Q & As of the month

Find out what your peers are asking – based on real-life questions submitted to TechConnect.

The Government guarantee on deposits – are all my accounts covered?

By Julie Steed, Senior Technical Services Manager

Q: Does the $250,000 government guarantee on deposits at authorised deposit-taking institutions (ADIs) count per entity (individual, SMSF, joint, family trust) or per family group of related entities?

A: The financial claims scheme (FSC) applies to each account holder with each ADI. If a client has a personal account, a family trust account and an SMSF account with ABC bank, each deposit is potentially protected up to $250,000.

The following link provides more information about the scheme: About the Financial Claims Scheme

Coronavirus: When is the business owner eligible for the JobKeeper Payment?

By Janet Manzanero-Caruana, Senior Technical Services Manager

Q: My client is a business owner with five permanent employees and wants to know whether he can be an eligible employee for JobKeeper Payment purposes?

A: The JobKeeper Payment is a Government wage subsidy paid to eligible employers for the period commencing from 30 March 2020 until 27 September 2020. JobKeeper Payment subsidises the wages of eligible employees who were employed as at 1 March 2020 and continue to be employed, including those who have been stood down or re-hired. The JobKeeper Payment is $1,500 per fortnight for each eligible employee.

Some self-employed individuals may be eligible as an employee for the JobKeeper Payment.

Conditions that the business must meet

The business is eligible to apply for the JobKeeper Payment if it:

  • has an aggregated turnover of less than $1 billion (for income tax purposes) and the estimated goods and services tax (GST) turnover has fallen, or is likely to fall, by 30% or more, or
  • has an aggregated turnover of $1 billion or more (for income tax purposes) and the estimated GST turnover has fallen, or is likely to fall, by 50% or more, or
  • is a charity (except universities and non-government schools) registered with the Australian Charities and Not-for-profits Commission (ACNC), the estimated GST turnover has fallen, or is likely to fall, by 15% or more relative to a comparable period.

A business that meets the turnover requirement later than 30 March 2020 but before 27 September 2020 may be eligible for JobKeeper Payment for the remaining time-limited period.

Businesses subject to the Major Bank Levy, companies that are in liquidation or partnerships, trusts or sole traders in bankruptcy are not eligible for the subsidy. Governments, their agencies and wholly-owned corporations of either of these are also not eligible.

The JobKeeper Payment will not be paid for an eligible employee while they receive Parental Leave Pay or Dad and Partner Pay or for an employee who is not working due to incapacity and is receiving workers compensation payments.

When is a business owner an ‘eligible employee’ for the JobKeeper Payment?

Businesses can register their interest for JobKeeper Payment online with the Australian Taxation Office who will administer the scheme.

A self-employed person must provide their Australian Business Number (ABN), the tax file number of each eligible recipient of the subsidy, and a declaration of business activity. Eligible employees must agree to be nominated and complete the JobKeeper employee nomination notice, which must be kept by the employer.

If a person is sole trader, the person is eligible for JobKeeper Payment if at the time of registration:

  • the business meets the GST turnover requirement above
  • the person had an ABN on or before 12 March 2020, and either:
    • had assessable income from the business for the 2018/19 year and it was reported in the income tax return lodged on or before 12 March 2020 (or later if allowed by the Commissioner), or
    • the business made a supply during the period 1 July 2018 to 12 March 2020 and the information was reported to the Commissioner on or before 12 March 2020 (or later if allowed by the Commissioner);
  • was actively engaged in the business
  • was not entitled to another JobKeeper Payment (as a nominated business participant of another business or as an eligible employee)
  • was not a permanent employee of any other employer
  • was aged at least 16 years of age as at 1 March 2020, and
  • was an Australian citizen, a permanent visa holder, or a Special Category (Subclass 444) Visa Holder as at 1 March 2020.

If the business is a partnership, only one partner, in addition to other eligible employees may be nominated for the JobKeeper Payment.

A trust may receive the JobKeeper Payment for eligible employees. Where trust beneficiaries only receive trust distributions rather than wages or salary for work done, only one adult beneficiary of the trust may be nominated for the JobKeeper Payment.

Where the business is a company, only one director actively engaged in the business, in addition to any eligible employees, may be nominated for the JobKeeper Payment. The nominated director must not receive JobKeeper Payment as an employee. As an alternative to nominating one director who is not an employee, one shareholder who is actively engaged in the business may be nominated for the JobKeeper Payment.

The Australian Taxation Office provide more information about the eligibility of business owners for the JobKeeper Payment.

More information

If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.

The information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.