The ATO has announced an extension of time for employers who wish to enrol for the first two JobKeeper fortnights to 31 May 2020.
Additionally, the ATO has announced an extension on payment of the first two-fortnight pay runs from 30 March to 12 April, and 13April to 26 April, to the 8May.
An issue that many small businesses have faced has now been addressed covering the big problem where, in some cases, JobKeeper payments were bigger than the usual wages paid by the employers to their employees. The challenge for many small business employers was the requirement to pay the extra wages for four weeks before the ATO gave them the JobKeeper payment!
An example is where an employer might have ten casuals on approximately $300 a fortnight, which meant she had a casual wage bill of $3,000 for that period, but with JobKeeper, she now has to pay them $1,500 a fortnight, which will be $15,000 times two in April, which is $30,000. With this requirement, many businesses were unable to pay the wages and became ineligible for the JobKeeper payments.
However, the Government has now changed its policy.
If a small business employer can’t meet the cash flow requirements over April to cover the proposed JobKeeper payments, as long as those payments are made by the 8 May, and that’s AFTER the ATO has paid the employer the money, then the small business can stay in the JobKeeper programme.
The obligation is still on the employer to make payments of 2 x $1,500 to each employee by 8 May, and only then is the employee eligible. If this date is not met, then the employer will lose the JobKeeper reimbursement, and the employees denied the benefit of the first two fortnight payments.
The extension of time given by the ATO has allowed businesses further time to make these payments and if need, get financing arrangements in place.
If you need assistance with enrolling for the JobKeeper programme, please call us.
In summary, businesses now have until 31 May 2020 to ENROL to claim and until 8 May 2020 to PAY the first 2 fortnight payments.