Assistance for individuals and households
7 April 2020 – the Taxation Office provides for a simpler way to claim home office expenses for those working from home during this time.
5 April 2020 – Eligibility for consolidated groups and self-employed individuals further explained.
Working from Home
7 April 2020 update: The Taxation Office has provided a further concession for those working from home. From 1 March 2020 individuals will be able to claim a simple home office claim of 80 cents per hour.
The 80 cents per hour rate effectively covers the additional cost of heating, cooling and office furniture. The new rate also covers phone, internet and office consumables.
You must keep a record of the number of hours you have worked from as a result of COVID-19.
JobKeeper Payment Subsidy
17 April - To read our overview of the reporting of JobKeeper Payments via Single Touch Payroll, click here
15 April - To read our most recent article on the JobKeeper Payment, click here.
On 30 March 2020 the Government announced a $130 billion wage subsidy package, called the JobKeeper Payment. This is the biggest Federal Government response to the COVID-19 outbreak to date, which is expected to affect six million Australians.
The general intent of the package is to keep employees on the books and being paid as normal. The scheme can be summarised as follows:
Where an eligible employer suffers a substantial decrease in revenue, they will receive a subsidy for their eligible employees of $1,500 per fortnight. They will continue to pay the employee at least $1,500 per fortnight, even if they have been stood down.
How the system will work
The JobKeeper payment will provide eligible employers with a flat payment of $1,500 per fortnight per employee over the next six months regardless of the employee’s salary.
The first payment will be received by employers from the Australian Taxation Office (ATO) in the first week of May, backdated from 30 March 2020.
Eligible employers will need to identify and notify eligible employees for the JobKeeper payment and must provide monthly updates to the ATO confirming that the employer continues to be eligible.
Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax. Employees that are already receiving this amount per fortnight will not see their salary change. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper payment.
The payment will be paid for employees engaged as at 1 March 2020.
Employers will be eligible for the JobKeeper payment if:
- Their organisation has a turnover of less than $1 billion and their turnover has been reduced by more than 30% relative to a comparable period a year ago (of at least a month); or
- Their organisation has a turnover of $1 billion or more and their turnover has been reduced by more than 50% to a comparable period a year ago (of at least a month); and
- The business is not subject to the Major Bank Levy.
In determining if a business has faced a 30% (or 50%) reduction in their turnover, the business is expected to show that their current turnover has fallen compared to a relevant month, or three-month period a year earlier. The relevant period will be dependent on the nature of the business activity.
There must be an employment relationship with eligible employees as at 1 March 2020, and the employer must confirm that each eligible employee is currently employed in order to receive the JobKeeper payment, even those that have been stood down. If the employee has been retrenched, they will have to be reinstated in order to be eligible for the JobKeeper payment. Employers that re-engage employees will be eligible if the employee was employed on 1 March 2020.
5 April 2020 update: Self-employed (sole trader) individuals are eligible to receive the JobKeeper Payment where:
- Their turnover has experienced a reduction, as outlined above,
- They have an ABN on or before 12 March 2020,
- They included sole trader income in their 2018/2019 income tax return, and
- They are activity engaged in the business.
Please note the JobKeeper payment is treated as income and may affect the eligibility to the JobSeeker payment.
Where a business operates through a partnership and the business meets the turnover reduction requirement, one partner can receive the JobKeeper payment.
Where a business operates through a company and the business meets the turnover reduction requirement, one director can receive the JobKeeper payment.
Where a business operates through a trust and the business meets the turnover reduction requirement, one individual beneficiary can receive the JobKeeper payment.
Non-government schools and private vocational education providers are eligible to claim the JobKeeper Payment.
The payment applies to full-time, part-time and casual employees who were employed by the employer on 1 March 2020. Casuals must have been employed on a regular basis for more than 12 months as at 1 March 2020.
All eligible employees must be:
- At least 16 years of age;
- An Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
- Not in receipt of a JobKeeper payment from another employer. Only the employee’s main employer will receive the JobKeeper payment.
Employees on parental leave from their employer will be eligible to the payment.
Employers are required to make the minimum $1,500 per fortnight payment to employees and will be reimbursed monthly. The first reimbursement will be in the first week of May and will be backdated to 30 March. This will create some cash flow issues for affected organisations.
We will not see the full details of the subsidy for a week or so and in the meantime we are left with press releases and ATO fact sheets. We understand the two-fold intents of the subsidy are to keep people on the payroll to the greatest extent possible (which will keep people off Centrelink benefits) and to subsidise employers to encourage them to keep their staff. It does not prevent employers from making the right commercial decision about reducing hours or if there is no work, standing people down. However, when making these decisions employers should take into account the subsidy they will receive.
To the extent that the $1,500 payment is not wages but is passing on the government subsidy, SGC is not required to be paid. This can occur when an employee is normally paid less than $1,500 per fortnight or where they have been stood down.
There will undoubtedly be anomalies with the scheme but this is a bold initiative to keep employees on the books and to ensure that a work force is ready and available to bounce back.
Here is the link to the Government fact sheet for employees:
Fact sheet for employees:
More than 6 million welfare recipients, including pensioners, carers, veterans, families, young people and jobseekers will now get one tax free cash payment of $750 from 31 March 2020 and a second payment of $750 from 13 July 2020 and both will be paid automatically.
The Treasury website has the complete list of those eligible (including a handy table with clear guidance on what is in and out).
The deeming rates for pensioners will be cut by a further 0.25% in response to the latest interest rate cut by the Reserve Bank of Australia. This should increase the fortnightly pension payments for pensioners affected by the income test.
A new, time-limited Coronavirus supplement will be introduced at rate of $550 per fortnight on top of the normal fortnightly payments to eligible recipients. It will be paid to existing and new recipients of the eligible payment categories and will apply for the next 6 months.
The eligible recipients are those eligible for the Jobseeker Payment, Youth Allowance Jobseeker, Parenting Payment (Partnered and Single), Farm Household Allowance and Special Benefit recipients.
Eligibility to the income support payments listed above is to be expanded and will be available for permanent employees who are stood down or lose their employment, sole traders, the self-employed, casual workers and contract workers who meet the income tests.
Asset testing for Jobseeker Payment, Youth Allowance Jobseeker and Parenting payment will be waived for the period of the Coronavirus supplement. The waiting times will also be reduced and the application processes will be made easier.
Early release of super
Eligible individuals will be able to apply online through myGov to access up to $10,000 of their superannuation before 1 July 2020 and a further $10,000 from 1 July for approximately 3 months. The withdrawals will be tax free and will not impact Centrelink entitlements.
This is available for those eligible for the Coronavirus supplement and people whose working hours or income has been affected by at least 20% since 1 January 2020
Minimum Drawdown requirements
The minimum pension amounts that must be drawn from superannuation pension accounts will be temporarily reduced by 50% for the years ended 30 June 2020 and 2021.
Waiting times for a government payment for eligible casual workers forced into self-isolation will be waived.