More businesses eligible for recovery loans up to $5m
The government has dropped criteria for its SME Recovery Loan Scheme, meaning more businesses with a turnover up to $250 million can have access.
The Scheme is designed to support economic recovery and to provide continued assistance to small and medium enterprises (SMEs) dealing with the economic impacts of the coronavirus crisis.
The Government has announced that, in recognition of the continued economic impacts of COVID-19, the current requirements for SMEs to have received JobKeeper during the March quarter of 2021 or to have been a flood-affected business in order to be eligible under the SME Recovery Loan Scheme will be removed.
The Scheme enhances lenders’ ability to provide cheaper credit, allowing many otherwise viable SMEs to access vital additional funding to sustain them the impact of COVID-19, recover and invest for the future. The Government will work with lenders to ensure that eligible businesses can access finance to maintain operations and grow.
Loans are available from 1 April 2021 until 31 December 2021.
The Scheme rules will be amended to reflect the updated eligibility and loans will be available through participating lenders once the changes become effective.
Please visit the Australian Government’s Treasury website for more information for SMEs and lenders.
With the JobKeeper subsidy now finished, you may be looking at casual employment as a practical solution to help deal with the ebbs and flows of your business.
However, all businesses that currently employ casual staff, or that are looking at engaging casual staff, need to be aware of some important changes introduced under the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021 (Bill).
Key Changes under the new legislation
1. Under statutory changes there is a new definition of casual employee.
A person will now be defined as a casual employee if they accept an offer with no firm advance commitment of regular work.
The following considerations will determine this issue:
whether the employee can elect to accept or reject work;
whether the employee will work as required according to the needs of the employer;
whether the employment is described as casual employment; and
whether the employee will receive a casual loading.
2. There is an obligation on employers with 15 or more employees to offer casual employees conversion to permanency after 12 months of employment where there has been a regular pattern of hours on an ongoing basis, during at least the last 6 months of that period.
Employers are not obliged to make an offer if there are “reasonable business grounds” not to, but they must notify the employee in writing of their decision not to make the offer. Where an employee refuses an offer to convert, they no longer hold a right to request conversion at a later date.
3. A new Casual Employment Information Statement is to be provided to each casual employee when they start employment with their employer, in addition to the Fair Work Information Statement that employers already need to provide employees.
4. There is a new statutory offset rule that stops ‘double dipping’ by casual employees who are found to be permanent employees.
If an employee has been misclassified as a casual and has entitlements owing to them as result of the misclassification (such as annual leave), the Court can now offset the casual loading already paid to the employee against any entitlements owing.
Importantly, the offset provision can also apply to historical claims.
Next steps for employers
For employers who engage casuals we recommend you:
review your casual employment agreements, to ensure that the wording of the agreement and terms of the engagement means that their casual status will be recognised.
review systems for engagement of casual employees to ensure that the new legal requirements are met – such as providing all casual employees with the new Casual Employment Information Statement.
review whether your existing casual employees are entitled to convert to permanent employees and ensure your processes comply with the new casual conversion obligations.
Allan Hall Human Resources are workplace experts who are well-placed to help employers navigate all of the above.
If you have any questions or require support, please do not hesitate to contact us directly at [email protected].
The government has announced an extension and expansion of its SME Recovery Loan Scheme.
Enhancing lenders’ ability to provide cheaper credit, the scheme is allowing many otherwise vulnerable SMEs to access vital additional funding to get through the impact of Coronavirus, recover and invest for the future.
The expansion of the scheme will see the limit of eligible loans rise from $1 million to $5 million, as well as a cost split shift with the government guaranteeing a higher portion of the loan. The shift would see the government’s 50-50 split with banks shift to an 80-20 split.
Businesses with a higher turnover are expected to also benefit, as the cap on eligible turnover increases from $50 million to $250 million.
Borrowers will be offered a repayment holiday on both principal and interest for up to 24 months, with loan terms increased from five years to 10 years.
The expanded scheme builds on the framework established in the two phases of the Coronavirus SME Guarantee Scheme, and specifically targets SMEs currently receiving JobKeeper. The scheme is only open to recipients of the JobKeeper payment between 4 January 2021 and 28 March 2021.
Loans will be made available from 1 April 2021 until 31 December 2021.
Both self‑employed individuals and non-profit businesses are eligible. Businesses that have accessed loans in Phase 1 and Phase 2 can also apply for loans under the scheme.
Got questions about further eligibility requirements or how to apply for a loan? Get in touch with our Tax & Accounting team who will be able to assist you on 02 9981 2300.
ATO JobKeeper extension deadlines ahead of Christmas / New Year
JobKeeper deadlines for the second extension period have now been extended by the ATO ahead of the festive season.
