Archive for the ‘Government’ Category

Super guarantee amnesty now closed

Monday, October 5th, 2020
The ATO has reminded employers that the superannuation guarantee (SG) amnesty closed on 7 September 2020. The amnesty enabled employers to self-correct historical SG underpayments, without incurring the normal penalties, for SG shortfalls from 1 July 1992 until 31 March 2018.
Any amnesty applications received by the ATO after 11:59pm on 7 September will not qualify for the
amnesty and but instead will be treated as a standard lodgment of a super guarantee charge (SGC) statement.
The ATO will notify late applicants in writing of the quarters that aren’t eligible for the SG amnesty and charge the administrative component ($20 per employee per quarter), also considering whether to remit the additional SGC penalty (up to 200%). A minimum penalty of 100% will apply if the ATO subsequently commences an audit in respect of non-disclosed quarters covered by the amnesty.
The ATO will issue a notice of amended assessment with the increased SGC amount owing. Any SGC payments made after 7 September 2020 are not deductible, even if they relate to SG shortfalls disclosed under the amnesty.
To retain the benefits of the amnesty, the law requires an eligible employer to pay the outstanding SGC amount in full or enter into a payment plan with the ATO. Note that the SGC amount disclosed in an amnesty application must be paid to the ATO (not the employee’s super fund).
Amnesty payments made after 7 September 2020 are not deductible (including amounts paid under a payment plan after 7 September). If an employer is subsequently unable to maintain payments under a payment plan, the ATO will disqualify the employer from the amnesty and remove the amnesty benefits for any unpaid quarters.

Super choice of fund and enterprise agreements

Monday, October 5th, 2020
With recent changes to Australia’s superannuation law, the “choice of super fund” regime now extends to employees covered by enterprise agreements and workplace determinations made from 1 January 2021.
Federal Treasurer Josh Frydenberg has said this will allow another 800,000 people to make choices about where their super guarantee contributions are invested, representing around 40% of all employees covered by a current enterprise agreement. The measure was originally announced as part of the Government’s response to the Murray Financial Services Inquiry (FSI) in October 2015.

Extended COVID-19 support and relief measures

Monday, October 5th, 2020

JobKeeper
The end date of the JobKeeper scheme has now been extended from 27 September 2020 to 28 March 2021, as announced by Prime Minister Scott Morrison on 21 July 2020. The relevant legislation also amends tax secrecy provisions in relation to JobKeeper and extends certain provisions of the Fair Work Act 2009 implemented in response to COVID-19.
From 27 September until March 2021, there will be a two-tiered JobKeeper payment:
• for the December quarter, payments will be reduced from $1,500 to $1,200 per fortnight per employee, or $750 for workers employed for less than 20 hours a week; and
• for the March quarter, payments will be $1,000 per fortnight, or $650 for workers employed for less than 20 hours a week.
The employment reference date has also been extended from 1 March to 1 July 2020 via a change in the statutory rules.
The law now requires that an eligible financial service provider issues a written certificate that relates to a specified employer, stating that the employer satisfied the 10% “decline in turnover test” for the designated quarter applicable to a specified time.

Coronavirus Supplement
The period for payment of the COVID-19 Supplement has now been extended from 25 September to 18 December 2020, but at the reduced rate of $250 per fortnight (down from $550). This measure was announced by Federal Treasurer Josh Frydenberg on 21 July 2020. A further instrument will be made to extend the COVID-19 Supplement from 19 December to 31 December 2020.
The income-free area is temporarily increased to $300 a fortnight for certain JobSeeker Payment recipients for the period 25 September 2020 to 31 December 2020, and the partner income taper rate for JobSeeker Payment recipients has been adjusted.

COVID-19 early release of super
As part of the Economic and Fiscal Update in July 2020, the Government announced that it would extend the application period to allow those dealing with adverse economic effects of COVID-19 to access up to $10,000 of their super (tax-free) for the 2020–2021 year. This has now been achieved, allowing an application via the myGov website to access $10,000 of super until 31 December 2020 (extended from 24 September).

