Jobkeeper Payments to Active, Non-Employee, Eligible Business Participants
Not nearly as much has been written about Jobkeeper payments to active, non-employee “eligible business participants”, as has been written about the Jobkeeper payments to employees, but the payments can be critical for small business operators. One active, non-employee eligible business participant from each Eligible Business is entitled to $1,500/fortnight, similar to the business’ eligible employee.
To be an eligible business participant, the person needs to meet these requirements:
- There is a limit of one person per business, so no other non-employee from the business must have been nominated as the eligible business participant for that business.
- As at 1 March 2020, and for the fortnight for which the JobKeeper allowance is claimed, the person must have been:
(a) actively engaged in the business carried on by the business, but not as an employee;
(b) at least 16 years of age; and
(c) one or more of the following:
(i) a sole trader; or
(ii) a partner in the partnership; or
(iii) an adult beneficiary of the trust; or
(iv) a shareholder in or director of the company that carries on the business.
(i) residing in Australia and an Australian citizen or permanent resident, or
(ii) an Australian resident for income tax purposes and a Subclass 444 (Special Category) visa holder;
- The person must not:
(a) be currently employed by another entity (other than on as a casual); nor
(b) have given a notice either to any other entity to be nominated as an eligible employee, or to the Commissioner or any other entity to be nominated as an eligible business participant for another business; nor
(c) currently receiving parental leave pay, or dad and partner pay; nor
(d) currently totally incapacitated for work and receiving payments under an Australian workers’ compensation law in respect of your total incapacity to work.
- The person must complete the relevant form, here, and the eligible business must enrol the person, as well as all of the eligible employees, with the ATO. Click here to see the ATO’s steps, but the enrolment of eligible business participants is not as straight-forward as enrolling eligible employees, and I have not managed it myself at the time of writing this!
The business eligibility criteria is largely the same for a business that is an employer, but there are ineligible entities listed here. For most small businesses, it means the business needs to suffer a loss more than a 30% of its turnover during a relevant period in order to be eligible. See here for details of business eligibility.
Here are some examples, assuming the business is eligible:
(a) A non-employee director of a company, whether or not that person is in receipt of director fees, who actively works in the business, is an eligible business participant.
(b) A non-employee director of a trustee company that operates a business, and who is also a beneficiary of a trust and who actively runs the business, is an eligible business participant. This one is close to home for me.
(c) A husband and wife are the only shareholders of a company. The wife is the sole director and is an employee of the company. The husband does not take an active role in the company, and was not actively engaged in the running the business on 1 March 2020. The husband is not an eligible business participant, but the wife will be an eligible employee for Jobkeeper payments.