JobKeeper brings a lot of changes and requirements and we have been assisting many businesses with their JobKeeper eligibility and enrolment enquiries and application processes.
Key updates
Completion of the December business monthly declaration, for employers to be reimbursed for payments between 23 November 2020 to 3 January 2021, has also been extended from the usual 14th of each month to 28 January 2021.
To account for the New Year weekend, the Tax Office will also allow employers to meet the wage condition for payments between 21 December and 3 January 2021 by 4 January 2021.
From 4 January, the second extension period for JobKeeper will commence, reducing payment rates to $1,000 per fortnight for those on the Tier 1 rate, and $650 per fortnight for those on Tier 2.
Entities will be required to demonstrate that their actual GST turnover has declined by the requisite shortfall for the December 2020 quarter, with the ATO to make the new decline in turnover form available on its systems from 4 January.
New employers enrolling for the first time, and existing employers, will be required to submit the decline in turnover form by 31 January.
Employers will also be given until 31 January 2021 to meet the wage condition for fortnights starting on 4 January and 18 January 2021.
JobKeeper extension periods
The extension of the scheme operate in two separate periods:
Extension 1: 28 September 2020 to 3 January 2021
Extension 2: 4 January 2021 to 28 March 2021
Payment rates are split into two separate tiers based on eligibility.
Tier 1 rate applies to:
eligible employees who worked 80 hours or more in the four weeks of pay periods before either 1 March 2020 or 1 July 2020
eligible business participants who were actively engaged in the business for 80 hours or more in February and provide a declaration to that effect
Tier 2 rate applies to any other eligible employees and eligible business participants.
The fortnightly payment rates (before tax) that apply to eligible employees within each tier will change for each extension period as follows:
September Quarter (Jul, Aug, Sept) relative to comparable period (usually same 2019 Q)
Extension 2 (3/1/21 – 28/3/21)
December Quarter (Oct, Nov, Dec) relative to comparable period (usually same 2019 Q)
In addition, you will also need to satisfy the original decline in turnover test UNLESS you:
were entitled to receive JobKeeper payments for fortnights prior to 28 September 2020 and have already satisfied the original test
are enrolling in the scheme for the first time from 28 September 2020 onwards and have satisfied the new actual decline in turnover test (as by default, you would pass the original decline in turnover test)
How does this differ from the original JobKeeper test?
The decline in turnover must be demonstrated for specific quarters only
Rather than using projected GST turnover for the relevant quarter being tested, you use your current GST turnover
You must allocate sales to the relevant quarter in the same way you would report these sales to a BAS if you were registered for GST
If you are not registered for GST, you will work out your turnover using either the GST cash or non-cash basis of accounting
Alternative tests for determining actual decline in turnover may be available in some circumstances. These will apply in a similar way to the alternative tests for the original decline in turnover test. However, they must be applied on a quarterly period. We will provide more information on Alternative tests when it is available from the ATO.
Action Items – What you NEED to do
From 4 January 2021, you are required to:
Determine your eligibility for the JobKeeper Extension scheme using the actual turnover test for the December 2020 quarter
Determine if you have any new eligible employees that were not previously nominated for JobKeeper and ask them to agree to be nominated
Work out the Tier 1 or Tier 2 rate of pay that you will be claiming for each eligible employee/eligible business participant
Notify your eligible employees which payment rate is applicable for them
Ensure your eligible employees/eligible business participants receive the correct rate of payment per fortnight during each of the JobKeeper Extension periods according to the two tiers of payment
If you are registered for GST and have outstanding Business Activity Statements (BAS), ensure you lodge your BAS for the September 2019 and December 2019 quarters now (or for equivalent months, if you report monthly) so that you don’t hold up your application for the JobKeeper Extension Scheme
What you do NOT need to do
If you are already enrolled for the current JobKeeper Scheme for fortnights prior to 3 January 2021, you do NOT need to:
Re-enrol for the JobKeeper Extension Scheme but you do need to complete the new decline in turnover form (available from 4 January 2021)
Re-assess eligibility for employees already receiving JobKeeper for the JobKeeper Extension Scheme or ask them to agree to be nominated
Meet any further requirements if you are claiming for an eligible business participant, other than holding an ABN and declaring assessable income and supplies
Need JobKeeper help?
JobKeeper brings a lot of changes and requirements and we have been assisting many businesses with their JobKeeper eligibility and enrolment enquiries and application processes. Our team at Allan Hall Business Advisors can assist you to navigate this process smoothly and efficiently. Please contact us should you require assistance or have any further questions.
The ATO also offers a factsheet outlining the key changes of the JobKeeper Extension Scheme.