Bankruptcy concessions and director liability safe harbour extension
The Government has announced that it will extend its temporary insolvency and bankruptcy protections until 31 December 2020. Federal Treasurer Josh Frydenberg said that regulations will be made to extend the temporary increase in the threshold at which creditors can issue a statutory demand on a company and the time companies have to respond to statutory demands they receive.
The changes will also extend the temporary relief for directors from any personal liability for trading while insolvent.

ATO updates on new JobKeeper arrangements

Monday, October 5th, 2020

The ATO has also released an array of new and updated information sheets addressing the changes to JobKeeper. Here is a summary of some main points to consider.
Actual decline in turnover test
The ATO states that the actual decline in turnover test can be satisfied in two ways, using:
the basic test; or
the alternative test.
The basic test involves the comparison of actual GST turnover for the relevant comparison periods (eg September 2020 to September 2019). Generally, businesses will use the basic test. The option of an alternative test has been made available for some cases where the normal comparison period is not appropriate. There is also a modified basic test for group employer labour entities.
The actual decline test is similar to the “original” decline in turnover test, except that:
it must be used for specific quarters only;
actual sales made in the relevant quarter must be used, not projected sales, when working out GST turnover; and
sales must be allocated to the relevant quarter in the same way a business would report those sales to a particular BAS (if registered for GST).

Decline in turnover tests

The ATO states that existing JobKeeper participants have already satisfied the original decline in turnover test, and do not need to satisfy it again. They do, however, need to satisfy the actual decline in turnover test.

New participants also need to satisfy the actual decline in turnover test. Although they need to satisfy the original decline in turnover test, they will satisfy it if they satisfy the actual decline in turnover test – and they can enrol on that basis.
Employers now unable to claim JobKeeper should notify their eligible employees. Employees should also be advised that the employer is no longer obligated to pay them the amount equivalent to JobKeeper. Those employees will not be eligible to be nominated for JobKeeper by any other entity.
There is no obligation to do monthly reporting during extension period in which an employer is not eligible to receive JobKeeper.

JobKeeper key dates
For the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 only, the ATO is allowing employers until 31 October 2020 to meet the wage condition for all employees included in the JobKeeper scheme. In addition, to claim payment for the September JobKeeper fortnights, employers must have enrolled by 30 September.

80-hour threshold for employees
The ATO states that a full-time employee who has been employed for their full 28-day reference period will usually satisfy the 80-hour threshold.
However, closer examination may be required for eligible employees who are:
part-time;
long-term casual;
not paid on an hourly basis; and/or
stood down.
If an employee has been stood down, an alternative reference period may apply to them.
Any overtime performed by an employee in the course of their employment in their 28-day reference period will count towards the 80-hour threshold. It is the actual hours of overtime performed that count; that is, if a penalty rate loading applies, it does not increase the number of hours counted.

Eligible employees
Employers cannot claim for employees who:
were first employed after 1 July 2020;
left employment before 1 July 2020 (except in limited circumstances);
have been, or have agreed to be, nominated by another employer (except in limited circumstances); or
are casual employees, unless they were employed by the employer on a regular and systematic basis during the 12-month period that ended 1 July 2020.
If employees have multiple employers, they can usually choose which employer they want to be nominated by. However, if employees are long-term casuals and have other permanent employment, they must choose their permanent employer. They can’t be nominated for the JobKeeper payment by more than one employer.
Employers must also have given a JobKeeper employee nomination notice to any additional employees who first become eligible on or after 3 August 2020 using the 1 July test. This should have been given to any newly eligible employees by 24 August 2020. If not already done, the ATO says it should be done as soon as possible.

JobKeeper extension period 1 (Stage 2) and period 2 (Stage 3)

Monday, October 5th, 2020

Although you do not need to re-enrol in JobKeeper, you do need to notify the ATO of your eligible employees and what rate you are paying them as part of your normal payday reporting in October. This can easily be done through Single Touch Payroll.

