PM announces pandemic leave disaster payment for Victoria

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 changes: turnover test and employment start date

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.

JobKeeper reference date now 1 July 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.

Extension of JobKeeper “UPDATED”

The Treasury has announced the following update in relation to the JobKeeper program:

1. JobKeeper 1.0 will remain till 27 September 2020 and
2. thereafter, JobKeeper 2.0 will continue for a further six months till 28 March 2021.

The changes to JobKeeper are:

• There will be two rates of JobKeeper payments for eligible businesses (including self-employed) and not-for-profits:

1. From 28 September 2020 to 3 January 2021:

• A $1200 payment per fortnight for:

  –  eligible employees who worked 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and

  –  eligible business participants who were actively engaged in the business for 20 hours or more per week on average

• A $750 payment per fortnight for other eligible employees and business participants.

2. From 4 January 2021 to 28 March 2021:

• $1000 payment per fortnight for:

  –  eligible employees who worked 20 hours or more a week on average in the four weeks of pay periods before either 1 March 2020 or 1 July 2020, and

  – eligible business participants who were actively engaged in the business for 20 hours or more per week on average

• A$650 per fortnight for other eligible employees and business participants

The JobKeeper payment will be tapered in the December and March quarters to encourage businesses to adjust to the new environment, supporting a gradual transition to economic recovery. The two-tiered payment aims to better align the payment with the incomes of employees before the onset of the COVID-19 pandemic.

• Further changes were announced on 7 August 2020 to adjust the employee reference date for eligibility and make it easier for organisations to access JobKeeper. From 3 August 2020, the relevant date for employment will move from 1 March to 1 July 2020.
• The thresholds for the decline in turnover test will remain the same but now the test must be applied at several points:

  –  To be eligible for the JobKeeper payments from 28 September 2020 to 3 January 2021, businesses and not-for-profits must satisfy the relevant decline in turnover test for the September quarter 2020 (July, August, September) only based on actual GST turnover.

  –  To be eligible for the JobKeeper payments from 4 January 2021 to 28 March 2021, businesses and not-for-profits must satisfy the relevant decline in turnover test for the December quarter 2020 (October, November, December) only based on actual GST turnover.

The requirement to reassess the eligibility for the JobKeeper payments over the extension period is to ensure that only the businesses that need the most help will continue to receive the payments.

The JobKeeper payment will remain open to new recipients provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.

The Commissioner of Taxation will have discretion to set alternative tests where an employee’s or business participant’s hours were not usual during the February and/or June 2020 reference period.

The period with the higher number of hours worked is to be used for employees with 1 March 2020 eligibility.

Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper payment (before tax), based on the payment rate that applies to each employee (i.e. the wage condition).

The changes are expected to be implemented through amendments to legislation and the legislative instrument, Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.

If you have any questions, please contact your Accountant for further clarification.

The Treasury has announced the following:

1. JobKeeper 1.0 will remain till 27 September 2020 and;
2. thereafter, JobKeeper 2.0 will continue for a further six months till 28 March 2021.

The changes to JobKeeper are:

• There will be two rates of JobKeeper payments for eligible businesses (including self-employed) and not-for-profits:

1. From 28 September 2020 to 3 January 2021:

• for eligible employees and business participants who worked 20 hours or more a week on average in the month of February 2020 – A$1200 per fortnight
• for eligible employees and business participants who worked less than 20 hours a week on average in the month of February 2020 – A$750 per fortnight.

2. From 4 January 2021 to 28 March 2021:

• for eligible employees and business participants who worked 20 hours or more a week on average in the month of February 2020 – A$1000 per fortnight
• for eligible employees and business participants who worked less than 20 hours a week on average in the month of February 2020 – A$650 per fortnight.

The JobKeeper payment will be tapered in the December and March quarters to encourage businesses to adjust to the new environment, supporting a gradual transition to economic recovery. The two-tiered payment aims to better align the payment with the incomes of employees before the onset of the COVID-19 pandemic.

• The thresholds for the decline in turnover test will remain the same but now the test must be applied at several points:
  • To be eligible for the JobKeeper payments from 28 September 2020 to 3 January 2021, businesses and not-for-profits must satisfy the relevant decline in turnover test for the June quarter and for the September quarter based on actual GST turnover.
  • To be eligible for the JobKeeper payments from 4 January 2021 to 28 March 2021, businesses and not-for-profits must satisfy the relevant decline in turnover test for each of the June, September and December quarters based on actual GST turnover.

The requirement to reassess the eligibility for the JobKeeper payments over the extension period is to ensure that only the businesses that need the most help will continue to receive the payments.

The JobKeeper payment will remain open to new recipients provided they meet the existing eligibility requirements and the additional turnover tests during the extension period.

