Developments for Victorian Business Support Funds and JobKeeper

Many businesses and individuals will be affected by new developments in the second phase of Victoria’s Business Support Fund grants and the JobKeeper Program. Both national and state governments continue to seek ways to improve the economic relief measures.

Second Phase of Victorian Business Support Fund Grants

The Victorian State Government has announced that it will expand its Business Support Fund grants program to make more Victorian businesses eligible. Support will be expanded to include businesses who:

• Have wage bills less than the payroll tax threshold of $650,000; and
• Are participating in the Commonwealth JobKeeper program.

This applies to any business that meets these stipulations, regardless of which sector they operate in. Applications previously rejected because of a business not being in an eligible industry sector, (but are now eligible), will be automatically reprocessed.

Sole traders remain ineligible for the fund, regardless of their eligibility for JobKeeper. Businesses with a turnover of less than $75,000 are ineligible under the current program and it has not yet been clarified if this criterion will remain in place, though it is likely.

Applications for the expanded program will open in the coming days and close on Monday 1 June, 2020. Those looking to apply for the current program can still do so here.

Morrows has assisted many of our clients with successfully accessing the program. Should you wish to discuss your eligibility or make an application for payment from the fund, we would be delighted to assist as required.

JobKeeper Reimbursement Applications Open

As of Monday, eligible businesses can apply for reimbursement for amounts paid to eligible employees under the JobKeeper Payment program. We have seen that the ATO is beginning to release funds to some of our clients in the last 24 hours. Needless to say, this has been a very welcome relief for these businesses.

Morrows would like to remind our clients that that the deadline to make reimbursable payments for the first two JobKeeper fortnights within April is today, Friday May 8, 2020. Enrolment and reimbursement application for this period remains open until the end of May, but payments to employees must be made today. We would also like to remind our clients that if you are managing the JobKeeper process yourself, this application must be made each month through the ATO’s Online Services in order to ensure the reimbursement continues to be paid.

Further JobKeeper Clarification

The rules that govern eligibility for the JobKeeper Program have been updated to formalise the changes previously communicated by the Treasurer.

These amendments have multiple implications; those most relevant to Morrows and our clients are summarised here:

• Providing a modified decline in turnover test for Income Tax consolidated, groups which can consolidate, or GST groups, in respect of an employer entity whose principal activity is the provision of employee labour services to other members of the group.
• Including a notification requirement to confirm that all employees of a participating entity must be given the opportunity to agree to be nominated (the one in, all in rule). For employers seeking JobKeeper payments for the transitional fortnights to 26 April 2020, this notice must be given by May 8, 2020 (i.e. no later than 7 days after the commencement of the amendment).
• Imposing additional requirements that must be met for children who are 16 or 17 years old on March 1, 2020 to be eligible nominees. These employees must be considered ‘financially independent’ under the meaning of the Social Security Act.
• Making a technical amendment to clarify that a business seeking JobKeeper payments for one business participant must demonstrate a substantial decline in turnover.

The ATO has clarified that businesses that have already paid the $1,500 a fortnight to employees that are now deemed ineligible will be reimbursed for that fortnight.

The Treasury department fact sheet has been updated to reflect these changes and can be found here.

The ATO has also reiterated that once a business is eligible for the JobKeeper Payment, it will remain eligible for the duration of the program. The ongoing monthly reporting of revenue through the JobKeeper Declaration is for statistical and economic monitoring purposes only.

The State Revenue Office and WorkSafe Victoria have both clarified that ‘top up’ JobKeeper payments to employees will not be included in calculations to determine Payroll Tax or WorkCover premiums.

Morrows is available to answer questions you have about any of the above matters. If you wish to work with us to determine your and your employees’ eligibility for the JobKeeper Program, need assistance with the application process, please contact your Morrows Business Advisor.