For the extension period commencing from 28 September 2020, employers will need to show that their actual GST turnover has declined in the September 2020 quarter compared to the relative to a comparable period being September 2019 quarter. For many businesses registered for GST, this calculation will match the ‘total sales’ reported at G1 on your BAS minus GST payable (1A), where applicable. If you are not registered for GST, you will work out your turnover using either the GST cash or non-cash basis of accounting. This needs to be done before 31 October 2020.

Alternative tests for determining actual decline in turnover may be available in some circumstances and the ATO encourages businesses to seek guidance if necessary.

Rates of Pay

The extension period 1 will run from 28 September 2020 to 3 January 2021. Tier 1: $1,200 per fortnight (before tax) Worked over 80 hours for the 4 weeks prior to 1 March 2020. Tier 2: $750 per fortnight (before tax). Worked less than 80 hours for the 4 weeks prior to 1 March 2020.

The extension period 2 will run from 4 January 2021 to 28 March 2021. Tier 1: $1,000 per fortnight (before tax) Worked over 80 hours for the 4 weeks prior 1 March 2020. Tier 2: $650 per fortnight (before tax). Worked less than 80 hours for the 4 weeks prior to 1 March 2020.

The following are the key dates for employers to remember:

Time Steps
Now Notify employees about the JobKeeper payment they can expect to receive.
28 September 2020 Start paying eligible employees Tier 1 and Tier 2 JobKeeper rates, based on their hours worked.
From 28 September If the employer is using Single Touch Payroll to notify the ATO of eligible employees, then the employer should provide each eligible employee’s Tier as part of the normal payday reporting.
The employer must also enrol for the JobKeeper payment if it is doing so for the first time.
Between 1 and 14 October 2020 Complete the October JobKeeper monthly business declarations to receive reimbursement for the September fortnights.
Before 31 October 2020 Ensure the wage conditions for all eligible employees included in the JobKeeper scheme for the JobKeeper fortnights starting 28 September 2020 and 12 October 2020 are met.
From 1 November 2020 Complete the monthly business declaration and confirm what payment tier is claimed for each employee.

Grants – Victorian Government Business Support Fund 3

Thursday, September 24th, 2020

You may be entitled to the Third round of Victorian Government Business Support Grants

On 13 September 2020, the Victorian Government announced a new support package to help businesses survive the impacts of continued coronavirus (COVID-19) shutdown restrictions and to keep Victorians in jobs.  Business Support Fund 3 specifically targets businesses in industry sectors that have been Restricted, Heavily restricted or Closed as a result of continued restrictions outlined in Victoria’s roadmap for reopening.

1           Standard Eligibility Criteria

1.1           To be eligible for the Fund, businesses must have all the following:

2           Demonstration of eligibility
2.1          Applicants must certify that they meet the eligibility criteria and intend to remain trading at the end of restrictions.
2.2          Industry sector: To be eligible, an Applicant’s primary business activity must be in an eligible industry sector or sub sector and this must be reflected in the applicant’s Australian Business Number (ABN) registration information. Applicants should review their details at Australian Business Register website and update these details if needed prior to submitting an application. This includes ensuring that their industry classification (ANZSIC class code) linked to their ABN registration correctly captures their primary business type.
2.3          JobKeeper ID: Applicants must provide evidence of participation in the Commonwealth Government’s JobKeeper Payment scheme in the form of either a JobKeeper Business Monthly Declaration Receipt ID number or JobKeeper Enrolment Receipt ID generated from the ATO business portal.
2.4          WorkSafe Number: Applicants must demonstrate they are located in Victoria and employ people by providing their WorkCover Employer Number or WorkSafe Application Reference Number.[1]

3           Available funding

3.1          The total grant will be: $10,000, $15,000 or $20,000 depending on the size of the business’ payroll for 2019/20:

  • $10,000 if its annual payroll is less than $650,000;
  • $15,000 if its annual payroll is between $650,000 and less than $3 million; or
  • $20,000 if its annual payroll is between $3 million and up to $10 million.
  • Meeting business costs, including utilities, salaries or rent;
  • Seeking financial, legal or other advice to support business continuity planning;
  • Developing the business through marketing and communications activities; or
  • Any other supporting activities related to the operation of the business.
  • Any adverse findings by a regulator regarding a business;
  • A business is placed under external administration;
  • There is a petition to wind up or deregister a company or business; and
  • The business is or becomes deregistered or unregistered (including cancellation or lapse in registration.

