The Australian Taxation Office (ATO) has officially opened JobKeeper applications and is encouraging businesses with eligible employees to sign up.
Twelve days since the Morrison government passed the wage subsidy through parliament, the ATO has worked up an implementation model for the $130 billion scheme, releasing detailed information about the application process on Sunday.
The more than 800,000 firms that have expressed interest have begun receiving texts and emails about the application process.
Here’s what we know.
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Where do I apply?
Employers (or their accountants) need to log into the business portal on the ATO’s website using their MyGovID, where they can access JobKeeper enrollment forms.
Applications will remain open until the end of May, but businesses are being advised to apply before the end of April to receive payments as quickly as possible.
Note: if your business was using an AUSKEY login last month, you will need to switch over to a MyGov ID. (The system switched over at the start of April.)
The application forms published by the ATO on Monday consist mainly of checkboxes, requiring firms to declare how they want to apply the “turnover test” (explained below) or whether they want to be considered for the “alternative test”.
How do I identify eligible workers?
The ATO published new details on Sunday about the practical process of nominating workers for $1,500 fortnightly JobKeeper payments.
Broadly, there are two ways to identify eligible workers and officially nominate them with the ATO; which option a business chooses will likely depend on whether they are single touch payroll (STP) enabled.
Businesses using STP reporting can identify their employees for JobKeeper participation through their payroll software, so long as their provider has updated its systems with new functionality.
Large payroll software platforms, Xero and Quickbooks both confirmed they had updated their payroll products on Monday morning.
MYOB has not updated its software at time of writing, but is working on it.
Otherwise, businesses can use the ATO’s business portal, which should contain pre-filled payroll information from previous STP pay reports.
Firms not reporting through STP will need to manually identify employees through the business portal and ensure this information is kept up to date each month.
All applicant businesses are also required to notify eligible employees they will be nominating on their behalf.
Don’t forget, if an employee does not want to receive JobKeeper payments, they are allowed to opt-out.
What’s the latest on business eligibility?
I’m so glad you asked! Over the last three days, the ATO has been busy outlaying more information about JobKeeper eligibility, which is sort of a prerequisite for opening applications.
Broadly, as we’ve touched on in our previous eligibility explainer, there are two ways to get accepted into JobKeeper: either passing the turnover test, or the ‘alternative’ test.
The turnover test
The turnover test, also being called the “basic test” is a five-step process.
- Identify the turnover test period (monthly or quarterly).
- Identify a relevant comparison period (the turnover test period, but in 2019).
- Determine relevant JobKeeper GST turnover (actual or projected).
- Determine which turnover reduction applies to you (30% for SMEs which aren’t charities).
- Work out if your turnover (step 1,2,3) has fallen by the required amount (step 4).
We’ll have a more in-depth explanation about this process now the information is available soon.
The alternative test
The alternative test is a bit trickier, mainly because there’s not as much information about who is eligible. Basically, the tax commissioner and Treasurer Josh Frydenberg have the power to alter eligibility criteria for the scheme at any time using a legislative instrument which doesn’t require parliament to sit.
The ATO has confirmed a legislative instrument will be drafted to enable firms which have been in operation less than 12 months to participate in JobKeeper — but there’s no timeline yet, just “soon”.
Other examples given by the ATO of situations where the alternative test, used in cases where the “basic test” is not appropriate, include firms which have undergone “major structural change” that might mean the turnover test does not accurately depict their drop off in trading conditions.
“[The alternative test] is applicable to situations where there is something out of the ordinary about the relevant comparison period in 2019 that means it is not appropriate for the purpose of an entity in the class of entities satisfying the fall in turnover test,” the ATO said.
“For example, an entity being subject to a severe drought from 2018 until September 2019 that reduced the amount of its’ crop that it could grow.”
What do my workers need to do?
Employers need to give eligible workers JobKeeper Employee Nomination notices, which can be accessed here.
These forms must be completed and should be kept as records, but do not need to be sent to the ATO.
The form itself requests basic contact information and commits workers to declare their eligibility for the program.
Those looking to get, shall we say, creative, can create their own form. The ATO has a guide here.
Employees with multiple employers are allowed to choose which employer nominates them for JobKeeper payments but if they’re working as a long-term casual in one role and part-time in another, the part-time employer must take preference.
Workers who are receiving or have applied for Services Australia income support will need to contact them and provide notice their employer has nominated them for JobKeeper.
Note (this bit is important): the ATO said if an employee does not report JobKeeper or cancel their JobSeeker payments they may incur debts which employers will be required to pay back.
Do I need to hand over any other information?
Yes, plenty. The ATO wants businesses to prove their eligibility for the JobKeeper program in addition to providing contact and bank details.
The eligibility criteria for the JobKeeper scheme is unpacked in detail in SmartCompany‘s previous explainer here.
Businesses will need to provide business activity statements and other documents to support their claims.
Additionally, the ATO requires JobKeeper participating firms to make monthly declarations through the business portal about their eligible employees and turnover.
Each month participating businesses must reconfirm their eligible employees and notify the ATO of any change in employment circumstances.
Information must also be provided about current and projected GST turnover throughout the six month period the subsidy payments will last.
Interestingly, this data won’t be used to re-test eligibility. The ATO says it wants an “indication of how your business is progressing under the JobKeeper Payment scheme”.
Updated 12:45PM April 21 with a correction. A previous version of this article stated businesses are required to sent employee nomination forms into the ATO, this is not the case.