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JobKeeper employment termination rules clarified

Adrian Flores
Adrian Flores
22 June 2020 1 minute readShare

The Tax Office has revealed further details about how it will approach employment termination payments (ETPs) in regard to JobKeeper after vowing to maintain the integrity of the scheme as a high priority.

The ATO said that from the fortnight starting from 8 June until the end of the scheme, ETPs cannot be included as part of the $1,500 an employer makes to eligible employees and claims as a JobKeeper reimbursement from them.

“If you claimed JobKeeper payments that included an ETP paid to a terminated employee between JobKeeper fortnights one to five (from 30 March to 7 June), we will not recover an overpayment that has occurred as a result of these payments,” the ATO said.


“Once your employee is terminated, they are no longer eligible for JobKeeper payments and you will need to change their eligibility status in your business monthly declaration.”

Last week, ATO assistant commissioner Karen Foat said businesses with individual clients receiving will also need to be factored in this tax time.


“How these are taxed really does depend on the circumstances, like was it a genuine redundancy, how long has the person worked with the employer?” she said.

“I would simply suggest most of the information will be included in income statements or as an employment termination payment summary. So then, that information is shown how it should be taxed and included in the return.”



JobKeeper employment termination rules clarified
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Adrian Flores
Adrian Flores

Adrian Flores is the deputy editor of MyBusiness. Before that, he was the deputy editor for SMSF Adviser as well as features editor for ifa (Independent Financial Adviser), InvestorDaily, Risk Adviser, Fintech Business and Adviser Innovation.

You can email Adrian at [email protected].

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