Weekly Digest – 16 September 2020
Welcome back to our Weekly Digest. We hope you and your family are safe and doing well. Read on for this week’s update.
JobKeeper 2.0 Bill Passed By Federal Parliament
The JobKeeper Amendment Bill 2020 was passed by Federal Parliament this week. Below are the key changes to the scheme:
Extending the period of operation– The JobKeeper scheme and the provisions that allow employers to temporarily vary the working arrangements (by way of JobKeeper enabling directions or agreements under Part 6-4C of the Fair Work Act 2009) will now end on 28 March 2021 instead of 28 September 2020.
New payment rates– The current JobKeeper subsidy rate for full-time workers of $1,500 a fortnight will drop to $1,200 from 28 September 2020, and then to $1,000 a fortnight from January 2021. Meanwhile, those who worked less than 20 hours per week in the relevant reference period (being the four-week pay period before either 1 March 2020 or 1 July 2020) will receive $750 from 28 September 2020, and then to $650 a fortnight from January 2021.
Legacy Employers– Employers who no longer qualify for JobKeeper after 28 September will be classified as legacy employers, and will have to satisfy a 10% decline in turnover to have access to modified JobKeeper enabling directions.
Decline in Turnover Test Certificate– Employers will need to obtain a 10% decline in turnover test certificate from an eligible financial service provider, including a BAS or Tax agent.
These modified directions include reducing an employee’s ordinary hours to a minimum of 60% of the employee’s ordinary hours as they were at 1 March 2020, but cannot result in the employee working less than two consecutive hours in a day.
A dispute can be brought before the Fair Work Commission about whether an employer holds a 10% decline in turnover certificate for the relevant period, including a dispute about whether a certificate is valid.
Penalty– A penalty of up to $13,320 for individuals and $66,600 for body corporates or employers will be imposed if an employer does not meet the 10% decline in turnover test and knowingly or recklessly tries to use the provisions or fails to notify employees that a JobKeeper enabling direction or agreement is not continuing due to not having met the requirements.
JobKeeper Turnover Test Requirements
From the 28 of September 2020:
- businesses looking to claim the JobKeeper payment will be required to demonstrate that they experienced a decline in turnover using actual GST turnover, rather than projected GST turnover.
- businesses will be required to re-assess their eligibility with reference to their actual GST turnover in the September 2020 quarter to be eligible for the JobKeeper Payment from 28 September 2020 to 3 January 2021 (the first extension period).
From 4 January 2021:
- businesses will need to further re-assess their turnover to be eligible for the JobKeeper Payment. They will need to demonstrate that they suffered a decline with reference to their actual GST turnover in the December 2020 quarter to be eligible for the JobKeeper payment from 4 January 2021 to 28 March 2021 (the second extension period). You can be eligible for JobKeeper extension 2 even if you were not eligible for JobKeeper extension 1.
The required decline in GST turnover percentages will remain the same:
- 30% for an aggregated turnover of $1 billion or less
- 50% for an aggregated turnover of more than $1 billion
- 15% for ACNC-registered charities other than universities and schools.
Business Resilience Package for Victorian Businesses
The Victorian government is investing $3 billion in cash grants, tax relief, and cashflow support to aid businesses hit by the tight restrictions and help them prepare for COVID Normal. The types of support included in this package are divided into three categories: Business Support, Business Adaptation, and Waivers and Deferrals.
Included in Business Support is the third round of the Business Support Fund for small and medium-sized business ($822 million), with applications opening on 18 September 2020.
Meanwhile, Business Adaptation involves funding, tools, and resources to help businesses adapt to COVID Normal. Tax and cashflow support amounting to $1.8 billion will be provided by the government under the Waivers and Deferrals scheme.
For a detailed rundown of the inclusions of the Business Resilience Package, click here. Contact us if you need assistance to assess your eligibility to gain access to government support.
Missed the Superannuation Guarantee Amnesty Deadline?
The Superannuation Guarantee Amnesty ended last week on 7 September. Businesses that failed to apply for the SG amnesty but still have unpaid or late paid super to disclose will need to lodge a Superannuation guarantee charge statement and pay the super guarantee charge (SGC).
The ATO will notify you of the quarters that are not eligible for the amnesty and charge you with an administration component of $20 per employee per quarter. They will factor in the circumstances of your business in their decision of whether the Part 7 penalty should be remitted and will also work with you through the debt processes to collect the outstanding amount.
If you have any superannuation concerns our team at Cadenze Partners are here to help.
Xero Starter Plans have changed
COVID-19 has seen a spike in new businesses starting up in Australia, with the vast majority being micro/small business. To help, the Xero Starter Plan has been upgraded to help micro and small businesses digitise their accounts.
To support businesses, Xero is offering all new Starter plans at $12.50 for the first 4 months. This applies to new subscriptions only and for a limited time. Please contact us for more information.
Second Round of Cash Flow Boost
If you have received initial cash flow boosts, you will automatically get a second round of cash flow boost when you lodge your activity statements for each monthly or quarterly period from June to September 2020.
If you lodge:
- quarterly, you’ll receive 50% of your total initial cash flow boost for each activity statement
- monthly, you’ll receive 25% of your total initial cash flow boost for each activity statement.
Upon lodgement we will notify you of your obligations and/or refunds and can assist in managing any outstanding debt if needed.
Bankruptcy Protection Rules Until End of 2020
Australia will extend its temporary insolvency and bankruptcy protection rules until the end of this year, providing businesses a lifeline to recover from the impacts of COVID-19.
The rules, which were first introduced in March and originally due to expire on 30 September 2020, indicate that creditors cannot issue bankruptcy notices to businesses for debts below A$20,000.
The creditors’ notice period to act on debts can also be extended, allowing businesses to keep trading without paying rent, tax, and loans.
Contact us if you have any questions and we will help create a plan for your business.
Government Launches Business Continuity Website to Support Businesses Amid COVID-19
The Australian Government has launched the Australian Business Continuity website to support businesses with staff working remotely amid the pandemic.
The site provides free practical tools for remote communications, collaboration, workforce management, and video conferencing, as well as advice on how to best use teleworking services.
Get in touch
To keep up to date with the latest changes released by the Government we are here to answer any questions you may have.