Along with help for people who have lost their jobs, the government is also paying cash to the self-employed whose incomes have dropped because of the coronavirus crisis.
Sole traders and other self-employed people are also entitled to the $1500 a fortnight payment if they have suffered a 30% decline in their income.
The payment is also available to trusts, partnerships and companies operated by directors.
Payments start from the fortnight beginning 30 March (with the first payment to be made in early May) and run until September 27.
Who can receive it?
The JobKeeper payment is open to businesses whose turnovers have dropped by 30% or more.
There are three different ways you can calculate the fall for the ATO, which is running the scheme:
- GST turnover for March 2020 with GST turnover for March 2019
- Projected GST turnover for April 2020 with GST turnover for April 2019
- Projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019
Gavin Debono, Executive Director of Private Business and Family Advisory at Pitcher Partners Accountants, says it’s important business owners have their Business Activity Statement lodgements up to date so they show a decline.
Debono noted that business owners need to ensure their BAS is filled out correctly, as different types of income recorded in the wrong category can make the current income look higher, potentially meaning the 30% decline may not show up. If you need help or advice on how to lodge, visit the Australian Taxation Office’s BAS Page or speak to a registered tax or BAS agent who can lodge, vary and pay on your behalf.
If for some reason you don’t have such a big decline in income (such as your business wasn’t operating last year or had a bad 2019 because of drought) but are still affected by the coronavirus, the ATO will consider your situation on a case-by-case basis.
Only one owner per business and tax payable
Importantly, only one owner from each business entity is entitled to the payment. For example, with a company operated by two directors, only one would be entitled to the payment.
However, Debono notes the other business owner might be entitled to the government’s JobSeeker payment if their income has dropped sharply or they have lost their employment. (Hyperlink to the earlier article.)
Recipients should also know that they will have to pay tax on the JobKeeper payment, just like any other income.
Applications are open from 20 April and can be made HERE.
What else can you do?
uno expert mortgage broker Amanda Denham suggests that talking to your existing lender and negotiating a cheaper rate on your home loan might make all the difference in helping you stay on top of your finances. At uno we offer this service free of charge, so reach out to one of our brokers today if you would like help from us as we can contact your bank on your behalf.
Many lenders are currently offering generous cashbacks and in combination with a lower interest rate, this might just be enough to help ensure you don’t fall behind on your home loan costs for the next few months.
If your home loan comparison rate doesn’t start with a 2, you may be able to get a better deal by shopping around. Check out our loanScore tool. It’s a quick and easy way to see if there is a better home loan rate available and if you could be saving money.
This information in this article is general only and does not take into account your individual circumstances. It should not be relied upon to make any financial decisions. uno can’t make a recommendation until we complete an assessment of your requirements and objectives and your financial position. Interest rates, and other product information included in this article, are subject to change at any time at the complete discretion of each lender.