Businesses hoping to access JobKeeper wage subsidies in April will now have an additional month to enrol, after the Australian Taxation Office yesterday extended its application deadline.
Previously, firms looking to claim $1,500 JobKeeper payments for the fortnights betwen March 30 to April 12, and April 13 to April 26, were required to determine their eligibility and enrol by this Thursday (April 30).
But after a week mired with complaints about businesses struggling to meet their April wage bills ahead of possible reimbursement, the ATO has extended its timeline, allowing more time for businesses to pay their workers and get their applications in.
It comes after the federal government pulled in Australia’s major banks to extend fast-tracked loans to businesses unable to front the minimum $3,000 in per-worker wages to maintain JobKeeper eligibility for April.
The ATO said on Monday it would accept April wage payments made as late as May 8 for firms looking to be reimbursed for April wages, allowing an additional 10 days for struggling employers to secure funds.
Small business ombudsman Kate Carnell welcomed the extension after expressing concern last week about businesses shying away from the wage subsidy scheme all together because they couldn’t afford to pay April wages.
“It’s especially critical now that those small businesses that had chosen not to apply for JobKeeper because they were worried they couldn’t pay their staff by April 30, do so now,” Carnell said in a statement on Tuesday.
Service entities now included
Meanwhile, just weeks after expressing reluctance to change JobKeeper eligibility rules, Treasurer Josh Frydenberg last Friday decided to allow workers employed through service entities to access the scheme.
Service entities utilise a corporate structure often used in the healthcare industry. They employ staff, lease premises and other assets, and then supply those services and assets to a related firm, such as a doctors practice.
“The government will provide an alternate decline in turnover test for the eligibility of special purpose service entities that provide employee labour to group members and that have not met the basic test for decline in turnover,” Frydenberg said on Friday.
“This alternate test will apply where an entity provides the services of its employees to one or more related entities, where those related entities carry on a business deriving revenue from unrelated third parties.”
The Treasurer also clarified several other matters, including that universities hoping they could exclude government financial assistance from their GST turnover calculations would be unable to do so.
The ATO has still not clarified whether small businesses should include government grant income within their GST turnover calculations.
The tax office has, however, published a question and answer sheet addressing common JobKeeper queries, providing new clarity about several aspects of the scheme.
Published yesterday, the Q&A states employers do not need to change their pay periods to correspond with JobKeeper fortnights, and may even continue to pay workers monthly.
“If you usually pay your employees less frequently the payment can be allocated between fortnights in a reasonable manner. For example, if you pay your employees on a monthly cycle, you will still be entitled to receive a JobKeeper payment if your employees received the monthly equivalent of $1,500 per fortnight,” the ATO said.
More clarity was also provided about the veracity of projected GST turnover calculations, and what the ATO’s expectations are.
There are integrity rules in place for the JobKeeper program and the ATO’s compliance focus will be “particularly directed towards” schemes where there has “not been a genuine fall in turnover in substance” but instead operators present “contrived” arrangements to satisfy the turnover test.
Here’s what the tax office said:
“Your projected GST turnover is a point-in-time test and needs to be a reasonable assessment of what was likely at the time you calculated the test. If, at a later stage, it eventuates that your actual turnover for your test period is greater than your prediction of your projected turnover, you do not lose access to JobKeeper.
“We will accept your assessment of these turnovers unless we have reason to believe that your calculation of your projected GST turnover was not reasonable.
“If there is a significant difference between your projected turnover and what eventuates, we may need to assess whether your assessment was reasonable, so you need to keep good records of your calculations.”