In the webinar, Tony was able to answer a range of questions that we have received but we weren't able to cover them all so you can read additional questions below that Tony has provided responses for.
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Are super Funds eligible for JobKeeper payment just like other trusts? For example, if the super fund has a rental property and there is a significant reduction in the rental income for the super fund?
Super funds may be deemed by the Tax Office to be running a rental property business. But it is unlikely to accept that the super fund is running this type of business if the fund only owns one property.
Nevertheless, if a super fund is running a business then it would be eligible for JobKeeper for its employees in the normal way - that is for a trust it must have at least one adult beneficiary.
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What documents will Super Funds require for the early release under COVID19? I have a client who did not receive wages from their business (were taking loan drawdowns and at year end, gets paid a dividend or wage). They do not have payslips to support a drop in working hours of 20% or more or drop in remuneration. What will the super funds require in this circumstance?
Application for early release of super is made directly to the ATO via an individual's MyGov account. The individual self-assesses their eligibility to the scheme. In the normal way the ATO can impose penalties for false and misleading statements.
Once an application is made to the ATO it will pass relevant information onto super funds which will then process the payments
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When is Jobkeeper going to finish?
27 September 2020 at the latest. The rules, however, allow for this finish date to be altered to a date either earlier or later if the government so decides.
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Are people over age 67 eligible for job keeper payments whether self-employed or employees?
Eligibility for JobKeeper is based on the circumstances and not dependant on a person's age.
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A client has seen their pay reduced by 20%. They have not been specifically directed to reduce their hours by 20% but the hours have reduced because they are working from home and their job is usually dependent on going to see customers. They are a part owner in the company that has reduced their income by 20% but not a significant shareholder.
Are they still eligible for an early release of super?
The eligibility for early release of super is found on the ATO website
It says that because of the coronavirus economic downturn an employees hours have been reduced by at least 20%. A different rule applies to those who were self-employed.
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If I need to reduce working hours by 20% and have option of using annual leave to replace it so my pay is the same, can I still be eligible for early super withdrawal?
As noted above further details about eligibility are found on the ATO website. If you have remained employed then your hours must have reduced by at least 20% because of the coronavirus economic downturn.
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Does an employee who was been employed on a permanent part-time basis for a number of years with an employer who, resigned to recommence with the same employer as a casual employee in a different capacity with only a few days break, count as eligible as a casual who has been employed for at least 12 months?
Assuming this question relates to the JobKeeper scheme, you would be best asking this question to industrial relations experts.
Section 9 of the Coronavirus Economic Response Package (Payments and Benefits) Rules 2020 says that an employee is covered if they were employed on 1 March 2020 (or were a long-term casual on that day).
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Regarding the JobKeeper top up payment, does the ATO strictly require that we to pay $1,500 each fortnight or we can pay the top up before end of April 2020?
Example scenario: Fortnight 1 employee paid $800 and Fortnight 2 paid employee $2,400. Does this mean that no top-up is needed or does Fortnight 1 need top up of $700?
Fortnight one and fortnight two payments needed to be paid by 8 May 2020. Fortnight 3 payments needed to be paid by 10 May 2020. The payment dates for other fortnights can be found here.
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If someone is stood down and only receiving JobKeeper now, do we need to pay SG (Super Guarantee)?
Jobkeeper is defined at ordinary time earnings for Super Guarantee purposes. There will be an amendment as to how this works for some employees. We are currently unsure when this amendment will be made.
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Is there any possibility of a company applying for the JobKeeper programme if the main revenue reduction is investment earnings that are not reported on the BAS return? For example, capital losses on an investment portfolio that is marked to market and reported as revenue for annual accounts.
One of the requirements to access JobKeeper is that there is a decline in GST turnover (this applies for both the basic and alternative tests). If the amount that has declined is not included in GST turn-over then it may be difficult to meet this requirement.
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If someone normally earns say $2000 per fortnight but is only getting $1500 jobkeeper, please confirm that super guarantee is on the $2000 not the JobKeeper amount
It is our understanding that SG will be payable on the $1,500 per fortnight. As noted above we believe the government will amend to law to ensure the law works as per their policy announcements.
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Any update if the government is looking at paying job keeper for the services trusts?
JobKeeper and Service entities are addressed in two documents. See Example 4 of PCG 2020/4 and this legislative instrument.
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What documents does the SMSF need before release the $10,000?
Application for early release of super is made directly to the ATO via an individual's MyGov account. The individual self-assesses their eligibility to the scheme. In the normal way the ATO can impose penalties for false and misleading statements.
Once an application is made to the ATO it will pass relevant information onto super funds which will then process the payments.
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I have a client who now lives overseas, age 44, can she get the super out under covid-19 even though she is not here?
Based on the eligibility criteria it does not appear to apply only to those residing in Australia. The key issue is that since 1 January you have been impacted by the coronavirus economic downturn as required by the access rules.
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For Jobkeeper ($1500/fortnight), I wanted to confirm that you pay employees fortnightly Gr $1500 tax = X Net $(1500-x)?
Yes this is our understanding of the rules.
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Any providers of documentation (i.e. minutes and resolutions) for rental relief and borrowing relief that you know of?
Cleardocs are currently working on new documents in this area that we hope to make available soon. We will an update in ClearNews in the coming weeks.
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In House Assets - Ungeared Property Trusts (Reg 13.22). If rental deferrals or waivers are given in these entities, they are likely to become in house assets. The ATO has said it will not take compliance action in relation to these where the issue arises from COVID 19 - but do they have that discretion? It was my understanding that once the Reg 13.22 rules were broken, they couldn't be fixed. The asset is an In-House Asset and must be disposed of? Surely the ATO doesn't have discretion at this stage?
