Businesses wishing to use the JobKeeper payment scheme may find themselves running into many logistical uncertainties, as claiming the JobKeeper payment scheme can be a complicated and risky process. Here are the steps you need to take now to benefit.
Businesses who have satisfied the eligibility requirements of a minimum 30% reduction in their turnover for at least a month, with a turnover of less than $1 billion a year, will be able to apply for the scheme. This includes sole traders who are actively engaged in the business and are not a permanent employee of any other employer.
To claim JobKeeper payments, eligible employers must:
- Register your interest and subscribe for JobKeeper payment updates through the ATO website. before 26 April 2020 through the ATO.
- Continue to pay eligible employees at least $1,500 each per fortnight (the first JobKeeper fortnight is from 30 March to 12 April), or make a single combined payment of $3,000 by the end of the month.
- Notify eligible employees of your intention to claim JobKeeper payments and confirm that they are not also claiming the payment through another employer.
- Provide your nominated employees with the JobKeeper employee nomination notice to complete before the end of April if you intend to claim JobKeeper payment for April.
- Enrol for the JobKeeper payment on or after 20 April 2020 through the ATO’s Business Portal. For April JobKeeper payments, this must be done before the end of the month.
- Fill out the online form, providing your bank details and whether you will be claiming an entitlement based on business participation, e.g. sole traders.
- State number of employees who will be eligible for the first two JobKeeper fortnights (30 March -12 April and 13 April – 26 April).
Receiving JobKeeper payments can put small businesses at risk of cash flow problems due to the requirements of JobKeeper payments. To be eligible, businesses must back pay the minimum $1,500 per fortnight to nominated employees from 30 March 2020, despite JobKeeper reimbursements not being provided until the first week of May. Employers who normally pay employees less than $1,500 each per fortnight (often these are part-time and long-term casual employees) may find themselves in further financial strain for at least a month as the employee wages will likely exceed the amount they would ordinarily pay in wages despite already losing 30% of their turnover.
Employers who apply for the scheme but fail to pay their eligible employees may face penalties up to $126,000 for individual employers, or $630,000 for corporations as a breach of the Fair Work Act. The ATO can also claw back funds (with interest) which it deems to be improperly paid. The scheme also requires monthly reports of current and projected GST turnovers, where eligibility consequences can be imposed for not meeting record keeping requirements.