The Commissioner of Taxation will have discretion to set alternative tests where an employee’s or business participant’s hours were not usual during the February 2020 reference period.

Employers will continue to be required to make payments to employees equal to, or greater than, the amount of the JobKeeper payment (before tax), based on the payment rate that applies to each employee (i.e. the wage condition).
The changes are expected to be implemented through amendments to the legislative instrument, Coronavirus Economic Response Package (Payments and Benefits) Rules 2020.

Changes to the JobSeeker program include:

• The JobSeeker coronvirus supplement will decrease to A$250 a fortnight from A$550. Therefore, people on JobSeeker will receive a decrease from A$1100 to A$800 (base rate of A$550 plus the coronavirus supplement) per fortnight after September.
• Recipients will be allowed to earn A$300 a fortnight before facing a reduction in their Government payment.
• Easing of restrictions for sole traders.

In conjunction with the Government’s announced changes, Treasury has released the report, The JobKeeper Payment: Three-month review. The Government considered the findings in the report in formulating its changes to the JobKeeper payment.

If you have any questions, please contact your Accountant for further clarification.

About the program
The NSW government have introduced new measures to help provide relief for landowners of residential and commercial landowners who provide a reduction in rent to a tenant who is experiencing financial distress as a result of the COVID-19 crisis.

The COVID-19 land tax relief is intended to reduce a landowner’s land tax payable for 2020, by up to 25% for a taxable parcel of land where rent relief has been given to the tenant who occupies the land.

Landowners whom are eligible for the reduction may also defer their land tax payments by up to three months.

Reduction in land tax payable
If you are eligible, you will receive a reduction in your land tax payable for the 2020 Land Tax Year. Subject to the terms provided in the guidelines below.

The reduction will be the lesser of:

• the amount of rent reduction provided to a tenant for any period between 1 April 2020 and 30 September 2020,
• 25% of the land tax attributable to the land leased to that tenant.

Land tax attributable to a parcel of land is calculated as follows:

Taxable value of the land divided by aggregate taxable value of all parcels of land, multiplied by landowners’s 2020 land tax liability.

If you haven’t completed payment of your land tax before 2020, the relief will reduce or offset the amount you have left payable. If you have already paid your land tax for 2020, the reduction can be refunded to you.

3 month deferral of outstanding land tax
If you are eligible for this program, and receive a reduction, you’ll also be able to have your outstanding land tax payments deferred for up to three months

Eligible criteria
You will be eligible if:

• you’re leasing a parcel of land to:
  – a commercial tenant, who has an annual turnover of up to $50 million, or
  – a residential tenant
• the tenant is in financial distress as a result of COVID-19,
• you reduce the rent of the affected tenant for any period between 1 April 2020 and 30 September 2020, and
• for 2020, you have land tax attributable to the parcel of land leased to that tenant.

Financial distress
A tenant is considered to be in financial distress where:

• for commercial tenants – there is a reduction in turnover compared to a previous comparable period of 30% (or more),
• for residential tenants – there is a reduction in household income of 25% (or more).

You are responsible for verifying that your tenant is in financial distress.

Rent reduction
In order to be eligible, the rent reduction must not be required to be paid back at a later date. If a reduction in rent is provided, but is required to be paid back at a later date, this is considered to be a deferral of rent and will not be considered as a reduction of rent under this program.

If you are not eligible for the reduction in land tax or a deferral in land tax repayments under this program, but are experiencing difficulty in paying, you can still apply for a payment plan, to extend your payment due date. Click here to apply.

How to apply
To apply for the 2020 land tax COVID-19 relief, you will need to do so via Service NSW. Click here to access the application to apply for the program.

You will need the following too complete your application:

• MyServiceNSW Account
• Land Tax Client ID (can be found on your land tax assessment notice in the top right corner of the front page)
• Land Tax Correspondence ID (can be found on your land tax assessment notice in the top right corner of the front page, under the Land Tax Client ID)
• Land details for the parcel of land you are applying for the relief for
• Supporting documentation to demonstrate eligibility for the program
  (examples of supporting documents include, but are not limited to:
  – to demonstrate that your tenant is in financial distress, as defined in the guidelines provided by Revenue NSW. (eg. your tenant’s financial statements, a letter from their accountant or property manager etc.
• Your tenant’s permission to share their information with Revenue NSW.

Should any additional evidence be required to help establish the eligibility or validity of an application, Revenue NSW will contact the applicant directly.

Revenue NSW have advised that their aim is to process applications on a 30 day turnaround.

Other conditions
If you are applying for this program, once you have submitted the application, you must notify Revenue NSW by submitting an amended application as soon as possible, if there are changes in your circumstances or eligibility for this program. This includes a change in tenant or a change in rent during this period for which an application has been submitted.

