Before the JobKeeper and Stimulus review is announced, we thought it might be a good idea to recap on the latest information and headlines!
$2.5 BILLION JOB TRAINER PACKAGE: WHAT YOU NEED TO KNOW
An additional 340,700 training places will be created to provide no or low cost courses into sectors with job opportunities. The Government is working with the States and Territories to develop a list of qualifications and skill sets to be covered by the program.
JobTrainer for employers
The JobTrainer package has expanded the number of businesses that can access the 50% apprentice wage subsidy and extends the subsidy until 31 March 2021 (from 30 September 2020). Originally, only businesses with less than 20 employees or larger employers employing apprentices/trainees let go by a small business were able to access the subsidy (for wages paid to apprentices employed by them as at 1 March 2020). Now, businesses with under 200 employees can access the subsidy for apprentices employed from 1 July 2020.Employers will be reimbursed 50% of an eligible apprentice’s wage up to a maximum of $7,000 per quarter per apprentice. Employers will be able to access the subsidy after an assessment by the Australian Apprenticeship Support Network.
Eligibility
For small business:
- Employ fewer than 20 people, or
- A small business with fewer than 20 people, using a Group Training Organisation, and
- the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020 for claims after this date. Claims prior to 1 July 2020, will continue to be based on the 1 March 2020 eligibility date.
Claims are open now for small business.For medium sized businesses:
- Employ 199 people or fewer, or
- A medium sized business with 199 people or fewer, using a Group Training Organisation, and
- the apprentice or trainee was undertaking an Australian Apprenticeship with you on 1 July 2020.
Claims open 1 October 2020 for medium sized businesses. You will need to provide evidence of wages paid to the apprentice. If the business subsequently is unable to retain the apprentice, another business can access the incentive if they then employ and pay wages to the apprentice. Final claims for payment must be lodged by 30 June 2021.
How does the apprenticeship subsidy and JobKeeper work together?
They don’t. It is one or the other. An employer will not be eligible to claim the apprentice wage subsidy for any period wherethey choose to claim the JobKeeper payment for the same apprentice. An employer or Group Training Organisation will not be eligible for the JobKeeper payment where the employer is in receipt of an Australian Government wage subsidy for the same Australian Apprentice (for example Supporting Apprentices and Trainees and the Australian Apprentice WageSubsidy).
$3,000 GRANTS FOR SMALL BUSINESS
Eligible small businesses, not-for-profits, and other business types that have fewer than 20 Full Time Equivalent (FTE) staff (including non-employing businesses, such as sole traders) as at 1 March 2020 can apply for recovery grants of $500 to $3000. This grant helps small businesses get back to business by meeting the costs of safely reopening or upscaling operations, for example:
- making fit-out changes
- providing staff training and counselling
- covering advertising and communications expenses
- purchasing cleaning products or services.
This grant can only be used for purchases of eligible expenses made from 1 July 2020, where no other government support is available.Check eligibility and apply online at Service NSW before 11:59pm AEST on Sunday, 16 August 2020.
JOBKEEPER AND TERMINATION PAYMENTS
An employment termination payments (ETP) is a lump sum payment made to an employee when their job is terminated. ETP’s are generally made up of unused sick leave or unused rostered days off, payment in lieu of leave, genuine redundancy payments, etc. For some employers, JobKeeper will not be enough to keep the employee employed. If you do need to let staff go, the ATO has stated that from JobKeeper fortnights from 8 June onwards until the end of the scheme, ETPs cannot be included as part of the $1,500 an employer needs to pay to eligible employees to access JobKeeper payments. If any JobKeeper payments include an ETP to a terminated employee between 30 March to 7 June, the ATO has stated that it will not recover an overpayment.