3.2          A business as defined by its ABN can only receive one grant under Business Support Fund 3.

4           How the funding may be used

4.1          Grant funds may be used to assist the business, for example on:

5         Assessment Process

5.1          Funding will be allocated through a grant process, through which businesses are invited to apply for a grant.
5.2          As part of the assessment process, evidence provided by applicants will be subject to a crosscheck with other government agencies such as the State Revenue Office and Worksafe.
5.3          Any of the following circumstances may be taken into consideration in any decision whether to award a grant:
5.4          Businesses that have received assistance through the initial Business Support Fund, the Business Support Fund expansion, payroll tax rebate/waiver, or other coronavirus (COVID-19) programs can apply for assistance under Business Support Fund 3.
5.5          Businesses are not eligible for funding through this program where they have received funding under the Licensed Hospitality Venue Fund.
5.6          Each application will be carefully considered and assessed against the eligibility criteria. If an unsuccessful applicant considers that their application has been incorrectly assessed, they will have the opportunity to lodge a complaint with Business Victoria. If after that consideration an applicant still believes their application has been incorrectly assessed, there will be an opportunity for arms-length review of their application.

6           Compliance and Audit

6.1          Commission, Australian Charities and Not-for-profits Commissioner, Consumer Affairs Victoria and/or other applicable regulator.
6.2          Applicants will be subject to audit by the Victorian Government or its representatives and will be required to produce evidence (such as payroll reports to demonstrate impact) at the request of the Victorian Government for a period of four years after the grant has been approved.
6.3          If any information in the application is found to be false or misleading, or grants are not applied for the purposes of the business in accordance with the terms of funding as set out in these guidelines and attached application, the grant will be repayable on demand.

7           Other information about this Fund

7.1          The Department of Jobs, Precincts and Regions reserves the right to amend these guidelines and application terms at any time as it deems appropriate.
7.2          The Department of Jobs, Precincts and Regions will endeavour to notify all applicants of the outcome of their submitted application within 5 business days.

8           Closing date and how to apply

8.1          The Program will be open for applications until the date the Business Support Fund 3 is exhausted or 11.59pm on 23 November 2020, whichever is earlier.
8.2          Applicants are required to submit an application online via the Business Victoria website (business.vic.gov.au). All questions in the application need to be completed to ensure timely assessment and grant payment.
8.3          Further information may be found at business.vic.gov.au or through the Business Victoria Hotline at 13 22 15.

Residency and source of income in the COVID-19 era

Thursday, September 3rd, 2020
The ATO has issued an update on residency and source of income. It deals with issues from the perspectives of an Australian resident and a foreign resident in the context of a change of residency due to COVID-19.
In terms of Australian residents, the update addresses those who are temporarily overseas and those who have had to return to Australia early from certain foreign service. The latter may involve the “91 days of continuous foreign service” test.
Where the update is interesting regards what it says about foreign residents who are stuck in Australia because of the COVID-19 pandemic. The ATO acknowledges that “COVID-19 has created a special set of circumstances that must be taken into account when considering the source of the employment income earned by a foreign resident who usually works overseas but instead performs that same foreign employment in Australia”.
Whether salary or wages earned from continuing foreign employment working remotely while in Australia temporarily is assessable depends on:
• whether it is from an Australian or a foreign source; and
• whether a double tax agreement (DTA) applies.
Where the remote working arrangement is short-term (three months or less), the ATO readily accepts that income from that employment won’t have an Australian source.
For working arrangements longer than three months, the ATO says that individual circumstances need to be examined to determine if a person’s employment is connected to Australia.

