Self Employed Business Owner’s Guide to Claiming Jobkeeper Payments

The federal government’s $130 billion jobkeeper wage subsidy is designed to hedge the impact of the Covid19 pandemic. The scheme is an incentive for businesses to retain employees so they can bounce back quickly once the pandemic is over.

So what’s on the table for businesses?

Eligible businesses get a wage subsidy of $1,500 per employee per fortnight. This is $19,500 per employee over the life of the scheme.

Even self employed business owners like sole traders, independent contractors and company directors who are not on payroll can be eligible for the jobkeeper scheme. However, only one self employed person per business can be nominated for the benefit.

Who is eligible to nominate for Jobkeepers scheme?

To be eligible for the jobkeeper scheme, the business must satisfy the below conditions:

• The business must hold an ABN on 12 March 2020, or at a later time allowed by ATO.
• The business entity needs to satisfy either the base test for a reduction in turnover compared to the corresponding period in 2019 or one of the alternative reduction in turnover tests.
• Must have an employee(s) over 16 years as of March 1, 2020, who are Australian Citizens or Permanent Residents or holders of a subclass 444 visa for NZ citizens.

Eligibility for Company Directors and Sole Traders for Jobkeepers

Self employed persons like independent contractors, sole traders, company directors who are not on a payroll, partners in partnerships, beneficiaries in trusts, and shareholders of companies can also be eligible for jobkeeper scheme.

To be eligible for the Jobseeker allowance, the following conditions must be met:

• The business must hold an ABN on 12 March 2020, or at a later time allowed by ATO.
• The business entity needs to satisfy either the base test for a reduction in turnover compared to the corresponding period in 2019 or one of the alternative reduction in turnover tests.
• The businesses should have lodged the Income Tax Return for 2019(or BAS)  before March 12, 2020. ATO has the discretion to extend this time in appropriate cases.
• The self individual must not be into employment during the given period under any entity and must actively involve in the eligible business.
• Should be at least 16 years old as on 1 March 2020, a resident of Australia; and not on partners or father’s compensation or parental leave pay.

Only one owner per entity can qualify:

Where an eligible business has more than one partner or director who is eligible for jobkeeper, only one partner or director can be nominated for the jobkeeper scheme.

Therefore, if you are in a partnership or have other directors or trust beneficiaries, you need to decide which person should receive the payments.

Integrity Provisions and Anti-Avoidance Rules

The jobkeeper scheme comes with great due diligence onus on the applicants and with heavy penalties for any attempt to game the system.  There are strict compliance, monthly reporting, and anti-avoidance provisions in operation for the Jobkeeper payments.

It is highly advisable to consult with your accountant to determine your eligibility and compliance requirements.

Contact Tax Return Perth today for a free online appointment, and for any help or queries