JobKeeper – Change to Eligible Employees

The amendments to the JobKeeper Rules to change the reference date for eligible employees to 1 July 2020 have now been registered.

Employees at 1 July 2020 now eligible employees for JobKeeper

Effective from the fortnight beginning 3 August 2020, employees will be eligible employees for JobKeeper if they were either:
– a full-time or part-time employees on 1 July 2020; or
– a long-term casual employee (employed on a regular and systematic basis for at least 12 months) as at 1 July 2020 and not a permanent employee of any other employer.

This will therefore bring in employees that after 1 March 2020 and by 1 July 2020:
– have started employment (if full-time or part-time employees);
– have reached 12 months of casual employment;
– have turned 18 years of age (and were not previously eligible);
– are aged 16 or 17 years and have started living independently or have ceased full time study; or
– became residents or holders of a Subclass 444 (Special Category) visa.

Employees that nominated for JobKeeper with Prior Employer

An important change is that employees can also now be eligible if they have previously nominated as an eligible employee or eligible business participant of another entity. In order to be an eligible employee with the new entity, the individual must have ceased their employee or business participation with the first entity before 1 July 2020 (and therefore ceased receiving JobKeeper payments), and commenced their employment with the new entity by 1 July 2020.

Nomination Notices

The new rules state that an employer must give all employees a nomination notice within 7 days from the rules being implemented unless:
– They have previously been provided a nomination notice; or
– The entity reasonably believes they do not satisfy the requirements.

This means nomination notices need to be provided to newly eligible employees by Friday 21 August 2020.

The ATO have released a new nomination form for 1 July employees:
https://www.ato.gov.au/forms/jobkeeper-payment—employee-nomination-notice/

The employer must then provide notice to the Commissioner about the individual and their nomination, and notify the employees that this has been completed within 7 days of notifying the Commissioner.

Wage Condition

The ATO will allow the wage condition to be met for the fortnights beginning 3 August 2020 and 17 August 2020 by 31 August 2020 for newly eligible employees.
https://www.ato.gov.au/General/JobKeeper-Payment/JobKeeper-key-dates/

This means that if any top-up amounts are required for these employees, employers have until 31 August 2020 to do this (rather than it being required by the end of the fortnight).

1 March 2020 Employees

The eligibility status of employees that met the requirements as at 1 March 2020 is preserved. This means that they do not need to re-test eligibility at 1 July 2020.

This includes former eligible employees who ceased employment after 1 March 2020 and are re-employed after 1 July 2020. However, the employee must have not also been eligible in respect of another employer in regard to the 1 July reference date. The employee must therefore provide a notice to an employer by the later of 7 days of re-employment or 21 August 2020 (being 7 days after the rules were implemented) that states whether or not they have provided a nomination notice to another employer.

Summary

In summary, employers now need to:
1. Assess which employees become eligible employees for JobKeeper payment from 3 August 2020 based on the above changes.
2. Provide nomination notices to new employees by 21 August 2020.
3. Obtain required confirmation from any returned employees by 21 August 2020
4. Notify the ATO of the newly eligible employees by 31 August 2020.
5. Make any top-up payments for these employees by 31 August 2020 to ensure the wage condition is met.
6. Notify the newly eligible employees that the information has been provided to the Commissioner (within 7 days of #4).

Contact Us

For further information, or for general assistance, please contact our Directors, Jacci Mandersloot or Natalie Claughton.

The information contained in this bulletin is intended to  provide  general information only and is not intended to serve as tax advice. Specific advice should always be sought regarding a taxpayers’ particular circumstances. Please contact MC Tax Advisors if you would like assistance with the issues identified in this bulletin.