PM announces pandemic leave disaster payment for Victoria

Wednesday, September 2nd, 2020
Prime Minister Scott Morrison announced on 3 August 2020 a Federal Government “pandemic leave disaster payment”. The payment will be a one-off amount of $1,500, available to workers in Victoria who have no sick leave available who have to self-isolate for 14 days as a result of an instruction by a public health officer.
It will only apply to workers in Victoria, where the Government has declared a “state of disaster” and imposed Stage 4 lockdowns, which are expected at this point to run until mid-September.
The Victorian Government has already announced that it will provide a disaster payment, principally made to those on short-term visas; that is, those who are not permanent residents or citizens of Australia who otherwise wouldn’t have accessed Commonwealth payments. The Federal Government will provide its payment to those who fall outside that scope and who don’t have leave available to them because it has been used up.
Accessing the Federal Government payment
Services Australia has provided further details on its website. It states that, to get this payment, the applicant must:
• be at least 17 years old;
• live in Victoria; and
• have no income from paid work, including sick leave entitlements.
In addition, the Victorian Department of Health and Human Services must also have told the applicant to self-isolate or quarantine. They must have done this because the applicant:
• has COVID-19;
• has been in close contact with a person who has COVID-19;
• cares for a child, aged 16 years and under, who has COVID-19; and/or
• cares for a child, aged 16 years and under, who has been in close contact with a person who has COVID-19.
If a person has to self-isolate more than once, they can claim this payment each time. However, a person cannot get this payment if they already receive:
• an income support payment, ABSTUDY Living Allowance, Paid Parental Leave or Dad and Partner Pay;
• the JobKeeper payment; or
• the Victorian Coronavirus (COVID-19) Worker Support Payment.
Coronavirus Worker Supplement Payment (Victoria)
The Victorian Government announced its Coronavirus Worker Supplement Payment on 30 July. To be eligible for a one-off $1,500 Coronavirus (COVID-19) Worker Support payment, the claimant must have been instructed by the Department of Health and Human Services:
• to self-isolate or quarantine at home because they are either diagnosed with coronavirus (COVID-19) or are a close contact of a confirmed case; or
• that a child aged aged under 16 in the claimant’s care needs to self-isolate or quarantine at home because they are either diagnosed with coronavirus (COVID-19) or are a close contact of a confirmed case.
To receive the payment, the claimant must:
• be 17 years and over;
• be currently living in Victoria (including people on Temporary Protection Visas and Temporary Working Visas 457 and 482);
• be likely to have worked during the period of self-isolation or quarantine and are unable to work as a result of the requirement to stay at home;
• not be receiving any income, earnings or salary maintenance from work;
• have exhausted sick leave entitlements, including any special pandemic leave; and
• not be receiving the JobKeeper payment or other forms of Australian Government income support.
There is no requirement for a claimant to be a citizen or permanent resident to be eligible for the Victorian Government payment.

JobKeeper reference date now 1 July 2020

Wednesday, September 2nd, 2020
For JobKeeper fortnights beginning on or after 3 August 2020, the reference date for determining certain employee eligibility conditions has been changed from 1 March 2020 to 1 July 2020. The purpose of this change is to extend the scope of JobKeeper so that “it also benefits employers of more recently engaged employees”.
Importantly, the changed rules preserve the existing eligibility of employees for JobKeeper payments; that is, those for whom employers are currently receiving JobKeeper, termed “1 March 2020 employees” because they satisfied the rules as at that date.
As a result, for JobKeeper fortnights beginning on or after 3 August 2020, an individual can be an eligible employee if they:
• meet the eligibility requirements with reference to the new 1 July 2020 date; or
• qualify as a 1 March 2020 employee.