MINIMUM WAGE INCREASES BY 1.75%
An increase to the minimum wage of 1.75% will start rolling out for the first full pay period from 1 July 2020.The increase applies to minimum rates in awards in 3 stages:
- Group 1 Awards – from 1 July 2020
- Frontline Heath Care & Social Assistance Workers
- Teachers and Child Care
- Other Essential Services
- Group 2 Awards – from 1 November 2020
- Construction
- Manufacturing
- A range of other industries
- Group 3 Awards – from 1 February 2021
- Accommodation and Food Services
- Arts and Recreation Services
- Aviation
- Retail
- Tourism
You can find the full list of impacted Awards on the Fair Work Ombudsman’s website. For anyone not covered by an award or an agreement, the new national minimum wage of $753.80 per week or $19.84 per hour, applies from the first full pay period starting on or after 1 July 2020. The minimum wage increase does not impact on workers receiving above the minimum wage. For employees at or close to the minimum wage, it is essential that employers are aware of the impact and timing of the increase to avoid falling foul of their industrial and superannuation obligations.
FUNDING FOR THE ARTS: WHAT’S AVAILABLE AND HOW YOU GET IT
Will the Prime Minister’s targeted $250 million package of funding to support cultural and creative projects and initiatives save the industry?
The arts funding is aimed at kick starting the sector with funding preferencing commercial initiatives that generate jobs and are expected to have a positive economic impact. That is, this is an economic package as opposed to creative or cultural funding.
| Area | Total funding | |
| Seed Investment to Reactivate Productions and Tours
Productions, festivals and events – including theatre, dance, community and arts and culture gatherings. Individuals are able to apply for funding. |
$75m | The competitive grant is administered through the Restart Investment to Sustain and Expand (RISE) Fund and provides seed funding to substitute for the capital lost as a result of cancellations and rescheduling of events.
Grants range from $75,000 to $2 million. Part of the funding has been earmarked for music recovery – recording and distribution, contemporary music touring, the development of safe venue infrastructure and protocols. |
| Show Starter Loans
Businesses able to generate jobs—including through the |
$90m | In a move to free up capital, the Government is providing a 100% guarantee for loans through financial institutions to assist arts and entertainment businesses to fund new productions and events.Lenders will provide facilities that only have to be drawn down if needed. Loan terms will be up to five years, with an initial 12-month repayment deferral. That is, the amount drawn down will need to be paid back, but in the event the loan can’t be repaid, the bank is protected.The loans are part of the Government’s existing Coronavirus Small and Medium Enterprises (SME) Guarantee Scheme. |
| Local Screen Production
Local film and television productions |
$50m | A Temporary Interruption Fund (TIF) for Screen Australia for local film and television producers to restart filming. See Screen Australia’sFunding and Support initiatives pageThe fund commences from 1 July 2020 for 12 months. |
| Sector-Significant Organisations
Support significant Commonwealth-funded arts and culture organisations |
$35m | Funding to support significant Commonwealth-funded arts and culture organisations facing threats to their viability due to COVID-19. |
Outside of the funding package, SupportAct received $10m in funding for COVID-19 crisis relief grants. Crisis funding is accessible to:
- musicians, crew and music workers who are unable to access Government benefits due to eligibility or other issues
- music workers who have been able to access Government benefits but are still facing financial hardship; and to
- those who are suffering financial hardship as a result of injury, ill-health or a mental health issue that is managed through a current Mental Health plan.
To be eligible, you will need to be a musician, crew or music worker, who:
- is an Australian citizen, permanent resident or have a valid working visa
- can prove they been working in the music industry for three years
- can provide names and details of two professional referees
- have household expenses greater than household income.
Other financial support is available through JobKeeper (including the self-employed) or JobSeeker.
For more details see The Office for the Arts COVID-19 update.
THE ATO ON COVID-19 FRAUD WARPATH
We always knew that a Government scheme swiftly distributing cash during a crisis was going to come with equally swift compliance and review measures, particularly when eligibility was self-assessed. Two major Australian Taxation Office (ATO) initiatives are searching out fraud and schemes designed to take advantage of the Government’s Coronavirus Economic Response Package.
Tip lines, tax returns and STP
The tip line, tax returns, and single touch payroll are just a few of the data sources the ATO is using to identify “inappropriate behaviour.”
Tips from employees about their employer’s efforts to manipulate revenue to meet the JobKeeper eligibility criteria is not hard to find.
The ATO has noted that it has received intelligence on a number of schemes circulating, one of which is the withdrawal of money from superannuation and re-contributing it to get a tax deduction.