The ATO says it will not take compliance action - see ATO FAQ.
The ATO may amend the Auditor Contravention Report accordingly. You may wish to get legal advice about this issue.
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If retirees have already pulled out more than new revised minimum pension factors can it be recontributed?
Yes, if they are eligible to contribute under normal super contribution rules.
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I have a client who wants to come into the JobKeeper scheme from the second fortnight of April. Is there anything preventing the employer from nominating which fortnight to enter the system? Turnover is down 30% April 19 to April 20.
Provided that the client has the relevant paperwork and payments completed in the specified time framework (note that there are very particular dates and timing) the client can nominate which fortnight to enter the JobKeeper system.
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For JobKeeper claim in regards shareholder of company business, is any cash payment to shareholder necessary?
No. The wage condition, which specifies that the $1,500 has to be paid relates to employees, not eligible business participants. There is no requirement for the business entity to pay the eligible business participant
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Re SGC (super guarantee charge) for staff with variable hours to now? What is "normal" earnings?
For most employers it is ordinary time earnings.
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If a business isn't meeting the 30% reduction currently, but will likely come July/August can they register then and receive the job keeper for the shorter period?
Provided that the client has the relevant paperwork and payments completed in the specified time framework (note that there are very particular dates and timing) the client can register to enter the JobKeeper system at a later point in time
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If ordinary time = $2000/fn & gets $1500 JobKeeper, then employer to pay top up $500, so is SG on $2k?
SG (Super Guarantee) in these cases will be paid on $2,000 pf.
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Are seasonal employees who work for three months of the year and have done for 5 years eligible for JobKeeper?
JobKeeper only applies to employees (other than casuals) and to long term casuals who have been regularly employed for more than 12 months or eligible business participants. You need to determine what type of worker the seasonal worker is. This is an employment law issue which we cannot comment upon.
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A client purchased a supermarket at the end of November 2019 and started operating in December. January to February 2020 was affected by bushfire and had reduced turnover. In March, panic buying had increased sales as well in increased sales during the Easter week. Will it be appropriate to seek December as comparable period or seek commissioner discretion for alternate test to qualify for JobKeeper?
The basic test will not apply in this situation. The alternative tests would need to be used. In this case either the new to business or the bushfire tests could be used.
The bushfire test refers to the same period in the year immediately before the bushfire declaration - which does not exist in your case which leaves you with the new to business rule.
The new to business rules require the bushfire affected months to be excluded and for you to calculate either the annual monthly turnover or use the 3 months period's current GST turnover to compare quarter or divide by 3 to compare month.
The alternative turnover tests are self-assessed using the rules in this legislative instrument.
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Why would you need to pay SGC on the $1,500 for a stood down employee if they are not performing any work? I would think this does not qualify as OTE?
Because they are still technically employed and being paid a salary. Jobkeeper is part of Ordinary Time Earnings.
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If I make a personal super contribution of $20K in June (planned due to asset sale), can I access the super release in June/July as well
If you satisfy the eligibility criteria for early release of super .
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To qualify for the early release scheme, is there a minimum time frame for the 20% reduction? eg. Reduction of 20% hours has to be for four weeks or more? Or, as long as there is a 20% reduction, you qualify, even only for one week?
Please see the rules described here.
From 1 January 2020 "your working hours were reduced by 20% or more (including to zero)".
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Would a person who was made redundant last year and is now "employed" by their own business/company (which is less than a year old) but can't afford to pay the wage anymore, be eligible for Jobkeeper?
The ATO and Tax Practitioners Board have noted that difficult cases are resulting in some boundaries being pushed. It is worth having a look at the following documents:
- Treasury has issued a JobKeeper integrity fact sheet
- The ATO web pages that will be of interest include:
You will need to consider what documentation exists to support JobKeeper claims. Some situations may result in people looking to claim JobSeeker rather than JobKeeper
Our understanding was that if you are stood down, not working and only receive JobKeeper then no SGC is payable. Are you saying that it is payable?
Yes, it is out understanding that SG (Super Guarantee) is still payable
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If you are working as an employee for 4 days a week but run a business through a family trust (no employees), is the business eligible for JK payment if the business turnover meets the 30% decline criteria and does not claim the JK payment from the employer?
A person cannot be an eligible business participant if they are an employee (other than a casual employee) - refer rule 12(4)(b)(ii). This rule refers to employee not eligible employee, thus declining to be nominated will not change this situation.
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Can businesses claim JobKeeper for a new employee hired during this time that JobKeeper is available?
A person must have been an employee as a 1 March 2020, so people recruited after 1 March 2020 will not be able to access JobKeeper.
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Is there any restriction in terms of early accessing of super and making concessional personal contributions?
We believe that as long as access to both policies meets all relevant rules then there is no restriction.
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For early release of super - is it only 20% reduced hours required or does ATO look at client's personal circumstances as well (like savings etc.)?
No, the ATO asks for a declaration of a 20% reduction in hours for those who are employed.
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If someone is stood down, the wage is zero. If he was paid Jobkeeper of $1500, why does the employer have to pay SG?
Because Jobkeeper is defined as salary and wages (it is subject to PAYG withholding).
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If you are on unpaid maternity leave, do you meet the definition of unemployed and hence can access super?
Only those who have reduced hours (or self-employed and have reduced income) because of the coronavirus economic impact can access super.
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Can ACNC registered Non-Profit organisations be eligible for JobKeeper?
Charities generally need to meet the same criteria. The decline in aggregated turnover is less - being 15% and how the turnover is calculated is different. Refer to the legislative rules that can be found here and here.
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