Newly eligible employees
The later reference date provides the opportunity for qualifying employers to access JobKeeper for those employees who they engaged after 1 March 2020 and who were in an employment relationship as at 1 July 2020. That is, for new employees engaged after 1 March.
The changes also allow employers to qualify for JobKeeper payments for those employees who do not qualify as 1 March 2020 employees, but became eligible by meeting the conditions under the new 1 July 2020 reference date.
Existing and re-employed employees
The amending rules make no changes to the existing eligibility of employees who are already covered by JobKeeper; that is, those for whom the employer has been receiving the benefit based on their status as at 1 March 2020. In other words, eligible 1 March 2020 employees do not need to retest (and potentially lose) their eligibility for their employer due to the introduction of the 1 July 2020 date, or satisfy any new nomination requirements.
Although employees do not qualify as 1 March 2020 employees if their employment has ceased since 1 March, they may qualify for JobKeeper if they are engaged by another employer as at 1 July 2020. Further, if 1 March 2020 employees are made redundant by an employer and are later re-employed by the same employer (including after 1 July 2020), there is scope for them to qualify without further testing.
Employer obligations
Employers that are already participating in the JobKeeper program are required to give a notice to all employees about the revised JobKeeper reference date, other than:
• employees to whom the employer has previously given a notice in writing advising that the employer has elected to participate in the JobKeeper scheme;
• employees who had previous provided the employer with a nomination form in relation to the JobKeeper scheme;
• individuals who the employer reasonably believes do not satisfy the 1 July 2020 requirements; and
• employers that are ACNC-registered charities that have elected to disregard certain government and related supplies and the individual’s wages and benefits are funded from such government and related sources.
Further, to be eligible for the JobKeeper payment for any newly eligible employees under the 1 July 2020 reference date, a qualifying employer must provide notice to the ATO of information about that employee and their nomination. Where an employer has provided this notification to the ATO for entitlement to receive JobKeeper payments in respect of the eligible employee, the employer must notify the employee within seven days.
For those employers entering JobKeeper for the first time, the notification requirement will apply to all of their employees.

JobKeeper changes: turnover test and employment start date

Wednesday, September 2nd, 2020
Prime Minister Scott Morrison announced further changes to JobKeeper on 7 August 2020. The changes are intended to ensure that eligibility for the revised JobKeeper scheme – to commence on 28 September 2020 – will be based on a single quarter tax period, rather than multiple quarters as previously announced. Employees hired as at 1 July 2020 will now also be eligible to receive JobKeeper.
Treasury has updated its JobKeeper factsheets as at 7 August 2020 to incorporate the PM’s announcements.
The JobKeeper rules implemented in March 2020 in response to the COVID-19 pandemic were due to finish on 27 September 2020. The Government then announced on 21 July 2020 that the scheme would be extended for six months (until 28 March 2021), in an amended form.
The key highlights of JobKeeper Version 2 – to start on 28 September – are that:
• the extended scheme will apply at a top rate of $1,200 per employee (down from the current $1,500) per JobKeeper fortnight from 28 September 2020 until 3 January 2021, then drop to $1,000 until 28 March 2021;
• lower rates will apply for part-time and casual employees; and
• businesses will be required to re-test their eligibility for the payment scheme to access the extension.
Changes to turnover test
The latest changes relate to the eligibility test announced in JobKeeper Version 2.
JobKeeper Version 2 originally required that, from 28 September 2020, businesses and not-for-profits seeking to claim JobKeeper payments would have to meet a further decline in turnover test for each of the two periods of extension, as well as meeting the other existing eligibility requirements. That is, at that time businesses would have been required to reassess their eligibility for the JobKeeper extension with reference to their actual turnover in the June and September quarters 2020.
The PM has eased the proposed changes to turnover tests for businesses Australia-wide.
The changes mean that businesses will now only be required to show the requisite actual decline in turnover for the September quarter, rather than for both the June and September quarters. Similarly, businesses will only need to demonstrate a decline in turnover for the December 2020 quarter, rather than each of the June, September and December 2020 quarters.


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