Talk to an accountant - farmers should make the most of JobKeeper cash

JobKeeper funds surprise farmers who discover they're eligible

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Mum and dad farming partnerships which normally don't employ workers are belatedly discovering they qualify for $1500 a fortnight

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Much to the surprise of many, family farming enterprises are qualifying for the federal government's JobKeeper payment scheme - in droves.

Even mum and dad partnerships which normally do not employ help on the farm have discovered one of the two partners is actually eligible for the $1500 fortnightly payment as part of Canberra's economic stimulus response to the coronavirus emergency.

Although various agricultural markets including wool, cotton and wine slumped as the pandemic hit, in many cases farmers were quite unaware their businesses could claim JobKeeper because they were focused on recently improved seasonal conditions and working flat out to make the most of that opportunity.

Or some continued struggling with drought.

In fact, producers involved in a wide spectrum of farm commodities may qualify because of revenue falls attributable to the economic downturn.

Everybody should talk to their financial adviser, if they haven't already - Mike Guerin, AgForce Queensland

"We've encouraged members to look at it very carefully because even if you've been impacted by drought and didn't believe COVID-19 was relevant to your farm's situation you could be eligible," said AgForce Queensland chief executive officer, Mike Guerin.

"Even if you don't have employees you may be eligible.

"Don't assume anything. Everybody should talk to their financial adviser, if they haven't already."

Who qualifies

The temporary JobKeeper subsidy is paid to businesses which can indicate a 30 per cent drop in turnover against the same monthly or quarterly period a year ago.

Options also exist for farms in drought to compare turnover with years when seasonal conditions were better.

In certain cases estimated market income losses may be used to assess potential revenue declines over the qualifying period.

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Farm enterprises claiming the subsidy must pay at least $1500 a fortnight (pre-tax) to their permanent, part-time or regular casual workers, even if staff previously earnt less than this amount.

JobKeeper also allows businesses to claim for one eligible business participant in a family partnership.

The total payout is worth almost $20,000 to eligible businesses over the full six month subsidy period, however, a number of potential recipients have now realised they missed the initial May 29 deadline for applications to the Australian Taxation Office.

Late applications

Fortunately, late enrollments will still be accepted before June 30.

If successful, employers should be able to pay workers the remaining nine fortnightly installments between May 25 and September 27.

If your farm business is eligible you're just as entitled to these payments as a car dealership or a cafe - Ben Trengove, William Buck Chartered Accountants

"Surprisingly, a lot of our farming clients discovered they do fit into the criteria," said Adelaide-based director with national accounting firm William Buck, Ben Trengove.

"JobKeeper is a huge deal if you are eligible, but there are a lot of misconceptions and assumptions about eligibility."

He had spent considerable time advising farmer clients they may qualify.

"This is a stimulus measure for the benefit of the broader economy and if your farm business is eligible you're just as entitled to these payments as a car dealership or a cafe," he said.

"Our ag clients are good employers of all sizes and have good reason to make an inquiry at least."

If seasonal conditions are the only reason your turnover is down you won't meet the criteria, but at first glance it's not easy to say what's in or out - Scott Christian, Boyce Chartered Accountants

Boyce Chartered Accountants director Scott Christian estimated two thirds of about 80 farmer clients he worked with in Far West and Central West NSW signed on to JobKeeper, and it genuinely was keeping people in work.

"Quite a few already knew about it - more in some commodity sectors than others," he said.

"Nobody should expect they'll definitely get anything, but it's worth having the conversation with your accountant.

"If seasonal conditions are the only reason your turnover is down you won't meet the criteria, but at first glance it's not easy to say what's in or out."

Woolgrowers were clearly feeling the impact of a 40pc dive in wool market values after buying orders from coronavirus impacted China and Europe fell away in February-March.

The goat meat market was also hit hard by a 50pc export price drop from about $4.40 a kilogram in March, hurting many western NSW and Queensland graziers.

Frustrating, unclear

However, NSW Farmers business and economics committee chairman Peter Wilson was frustrated by how unclear and poorly promoted JobKeeper had been in farming areas.

He was flabbergasted farming partnerships which technically did not employ any workers, apart from the owners, may qualify.

I doubt many farmers had time or felt the circumstances were right to consider themselves for JobKeeper - Peter Wilson, Trangie

"It's infuriating we've had to work so hard, jumping through so many hoops to get any useful assistance to help farm businesses in drought - and that was mostly loan money to be repaid - yet government largess is suddenly available because of coronavirus," he said.

"There may be many cases where the money is keeping people in jobs, but farmers might have been happier to qualify for funds to help with restocking or sowing crops."

On many farms, including his own at Trangie, owners with employees had not considered putting workers off at the moment.

Most were busily trying to get back in business after scoring their first good autumn rain in three years.

"We certainly understand coronavirus has hurt the economy, and disrupted agricultural markets, but I doubt many farmers had time or felt the circumstances were right to consider themselves for JobKeeper."

Meanwhile in South Australia Mr Trengove noted, aside from JobKeeper, the ATO also offered cash flow boost credit to employers to assist with payroll costs over three quarters, and some states provided payroll tax relief to big agribusiness employers.

SA farmers may also qualify for a $10,000 cash grant to employ extra staff.

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