The Australian Taxation Office (ATO) has extended the time available for businesses to pay their employees, and still be able to claim back the first JobKeeper payments.
Businesses suffering from a significant reduction in turnover due to COVID-19 will now have until 8 May 2020 to ensure all eligible employees have received a minimum of $3000 in gross wages for the first two fortnights of the JobKeeper support period.
Assistant Treasurer Michael Sukkar said the extension allows businesses further time to consider their circumstances and remove any cashflow pressures arising from financing arrangements that have not been finalised.
“Importantly, this extension does not negate the obligation on businesses to ensure they continue to pay eligible employees $1,500 in each JobKeeper fortnight.
“Businesses have until 31 May 2020 to formally enrol to claim JobKeeper payments. However, the sooner an employer pays their staff for April and enrols, the sooner the ATO can reimburse them the JobKeeper payments.”
Around 900,000 businesses have expressed interest in the JobKeeper scheme prior to enrolment. Enrolments opened at the start of last week and so far more than 500,000 businesses have enrolled covering more than 3 million employees.
JOBKEEPER PAYMENT EXTENSION – To help businesses with their cashflow, the @ato_gov_au is extending the time available for businesses to pay their employees, and still be able to claim back the first JobKeeper payments until 8 May 2020. For more info: https://t.co/WCQTreGLTC pic.twitter.com/zvZC223kIV
— Michael Sukkar (@MichaelSukkarMP) April 27, 2020
The Australian Small Business and Family Enterprise Ombudsman Kate Carnell said the extension will come as a welcome relief for small businesses struggling with cash flow.
“Small businesses now have extra time to deal with cash flow pressures as a result of any delays with their financial arrangements.
“It’s especially critical now that those small businesses that had chosen not to apply for JobKeeper because they were worried they couldn’t pay their staff by April 30, do so now.
“The big four banks have established JobKeeper help lines that are dedicated to ensuring small businesses have the funding they need to pay their staff. They are promising to fast-track these applications.
“There are also some fintechs that have released products to help small businesses with cash flow.
“For those small businesses struggling to pay their rent, remember you are only covered by the Mandatory Commercial Tenancy Code of Conduct if you are eligible for JobKeeper, so this could be essential to your business’ survival.”
Businesses have until 31 May 2020 to formally enrol to claim JobKeeper payments. However, the sooner an employer pays their staff for April and enrols, the sooner the ATO can reimburse them the JobKeeper payments.
The government’s $130 billion JobKeeper wage subsidy package is a scheme to support businesses significantly affected by the coronavirus. The package is understood to be the largest economic bailout in Australian history.
The $1500 per fortnight JobKeeper payment is the equivalent of about 70 per cent of the median wage and represents about 100 per cent of the median wage in some of the most heavily affected sectors, such as retail, hospitality and tourism.
It is available to full-time and part-time workers, sole traders and casuals who have been with their employer for 12 months or more. Payments will be made to employers for up to six months.
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