Small Business Stewardship Group special briefing 18 August 2020

COVID-19

JobKeeper – up to 27 September 2020

ATO insights on current program

As at 6 August 2020, the ATO has issued over $35 billion in payments, covering more than 960,000 businesses and not-for-profits, and more than 3.5 million individuals. 97.6% of payments are made to applicants within four days of receipt of the declaration.

We are tracking new enrolments to JobKeeper. As of a week ago, we were seeing a slight spike in Victorian applications relative to other states with Victoria representing about 42% of total applications.

Some unsuccessful applicants have lodged objections with the ATO or made claims at the Administrative Appeals Tribunal. These matters are managed under the normal processes of review and will be processed as expeditiously as possible.

Currently, less than 2.5% of claims are requiring review with 50% resolved within 12 days. We are working to resolve cases as quickly as possible.

We are seeing tip-offs shifting away from ‘one-in, all-in’ and nature of employment relationships issues. We are receiving more cash economy type tip-offs, including wage conditions and attempts to pay employees in ways other than cash. The ATO is working closely with the Fair Work Ombudsman on these tip-offs.

Changes to current program –Rule 7

The ATO updated the group on the recent changes to the current JobKeeper program, including the new rules published on Friday 14 August regarding the eligibility of additional employees. These include:

• employees’ eligibility for JobKeeper can now be assessed using 1 July 2020 reference date
• employees can now be nominated by alternative employers if their employment has changed since the JobKeeper program began. However, they can still only be nominated by one employer at any given time.
• for the fortnights commencing on 3 August and 17 August 2020, employers have until 31 August 2020 to meet the wage condition for new eligible employees under the new 1 July eligibility test.

We have updated our website accordingly with:

• examples where casuals are stood down or cannot work
• the ATO position on the wage condition. We have exercised the Commissioner’s discretion so that the wage condition for money to be paid in advance does not need to be met as long as it is paid by 31 August 2020.
• clarification about the dates for providing employee nomination notices. The rules state that employee notification notices should be provided within 7 days. The ATO has taken a flexible position on this rule and published advice stating these notices should be provided as soon as possible.

Member insights

These changes to JobKeeper may re-raise an earlier question about whether an employer can ‘pick and choose’ between their employees. The ATO confirmed that JobKeeper is still one in, all in.

Some examples or case studies about which employees might be able to be included under JobKeeper Rule 7 in different periods would be useful.

The ATO is considering several different scenarios around employee eligibility under JobKeeper Rule 7. For example, where casual employees did not meet the requirement for 12 months employment before March 2020 but did as at 1 July 2020. There are several different factors to take into consideration as there is not a standard definition for a casual employee. The impact of restrictions in different states and territories has impacted the ability for many casual employees to work between March 2020 and July 2020. Other case studies could include employers who closed down, reopened and employed new staff, but have now closed again and now want to apply for JobKeeper.

While the reference date for employment has changed to 1 July 2020, there is still some confusion about the wage reimbursement taking effect from 3 August 2020. The ATO will review the materials available and develop further communications to better explain the key dates.

JobKeeper extension – commences 28 September 2020

The ATO is now consulting on the announced JobKeeper changes that will commence 28 September 2020. We are designing and shaping processes to ensure key functionality is ready for the implementation date. Members were asked about their impressions of the revised scheme.

Member insights

There is concern in the community around the announced changes to JobKeeper not being legislated yet.

Broad scenarios should be considered, for example cross-border implications, Victorian Stage 4 lockdown conditions or where businesses have not recovered as well as they thought they might.

Infographics in examples are extremely useful. The infographic that was shared recently was well received.

When JobKeeper reduces to $1200 a fortnight after 28 September 2020, messages need to be given that employees cannot work more hours than they are paid for. There is anecdotal evidence that this might not be the case for some employees who feel their employment is uncertain.

Early release of superannuation

The Government is extending the application period for this measure from 24 September 2020 to 31 December 2020, however this has not been legislated yet. As the end of the application period will be during the ATO’s Christmas closedown period, we are exploring options to ensure that individuals are able to apply for the program right up until 31 December 2020.

There is currently an increased focus on compliance of the Early release of superannuation measure. Compliance is focussed on the highest-risk individuals in the population where there appear to be eligibility issues. The ATO encourages applicants to come forward if they want to correct an error or they are unsure if they have made an error. Penalties will not be applied in cases where the individual comes forward.

Member insights

A media outlet has reported that the Superannuation guarantee amnesty had been extended until 31 December 2020. It was suggested they may have been confused with the Early release of superannuation extension. The ATO confirmed the Superannuation guarantee amnesty has not been extended. It ends on 7 September 2020.

Cash flow boost

The second cash flow boost is currently being paid and is tracking as per forecasts. We are seeing a decline in complaints, particularly about eligibility. The main eligibility issue relates to new to business clients.

Member insights

Members were interested in the ATO’s complaint handling times, volumes and escalations. The ATO agreed to follow up and share what we can. COVID-19 related complaints are receiving priority processing.

Communication from the ATO in response to cases that have been escalated for review needs to be improved. Members reported ongoing issues relating to information requests and timeliness of our follow-up actions. The ATO confirmed we are continuing to refine our approaches and staff capability.

Instant asset write-off

While recognising this as a matter for government, a member suggested a further extension of the instant asset write-off expansion beyond 31 December 2020 may be required as supply chain issues are continuing.

Implication of Victorian Stage 4 restrictions

The Victorian Small Business Commissioner led a discussion on the impacts of Stage 4 restrictions. Key matters raised related to severe cash-flow issues, increased rent disputes, the critical importance of JobKeeper and how we can all support unviable businesses to close with dignity.