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COVID-19 Blog • 2020-05-05

COVID-19 - Jobkeeper - The Critical Last Step

Most businesses knew there was a place on the Australian Taxation Office website where an expression of interest could be lodged in the federal government’s JobKeeper support programme. This received a lot of publicity and was unveiled at a time of great uncertainty where a prospect of financial support from the government was very welcome.

Appearing before the Senate inquiry into the government’s Covid-19 response last Tuesday, Jenny Wilkinson, the deputy secretary of Treasury’s fiscal group, told the inquiry that 540,000 employers had registered for the JobKeeper programme, covering an estimated 3.3 m employees.

While it is clearly set out in the Rules which administer the programme, the final necessary step has not received a lot of publicity and there does not appear to be a widespread understanding of its existence. This was apparent when I spoke to numerous clients about it being a requirement last week as I arranged for them to comply with it.

Those businesses who registered themselves provided an estimate of eligible employees as part of the registration process and may not have appreciated that this was only considered an estimate by the Australian Taxation Office. It was always going to be subject to final confirmation in the monthly claim form before the subsidy is paid.

Yes, there is a further step, which is the lodgement of a monthly claim form. It will need to be lodged at the end of each month for the term of the JobKeeper programme.

The form requires the exact number of eligible employees for whom the minimum $1,500 has been paid in the JobKeeper fortnights. In addition, it requires the actual business turnover for the month of April 2020 and an estimate of the likely turnover for the month of May 2020.

The Rules require that this information be provided to the Australian Taxation Office within seven days of the end of each month. There is no entitlement to subsidy for the month if the information is not provided. This means that for the two April JobKeeper fortnights, the subsidy will only be paid if the required information is provided to the Australian Taxation Office by 7 May 2020. There is no discretion in the Rules for the Commissioner to allow further time. The Australian Taxation Office tax agent portal indicates that these declarations can be lodged as from 4 May.

The requirement to advise the exact numbers of eligible employees each month is not unreasonable. To be eligible, the employee needs to provide a nomination form accepting involvement in the programme and making a number of declarations to confirm eligibility. In addition, the employee needs to have been paid at least $1,500 gross in each of the JobKeeper fortnights.        

The monthly declaration ensures that the business is not paid for employees who did not provide the signed acceptance form; who left employment or for some reason were not paid the required $1,500 a fortnight.

The provision of monthly actual and estimated turnover is not required to determine the business’ eligibility on a month by month basis. It is clear that once a business is accepted as eligible, it continues in the JobKeeper programme regardless of its future earnings.

We have been advised that the details are needed merely for statistical purposes. It is interesting that payment of the subsidy is contingent on provision of information which is merely for statistical purposes and not for the administration of the programme. Perhaps the Australian Taxation Office will utilise it for future audit of programme eligibility.

Once the monthly claim has been made within seven days of the month end, the Australian Taxation Office has until fourteen days after the end of the month to pay the subsidy. It is not unusual that the Australian Taxation Office IT system experiences delays on critical tax return lodgement dates when tax agents around the country lodge returns at the same time. It will be interesting to see if the system can cope with the lodgement of these monthly declarations being lodged on behalf of at least 540,000 businesses between 4 and 7 May and whether the electronic payments can all be made by 14 May.  

This is a very valuable programme and the difference between a business continuing and failing from my discussions with business owners. I trust all will go smoothly.

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