Jobkeeper: Fair or Unfair

In March 2020 the government introduced the JobKeeper payment scheme; a response intended to keep more Australians employed while supporting business owners affected by the current economic downturn due to the global pandemic. This was a great initiative introduced by the government however due to a strict set of guidelines on who is eligible for JobKeeper and the Cashflow Boost, getting the support doesn’t come easy for some. 

Something as simple as whether you report your BAS monthly/quarterly/annually can determine whether your business is eligible to receive the government financial support or not. The reporting cycle also gets you a different amount of cash flow boost.   

While there is supposedly a lot of support – there are a lot of business owners missing out. Following are some case studies from we have experienced:

  1. Cafe ABC – A business owner opened a cafe in December 2019, registered for annual BAS lodgement and was denied the cashflow boost. In order to determine your eligibility for Cashflow boost the ATO requires a lodgement to prove your income. Had they lodged a December 2019 BAS if they were on quarterly basis, they would have received the cash flow boost.
  1. Hairdresser ABC – A Hairdresser was advised by their bookkeeper that they do not qualify for Jobkeeper. However looking at all the tests we found they were eligible. It does not hurt to take a second opinion if you have been told by one provider that you are not eligible for the boosts.
  1. Wine Distribution business ABC– A wine distribution business located in Northeast Victoria opened its doors in January of this year. The business immediately suffered as a result of the bushfires and just when things were looking promising, their business was once again affected by the pandemic. Unfortunately this newly established business was not eligible to receive any Covid financial support because they had registered for quarterly BAS lodgement and did not make any sales in the first three months of opening their business. Many new business owners find themselves in this exact predicament. With the start-up costs associated with opening your doors while trying to build up your clientele, the financial burden weighs heavily as they are being denied the support. 
  1. Carpenter ABC – A carpenter who had not earned any business income since April 2020 was ineligible to receive any Covid financial support because of a mistake made by his accountant. In this scenario the carpenter hired a Tax Accountant to lodge his tax returns however the accountant did not process the returns with the ATO even though the client had signed the documentation. In the eyes of ATO they are behind by 3 years of lodgement. They were not GST registered so no BASes to prove in the absence of Tax returns.Due to this situation the client has not been able to receive the Jobkeeper. Unfortunately this is not an isolated incident, time and time again business owners are expected to put their trust in accountants who can often fall short and it is the business owners who suffer.

These are unprecedented and difficult times for every business owner and it’s essential to our economy that businesses remain open. Unfortunately, due to the strict eligibility criteria many business owners are missing out and have no other choice than to shut their doors for good. Now more than ever Accountants and Bookkeepers have a huge responsibility in relaying accurate and timely information to their clients to help them receive the financial support they need. 

At Sum and Substance we are passionate about providing accurate and timely information to our clients. If you would like our support in determining your eligibility for JobKeeper and Cashflow Boost or simply have a question about the economic stimulus packages offered then please contact us. We can be reached at (03) 9424 9447 or email. You can directly book in  a time to chat by clicking here.