ATO Deputy Commissioner Will Day said that, “Not only is this not in the spirit of the measure (which is designed to assist those experiencing hardship), severe penalties can be applied to tax avoidance schemes or those found to be breaking the law. If someone recommends something like this that seems too good to be true, well, it probably is.”
The ATO has made its targets clear. For JobKeeper, these include ensuring that:
- Entities meet the eligibility requirements in relation to business income
- Entities are claiming for eligible employees
- Eligible business participants are correctly making claims
- Entities are not manipulating their turnover in order to satisfy the decline in turnover test
- Applying when there is no change to your regular salary, wage, or employment information
- Artificially arranging your affairs to meet the eligibility criteria
- Making false statements or fraudulent attempts to meet the eligibility criteria
- Withdrawing and re-contributing super for a tax advantage – this could not only trigger anti-avoidance rules but also result in additional taxes and impact your eligibility for a super co-contribution.
Where individuals have not met the early access measure’s hardship eligibility criteria, the ATO has stated that fines of up to $12,000 will apply for each false and misleading statement made. In addition, where a scheme has been entered into to obtain a tax benefit, such as claiming a tax deduction for recontributing super withdrawn under the early release measures, Part IVA may apply. That is, the ATO is actively looking for individuals who have utilised the early release measures when they didn’t need it, then recontributing all or part of the super for the purpose of claiming a tax deduction.For the Cash Flow Boost, the ATO is looking for schemes designed to:
- Artificially restructure businesses to gain access to the cash flow boost
- Artificially changing the character of payments to salary or wages to maximise the cash flow boost
- Inflating reported withholding amounts to maximise the cash flow boost
- Resurrecting dormant entities or phoenixing
- Making false statements or fraudulent attempts to create an entitlement.
3 Million Individuals in Data Matching ProgramIn a massive data matching program, the ATO and Services Australia will share the records of approximately 3 million individuals to ensure that those accessing benefits are eligible to receive them.
For those who access their superannuation early under the COVID-19 measures, Services Australia will verify their eligibility where they have indicated that they are eligible for the JobSeeker payment, parenting payment, special benefit, youth allowance or the farm household allowance.
The program will review the records of those applying for early access between 19 April 2020 to 24 September 2020.
The records of 45,000 prisoners in state and territory correctional facilities are also being compared against applications for JobKeeper, temporary early access to superannuation, and the eligibility criteria for cash flow boost to confirm appropriate access. The records gathered will cover the period from 1 March 2020 to 27 September 2020.
INCREASED FLEXIBILITY FOR PARENTAL LEAVE PAY FOR SELF-EMPLOYED
From 1 July 2020, parents accessing the Government’s parental leave pay (PPL) scheme will have greater flexibility and options.
Targeting the self-employed and small business owners, the changes introduce a new flexible paid parental leave pay period of 30 days.
Previously, new parents could apply for PPL for a continuous block of up to 18 weeks. The changes split this time period into two:
- A continuous period of up to 12 weeks, and
- 30 flexible days.
Parents can take the 18 weeks in one block or, under the new rules, take the 12 week period and then use the additional 30 days at a period and in a way that suits them but before the child turns 2 years of age. For example, assume that when Jane, who works five days per week, has a child, she initially claims 12 weeks. Jane returns to work part time for three days per week. In that case, Jane would apply to be paid parental leave pay on the two days per week that she is not working.
The administration of the PPL will change in some scenarios. For Jane’s case above, the employer would administer the scheme for the first 12 weeks but then the Government would directly pay Jane for her flexible days.
If an employee wishes to access flexible parental leave pay, they will need to negotiate time off work or a part time return to work with their employer. If the employer is unable to accommodate the request, then the employee may take the 18 weeks as one block.
The changes to the paid parental leave scheme apply to babies born on or after 1 July 2020. The scheme commences from 1 April 2020 to give parents applying for leave the flexibility to use the new arrangements (but only if their child is born on or after 1 July 2020).
THE ANNOUNCEMENT
Once we have received the latest Jobkeeper and Stimulus review information, we will be sure to get this to you as soon as possible.
In the meantime, if you have any queries regarding the above information, please do not hesitate to contact our office.
