JobKeeper rules were recently adjusted to make it easier for businesses to access JobKeeper payments including moving the employee reference date for eligibility from 1 March to 1 July 2020. The 31 August 2020 deadline for satisfying the wage condition for newly eligible employees for JobKeeper fortnights in August however is only a week away. The ATO has also commenced reviewing the eligibility of businesses receiving JobKeeper payments.
JobKeeper Payments Scheme Updates
Following the Federal Government’s announcement on 7 August 2020 that eligibility requirements for the second phase of the JobKeeper payments scheme, which takes effect from 28 September 2020, would be relaxed, a legislative instrument giving effect to the changes was registered on 14 August 2020.
The changes include an easing of the JobKeeper turnover test and adjustment to the employee reference date from 1 March 2020 to 1 July 2020. Refer to this BDO Tax Technical Update for detail on the changes.
On 14 August 2020, the ATO also updated its website confirming that either the 1 July 2020 test or the 1 March 2020 test (depending on the JobKeeper fortnight for which an employer is claiming) and the JobKeeper fortnight test must both be satisfied. There are also a number of examples including varying work schedules, seasonal work and when there is a period of absence.
On 19 August 2020, the ATO released this useful fact sheet that provides information on the changes to employee eligibility for JobKeeper payments.
Date to provide nomination notice form newly eligible employees – 24 August 2020
The new JobKeeper rules require employers to give a nomination notice form to their employees who are now eligible based on the 1 July 2020 employment test within seven days of the commencement of the legislative instrument. This includes employees who were eligible at 1 March, terminated and were re-employed after 1 July. Anyone in this category would also need to provide another nomination notice form by the later of 22 August and 7 days of their re-employment date.
The instrument commenced the day after it was registered – 15 August – so employers had until 22 August to provide the nomination notice form to employees who were not previously registered for the JobKeeper. As the deadline of 22 August fell on a Saturday, employers had until the next day business day i.e. Monday 24 August to provide such employees with their nomination notice form.
Not providing the nomination notice form to employees by 24 August does not preclude an employer from being eligible for JobKeeper, but it may constitute an offence resulting in penalties and/or prosecution by the ATO. To minimise this risk employers, if they haven’t already, should provide a nomination notice form to all eligible employees by 24 August 2020 or as soon as possible thereafter.
Date to enrol employees for August Job Keeper fortnights – 31 August 2020
To claim JobKeeper payments for the August JobKeeper fortnights, including for new eligible employees included in the Jobkeeper scheme under the 1 July eligibility test, you must enrol for JobKeeper by 31 August.
Date to satisfy wage condition for newly eligible employees – 31 August 2020
On 14 August 2020, the ATO further updated key JobKeeper dates on its website. In light of the fact that employers need to commence paying new eligible employees a minimum of $1500 per fortnight from the JobKeeper fortnight, which commenced on 3 August 2020, they have until the end of August to satisfy the wage condition.
For the fortnights commencing on 3 August 2020 and 17 August 2020, the ATO is allowing employers until 31 August 2020 to meet the wage condition for all new eligible employees included in the JobKeeper scheme under the July 1 eligibility test.
Employers can commence claiming for the JobKeeper reimbursement for the new eligible employees from 1 September 2020 when they can lodge their August monthly declaration claim.
ATO JobKeeper Compliance Reviews (currently underway)
The ATO has also commenced reviewing the eligibility of businesses that have accessed JobKeeper payments, with the intention to review all enrolled taxpayers within its top 500 private group program, as well as a broad range of taxpayers outside of that group.
Ineligible and fraudulent behaviour the ATO has already uncovered includes a small number of falsification of records, claims for ghost employees, and workers claiming from multiple employers.
Compliance activities are expected to run through until the end of the year and include data matching, verification at the time claims are made and post registration confirmation on eligibility questions including turnover.
To claim JobKeeper payments for JobKeeper fortnights, commencing 3 August 2020 and 17 August 2020, employers must ensure that all eligible employees, including those that have been newly nominated, are enrolled for JobKeeper by 31 August 2020.
Any employer that has not identified newly eligible employees and provided them with a nomination notice form by 24 August 2020, faces the risk of penalties. Furthermore, if the employer has not made any necessary ‘top up’ payments by 31 August 2020, they will be in breach of the JobKeeper rules and would not be entitled to JobKeeper payments for those employees.
In light of ATO JobKeeper compliance activity, businesses should also review and collate the documentation and other evidence that support their enrolment for JobKeeper payments in the event of an ATO review.