediately, and will be reimbursed from the first week of May.

To be eligible for the package, businesses with an annual turnover of less than $1 billion, will have to demonstrate a reduction in revenue of 30 per cent or more since 1 March 2020 over a minimum one-month period.

Employers with an annual turnover of $1 billion or more will be required to demonstrate a reduction in review of 50 per cent or more to be eligible.

The measures of demonstrating revenue deductions (30% & 50% respectively) are yet to be released.

Eligible employers include businesses structured through Companies, Partnerships, Trusts, and Sole Traders. Not-for-Profit entities, including charities, will also be eligible. Self-employed individuals are also eligible to receive the support program.

Furthermore, any New Zealand citizens in Australia who hold a Subclass 444 Special Category Visa will also be eligible for the “Job Keeper” payment program.

To register your expression of interest in the “Job Keeper” program – visit the ATO Website - www.ato.gov.au

UPDATE

The Federal Government’s ‘JobKeeper Payment’ has now passed Parliament (8 April 2020). Payments will begin in May, and will be backdated to 30 March 2020.

Additionally, further information has been provided in regards to assessing eligibility of reduced turnover. The Federal Government has advised the following possible determinations:

• Relevant Month versus the same Month last year;
• Relevant Quarter versus the same Quarter last year;
• Discretion of the Tax Commission to consider additional information;
• Alternative tests as set by the Tax Commission
  • For Example, when a business has ceased being able to trade or significantly hindered from trading

Furthermore, it is also suggested that ‘some tolerance’ will be exercised if a business expects income to drop by 30%, but the actual reduction is ‘slightly smaller’.

For full details, access the following link – www.business.gov.au.

Six-Month Eviction Moratorium - Residential & Commercial

The Federal Government has announced a six-month eviction moratorium for Resident & Commercial tenants, preventing landlords from evicting tenants unable to pay rent due to financial distress as a result of the COVID-19 outbreak.

To help support this transition, the Federal Government is urging cooperation & communication between banks, landlords, and tenants (particularly commercial landlords & tenants) in this matter.

ATO Support - Rent Relief Through SMSF

The Australian Tax Office (ATO) has announced that it will allow Self-Managed Superannuation Funds (SMSF) that have a lease agreement in place with a related-party business tenant to temporarily reduce rent, due to the business and economic impacts of COVID-19.

In their statement, the ATO advised “our compliance approach for the 2019-20 & 2020-21 Financial Years is that we will not take action where an SMSF gives a tenant – who is also a related party – a temporary rent reduction during this period.”

For more information, please visit the ATO website.

Australian Banking Association - Support Program

The Australian Banking Association (ABA) has announced its support program – highlighting that businesses with total business loan facilities with an Australian bank of up to $10 million will be able to defer repayments for loans attached to their business for six months.

This new measure will apply (on an opt-in basis) under the conditions that:

• For commercial property landlords, they provide an undertaking to the bank that for the period of the interest capitalisation, they will not terminate leases or evict current tenants for rent arrears as a result of COVID-19.
• The customer has advised that its business is affected by COVID-19.
• The customer was current in terms of existing facilities 90 days prior to applying
• Interest is capitalised - meaning either the term of the loan is extended or payments have increased after the deferral period.

Furthermore, this measure of support is an increase on the previous $3 million small business threshold.

For More Information

For more information on the latest alerts & announcements, please contact the Archer Gowland office on (07) 3002 2699.