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What GPs need to know about JobKeeper


Matt Woodley


29/04/2020 4:43:50 PM

Eligible businesses have received a one-month extension to formally enrol in the Government program – find out if your practice qualifies.

Using JobKeeper website
Businesses have received a one-month extension to formally enrol in the Federal Government’s JobSeeker program.

UPDATED

The Australian economy has been ravaged by the coronavirus pandemic, and general practice has not been immune to the downturn.
 
Many practices have reported a major drop in patients and turnover and Dr Michael Wright, Chair of RACGP Expert Committee – Funding and Health System Reform (REC–FHSR), told newsGP they will likely be eligible to receive the JobKeeper payments.
 
‘This seems like a fairly simple support for many businesses, including general practices,’ he said.
 
‘The business has to have had a turnover drop of more than 30%, which many GPs are reporting, and one of the main points is there is no harm in registering.
 
‘Although it’s not being paid until 1 May, it will be backdated to the end of March. Check with your accountant or financial advisor, but it’s likely that you will be eligible.’
 
The deadline to formally enrol in the program has been extended until 31 May. Find out below if your practice qualifies.*
 
JobKeeper overview

  • JobKeeper is a Federal Government wages subsidy for businesses significantly impacted by the coronavirus
  • The payment is a $1500 reimbursement per employee each fortnight from 30 March 2020 to 27 September 2020 (the Government will pay this amount in arrears monthly)
  • The $1500 payment represents 70% of the national median wage
  • Under the scheme, all employees receive at least $1500 per fortnight before tax. Employees that were paid less than that amount will see an increase in income. Full-time and part-time employees will be eligible for the same subsidy amount
  • Business owners who do not have employees (sole traders) may be eligible to claim the payment towards their own wages
  • Businesses have until 31 May 2020 to formally enrol to claim JobKeeper payments
  • Employers can enrol through the Australian Tax Office (ATO)’s business portal, or through a registered tax agent
  • Employers participating in the scheme will need to make monthly reports to the ATO
  • There is no superannuation guarantee levy on the JobKeeper payment
Which practices are eligible?
Eligible practices include those with an aggregated turnover of less than $1 billion (for income tax purposes) and which estimate their GST turnover has fallen or will likely fall by 30% or more; or an aggregated turnover of $1 billion or more (for income tax purposes) and which estimate their GST turnover has fallen or will likely fall by 50% or more.
 
The business must not be subject to the Major Bank Levy.
 
Practice owners are advised to compare their monthly or quarterly turnover with the same period in 2019 to establish whether they have, or are likely to see, turnover fall by the above amount.
 
There will be tolerance if an estimate made in ‘good faith’ proves slightly more than the actual fall in turnover. The projected GST turnover is a ‘point-in-time test’ and needs to be a reasonable assessment of what was likely at the time.
 
Practices do not need to prove that the cause of the fall in turnover is due to coronavirus, and the Tax Commissioner has discretion to set out alternative tests to establish eligibility in specific circumstances.
 
The fall in turnover will be calculated separately for each individual business within a corporate group, although the aggregated turnover will apply to the group as a whole; ie for a corporate group with a total annual turnover of $1.5 billion, each individual business will be assessed separately, and only those that have seen (or are likely to see) a fall of 50% or more will be eligible.
 
If a corporate group has a total annual turnover of $2 million, for example, each individual business in the group will be assessed against the 30% threshold.
 
Which employees are eligible?
 
  • Those employed by the business at 1 March 2020 (employees stood down after 1 March can be re-hired)
  • Any full-time, part-time or long-term casual (ie employed for more than 12 months and not a permanent employee elsewhere)
  • Australian citizens, holders of a permanent visa or sub-class 444 Visa holder at 1 March 2020
  • Australian residents for tax purposes at 1 March 2020
  • Employees on parental leave (unless that leave is paid by Services Australia)
General practice trainees who were employed on 1 March, and whose practice is eligible, are eligible for JobKeeper.
 
Further information on financial assistance for practices is available on the RACGP website.

CORRECTION: This article originally incorrectly stated that general practice trainees would not be eligible for JobKeeper because they are on short-term contracts.
 
*This advice is general in nature and does not take into account individual circumstances. Members are encouraged to seek tailored professional advice from their accountant or financial advisor.
 
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Dr Frederik Marthinus Janse Van Rensburg   30/04/2020 8:01:55 AM

The vast majority of GP work does not involve GST on income (as opposed to the GST paid by contractors on their invoices) so Jobkeeper is unlikely to kick in for most GPs who don't actually run a Practice


Dr Janice Faye Sheringham   2/05/2020 6:02:05 PM

Dr van Rensburg, I believe there are multiple models of practice in which, to ensure doctors are eligible for superannuation, they have formed limited companies which then contract the doctors’ services to an employing medical practice company. This company provides admin support for the doctors, including support staff, premises and all the day to day operations of the medical practice, a SERVICE on which GST is payable. As that charge is largely (but not entirely) based on bookings, it is not hard to see that such a practitioner, even working remotely via telehealth, may suffer a reduced level of fees booked, which, after payment of admin fees, will leave that practitioner likely to be eligible for JobKeeper. Certainly a tricky bit of accounting, but a worthwhile subsidy to follow none the less!


Dr Janice Faye Sheringham   2/05/2020 6:03:19 PM

Does it matter how the GST is generated? My accountant says not!