The “Santa Claus” Treasurer, as Peter Switzer calls him, answers your questions about Job Keeper, Job Seeker and more:
Will sole traders be able to do Job Keeper?
Yes…whether you’re part-time or full-time, casual, sole traders or those who work in non-for-profit will all benefit.
If you’re 2 partners in a business can both get JobKeeper?
It’s one per entity in relation to that and of course you’ve got to meet the turnover test.
Where do people go to see the details around the turnover test?
ato.gov.au is where they register their interest and the ATO is already providing guidance notes and digital information for employers to provide to their employees…their first payments will go from the first week in May. Treasury.gov.au website also provides some fact sheets.
Does the employer take tax out of the $1500?
It’s treated as taxable income and that’s consistent with similar programs overseas.
Does the money go to the employer first and he/she passes it on to the employee?
The money is given through the employer to the employee. The whole idea is to maintain that form of connection between the employer and employee so we can bounce back stronger on the other side.
Is the 9.5% super taken out of the full amount or the amount that’s relevant to the wage the wage earner usually gets?
For example, if you were usually earning $1000 a fortnight but now you’re getting the Job Keeper payment and you’re getting $1500 a fortnight, then the SG would be paid on that first $1000 but doesn’t need to be paid on the additional $500.
If the worker is on the $1500 and has effectively been stood down, the super doesn’t have to be paid is that right?
Not if you’re stood down, the SG is not being paid on that straight $1500 payment. But if the business continues to operate and you continue to get the amount you were getting pre-pandemic, yet the wage subsidy is helping you then the SG will be paid in the normal way.
If you put your hand up for job seeker but then the additional packages come along and you get Job Keeper, can you switch and how do you switch?
That’s when you engage directly with your employer but also with Services as well.
If a casual was only on $200 a fortnight, will they get the $1500?
They do! And there are some people who will be receiving more through the Job Keeper package than otherwise would be the case. But that casual employee has to fulfil the criteria. Namely, that they need to have been in a regular and systematic working relationship with the employer for 12 months or more.
Can you do casual work and keep your Job Keeper payment (eg, driving cabs on the side)?
You can and obviously you’ve got to work through your employer. But we’re not wanting people to earn less we’re wanting them to earn more.
I guess you’re wanting people to spend every dollar of it to keep the economy going?
Well as you know Peter, more than $4.5 billion has recently made its way into people’s pockets with the $750 cash payments that were part of our first branch. All that money has been spent and no doubt this Job Keeper money will be spent too.
I’ve worked for someone for 3 years. I stopped working for 3 months, I’ve come back for 4 months. I don’t pass the 12-month test as a casual worker. Does the fact I’ve been there for a long period of time give me any compensation?
No again, we go with the Fair Work concept. It’s an established concept of having regular and systematic connections to your employer for 12 months.
A question from employers. I’ve done okay in March, but April and going forward my business is going to be absolute chaos. How do I prove that my revenue has gone down?
In the event that you’re expecting your turnover to decline as a result of the pandemic, you should register your interest with the ATO, provide them with the relevant information and you will become eligible as a result of your turnover falling below the threshold.
I think a lot of people are confused around the tax rebate. So I’m an employer, I remit taxes to the ATO for wages for my employees (tax reheld) and we’ve read that there’s backpayments. Effectively is there two periods starting from January through to April and then May to September 27?
You’re talking about the cash flow boost that we’re providing to small businesses. Hundreds of thousands of small businesses will benefit and the amount they will receive is a reflection of the size of their wages bill. There will be a minimum of $20,000 paid to those eligible businesses and a maximum of $100,000 will be in those two payment periods.
So effectively, if you’re an employer as I am, you send the money off to the ATO like you normally do, but the ATO will give you a credit for the amount you’ve paid. And if I’ve only sent $7000 over that period, I would get $10,000 back in the first period and another $10,000 back in the other?
The minimum you can get is $10,000 in that period and a maximum of $100,000 over those two periods. It will be done automatically by the tax office. You don’t have to fill any forms.
What if my business is reasonably new, I’ve only been going for 3 or 4 months, I’ve got employees I’m clearly on a roll, is that going to be a matter of going to the ATO and just basically proving the case?
Well there is a discretion there with the ATO because as you say some businesses are start-up businesses so they don’t have a comparable period last year with their turnover to compare to what is happening to them this year. You’ve got a situation where businesses may have been going through the drought last year, therefore their turnover would be unusually low, which doesn’t provide a realistic base to compare their turnover this year to. So we’ve allowed for the tax commissioners to have a discretion because we want to be as flexible as possible so that this program can help as many people as possible.
If someone wants to access their super, there’s a deadline isn’t there?
April 20 is when we’ll start to see those registrations take place. Already people are indicating their interest on the mygov.com.au website. From that date we will start to see the information provided by the ATO onwards to the super funds and the super funds are expected to provide that money to people as soon as possible. Importantly, you have to understand there’s an existing hardship provisions within the superannuation system. What we’re doing is building on that because ultimately it’s the people’s money. There’s $3 trillion worth of money in super and treasuries initial forecasts was around $27 billion would be called on early by people. So that’s less than 1%. We’re also ensuring that money is taken out tax free.
What has the take-up been like on the Job Keeper support and how many businesses have applied?
Well more than 850,000 have already indicated their interest on the ATO website. That represents sole traders, big businesses, small businesses, those in the NFP sector. We’re estimating around 6 million Australian workers will be eligible for this scheme. That’s nearly half the Australian workforce.
Do we have sufficient dry powder options post-six months, that is after September?
Well we’ve got this program running for 6 months and its consistently linked with our other programs which reflects the environment that we’re in and importantly $320billion has been put to work by the government, as well as with the RBA, to support liquidity in the financial system, to provide a cash flow boost to businesses, to provide cash payments to households, but this is all part of out 4 court press to support the economy in what is a very difficult time.
What happens if your boss just wants to do nothing?
Well we want employers that are eligible to apply. For them, they’ll get a $1500 fortnight wage subsidy that they can apply to their employees. It’s in their interest to maintain their employees on the books, because even if the health restrictions right now mean that they’ve had to close their doors and they’re not seeing the foot traffic through their stores, they know there’s going to be another side of this. The wage subsidy is government support at an incredibly difficult time.
If you’re not eligible for Job Keeper, then Job Seeker is the alternative. Both programs should be seen as complementary. But we would be calling upon all employers that were eligible because their turnover had fallen below the threshold to register their interest with the ATO to fill in the forms and to support their employees. But ultimately, to support themselves because there will be the other side to this pandemic
What is the best, easiest to read website out there if people want to know more (apart from www.switzer.com.au)?
ato.gov.au and treasury.gov.au are two websites with plenty of information. They can contact the ATO directly. They are focused on the implementation phase. This is a massive program that’s now passed through to parliament, it’s had bipartisan support, it will make a real difference to peoples lives and it will keep Australians in a job.
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