An amendment to an application may result in a change to the amount of reduction in tax previously provided, under this program.

Any reassessment of a 2020 land tax liability that occurs after a reduction in land tax previously provided to you under this program.

Applications submitted for the 2020 Land Tax COVID-19 relief will be subject to potential compliance review for legitimacy.

Eligibility of both landowners and tenants can be reviewed to confirm that relief under this program has been submitted correctly.

Providing false or misleading information in an application for this program, or not notifying Revenue NSW of any changes in your circumstances, may result in a land tax reduction under this program being revoked. It is also an offence to provide false or misleading information and penalties may apply.

We have seen a large number of clients enrolling for the $1500 a fortnight JobKeeper payment being offered by the Federal Government. If you have not enrolled or need to revisit your current situation please see our Covid-19 series of articles on our website. The government has extended the time to enrol to 30 May 2020.

As of 4 May 2020 the tax office will be accepting declarations of eligible for employees and business turnover reductions for employers to assess payment of the first two Jobkeeper instalments for the fortnights ended 12 April 2020 and 26 April 2020. Payments will be made to eligible employers nominated bank accounts from the first week in May 2020.

Employers will need to pay eligible employees a minimum of $1500 for each of these fortnights BEFORE 8 May 2020. One payment of $3000 can be made as long as it covers these two fortnights. Note the tax office has extended this date from that previously advised.

Recap of  Jobkeeper steps required to this point

1. Check if you and your nominated employees meet the eligibility requirements.
2. Notify eligible employees that you (their employer) intend to participate in the JobKeeper scheme.
3. Send eligible employees the JobKeeper Employee Nomination Notice to complete and return to you.
4. Keep the Employee Nomination Form on file for five years.
5. Pay the minimum $1,500 to each eligible employee per JobKeeper fortnight. The first fortnight starts on 30 March and ends on 12 April. Alternatively, employers can make one combined payment of $3,000 for the first two fortnights paid by end of 8 May 2020.
6. Enrol for JobKeeper from 20 April using the Business Portal and authenticate with myGovID or have enrolment processed by a tax professional through the online tax agent portal.
7. Subscribe to updates on the ATO website, so the ATO can advise when new information is available.

Steps in preparing eligible employee declaration and reduction in turnover (employer ) declaration

1. Assess eligibility  of employees jobkeeper-payment/employers/your-eligible-employees
2. Assess business turnover reduction for employers jobkeeper-payment/employers/eligible-employers
3. Report information to the tax office

For businesses set up for Single Touch Payroll (STP) enabled software

All of the relevant information will be captured within your STP enabled software. The major software providers have added functionality to assist in calculating eligibility for both employees and for the reduction in business turnover. Whilst this functionally is of great assistance in reporting Jobkeeper information there are several requirements to set up the reporting which you may require our assistance. Should this be the case the Economos team have been fully trained on these systems and are ready to assist where required on a do and charge basis. (We strongly suggest if you do not have STP compliant software that you ask for our advice on setting it up the right software package for you).

For businesses not set up for Single touch Payroll (STP) enabled software

To lodge declarations you will need to do this manually through your business portal using your myGovId or through our professional tax agent portal. Please contact your partner or manager if you require our assistance. (Fees will apply based on the complexity of your situation).

The Commissioner of Taxation has released several different (alternative) tests to assess decline in turnover when applying for JobKeeper payments. Previously the government released what is known as the “basic test” to assess a fall in revenue compared to a previous comparable period e.g March 2020 compared to March 2019.  Where businesses have special circumstances which make this comparison difficult these new  “alternative tests” may be used.

The alternative tests apply in the following cases:

• commencement of a business;
• acquisition or disposal of a business;
• business restructures;
• substantial increases in turnover during a prior period;
• drought or natural disasters;
• irregular turnover periods that are not cyclical;
• where there is sickness, injury or leave of a sole trader or a partner of a small partnership.

Basically, the taxation commissioner may apply these tests if  “some event or circumstance … outside the usual business setting” makes the relevant comparison of turnover used in the ‘Basic Test” inappropriate. If these new tests are satisfied, businesses may still meet the decline in revenue test which (subject to other criteria)  may make the $1500 a fortnight JobKeeper payment available to all eligible employees.

Further reading can be found at JobKeeper Decline in Turnover tests.

Next Steps
The application of the Alternative Test Rules is very fact specific and requires a number of GST turnover calculations to be made. Due to the wide reaching nature of the alternative tests, clients will likely be able to test using at least one of these alternative methods. Given the deadline for access to the first two JobKeeper payments is drawing near, clients should start looking at these alternative tests now. Please contact your Economos partner or manager for further information or for assistance in applying these measures.