Client Update on Government Incentives

9 April 2020
      

JobKeeper

The legislation for the JobKeeper Payment was passed by the Federal Parliament yesterday without amendment.  

Please find below the latest fact sheets from the Federal Government:

National Cabinet Mandatory Code Of Conduct and SME Commercial Leasing Principles

JobKeeper Fact Sheet Info For Employers

Some of the details for the JobKeeper Payment include:

  • Employers and Sole Traders with a 30% or greater fall in turnover will be eligible for a payment of $1,500 per employee per fortnight commencing on 30 March 2020.
  • At this stage, the Payment will run for six months.
  • You will be eligible if your turnover has fallen or is expected to fall by 30% compared to the same BAS period in the preceding year.
  • Businesses and Sole Traders that fall outside these parameters due to other factors can apply to the ATO to have their circumstances considered.
  • The Payment must be passed onto your employee and if you normally pay your employee more than $1,500 net per fortnight, you will be expected to top up to their normal pay.
  • Employers do not have to pay Superannuation on the JobKeeper Payment amount, but do have to pay it on any top up.
  • Employers can change their staff hours to bring their employee pays down to $1500 net per fortnight, but only if there is less work that normal for them due to current economic circumstances.
  • The ATO will use Single Touch Payroll data to assess the payments, which will start to flow to employers in the first week of May.
  • Employers must inform their staff of their eligibility for the JobKeeper Payment.

We encourage all businesses who think they might be eligible for the JobKeeper Payment to register their interest with ATO using the following link: 

https://www.ato.gov.au/general/gen/JobKeeper-payment


Code of Conduct for Commercial Landlords & Tenants

On Tuesday 7 April, the National Cabinet release a mandatory Code of Conduct to govern the relief of rental payments between Commercial Landlords and Tenants.  Attached is the Code of Conduct and the main points are:

  • The Code applies to Tenants with turnover up to $50m that are eligible for the JobKeeper Payment (i.e. 30% fall in year-to-year turnover).
  • Landlords cannot terminate the lease of a Tenant for non-payment and must offer Tenants rental relief proportionate to the fall in turnover the tenant is experiencing.
  • At least half of this relief must be through a rental waiver; the remainder can be done as a rent deferral.
  • We believe any rent relief excludes outgoing which can continue to be charged, but any relief the Landlord receives i.e. reduction in rates, land tax, etc. must be passed on to the Tenant.
  • Landlords cannot draw on Bonds or personal guarantees to pay the rent and there cannot be any rent increases during the COVID-19 pandemic period.

These regulations can also be used where you or a related party owns the property where your business is operated.  We will provide further details in this regard next week.


State Government Incentives - NSW

For those of you in NSW, the State Government has the following incentives available due to the COVID-19 challenge:

  • $10,000 grants for businesses below the payroll tax threshold ($900,000 of wages per annum) and highly affected by the Public Health Order restricting activities due to COVID-19.  This grant can be used for unavoidable business costs such as utilities, overheads, legal fees and professional advice.

For further information, please go to the following link: https://preview.nsw.gov.au/news/10000-grants-to-provide-fast-relief-for-nsw-small-businesses-battling-covid-19

  • Payroll Tax to be waived for the months of March, April and May for businesses with payrolls below $10m.  

For further information, please go to the following link: https://preview.nsw.gov.au/news/nsw-businesses-to-benefit-from-today-as-payroll-tax-measures-take-effect                        

In this Issue:

JobKeeper

Code of Conduct for Commercial Landlords & Tenants

State Government Incentives - NSW