By Ian Murray-Jones, Senior Tax Writer, Thomson Reuters
Legislation to implement the Government’s “JobKeeper Payment” scheme was passed by both houses of parliament late on 8 April 2020. The package of four Bills seeks to provide the framework to implement the plan announced by the Prime Minister on 30 March 2020.
The JobKeeper Payments component is contained in Sch 2 of the Coronavirus Economic Response Package Omnibus (Measures No 2) Bill 2020. However, there are also a number of other important non-tax related measures.
The legislation mostly contains the legislative framework to allow for the operation of the Treasury’s Rules, which will contain the details of the JobKeeper Payments (ie there are no specific details in the legislation itself). The Rules will be issued by the Treasurer for administration by the ATO Commissioner.
As the Bills mostly contain the legislative framework to allow for the operation of the Rules, they contain matters such as: the meaning of “approved form”; “Coronavirus economic response payment” (which includes the JobKeeper Payments); types of Rules that the Treasurer can prescribe (eg which employers are eligible, eligible employees, amount and timing of payments etc – rather than details of the actual rules themselves); and overpayments (ie the requirement to repay any overpayments, and joint and several liability rules relating to this).
The Bill introduces special record-keeping rules in relation to COVID-19 response payments. There will be two categories of rules, ie “pre-payment record keeping requirements” and “post-payment record keeping requirements”. Overall the requirements are what one would expect, ie kept in English, for 5 years, readily accessible. The important bit is that if the employer does not keep the correct records, then the employer will be taken to be ineligible to receive a Coronavirus economic response payment. This presumably means that the employer would be liable to repay it (even if it had been paid to an employee).
There is no real clarity as to whether the COVID-19 payments will be non-assessable non-exempt income (ie NANE). There are amendments stating that amounts paid in accordance with rules made under the Coronavirus Economic Response Package (Payments and Benefits) Act 2020 are either exempt or NANE income, depending on what the Rules say: items 5 and 6 in Pt 1 of Sch 2.
Fair Work Act amendments
A new Part 6-4C will be inserted into the Fair Work Act 2009, which temporarily enables employers to issue “JobKeeper enabling directions”. These can provide (subject to various safeguards) for increased flexibility around employees’ hours of work via a new JobKeeper enabling stand down direction, performance of duties and location of work. It also enables employers and employees to make agreements for increased flexibility around annual leave arrangements and days and times of work. The Fair Work Commission will be able to resolve disputes, including by arbitration.
The JobKeeper payment rules will require the sum of amounts paid by an employer who is entitled to a JobKeeper payment for an individual for a fortnight to equal or exceed $1,500 in the fortnight – this is the “wage condition”.
The sum of amounts paid by an employer includes amounts otherwise handled in ways permitted by those rules, such as by making salary sacrifice superannuation contributions for employees or withholding tax amounts.
Child care sector amendments
The Family Assistance Administration Act will be amended to: modify the calculation method used for Child Care Subsidy reconciliation to ensure a consistent outcome for individuals who have changed their relationship status during the financial year; and meet various circumstances of social and financial hardship being experienced by the child care sector and families, arising from emergency and disaster events including the Coronavirus by ensuring that payments of Additional Child Care Subsidy and certain grants can draw upon standing appropriations.
The amendments also require that the Minister make rules which prescribe the total amount that can be paid in a financial year.
Additional support for veterans
The Veterans’ Minister will be able to: increase, by legislative instrument, the amount paid to persons receiving a payment under a provision of the Veterans’ Law by the amount of the COVID-19 supplement; and vary the qualifications and eligibility for payments under the Veterans’ Law by legislative instrument.
These instruments may only be made after consultation with the Social Services Minister. Both the powers and any instruments made using them will end on 31 December 2020. This measure was not previously announced.
The tax secrecy provisions in the TAA will be amended to allow de-identified protected information to be disclosed to the Treasury for the purposes of policy development, or analysis, in relation to the Coronavirus, including in relation to programs introduced in response to the economic impacts of the Coronavirus. These amendments will be repealed on 1 July 2023 and had not been previously announced.
Date of effect
The amendments will generally commence on the day after Royal Assent to the Bill. The Payments and Benefits Bill provides for Rules to be made allowing the Commissioner to make payments on or after the day of commencement, for the period between 1 March 2020 and 31 December 2020 (inclusive). The package of four Bills seeks to provide the framework to implement the plan announced by the Prime Minister on 30 March 2020.