On Friday 24 April, the Federal Treasury provided further clarification on the JobKeeper scheme and its application to specific groups throughout Australia. These updates follow after already 400,000 Australian businesses have enrolled in the JobKeeper scheme, providing further income to almost 2.4 million Australians. Amongst these Australians are employees of not-for-profit charities and practitioners of religious institutions who will be affected by the Treasury’s new updates.
Prior to this announcement, many religious practitioners were facing difficulties determining whether they could apply for JobKeeper. Because the Rules provided that to be an eligible employee, the individual needed to be “employed by the entity”is caused confusion for ministers of religion, who are technically not employees but spiritual appointees. There rules did not clearly state whether or not ministers like priests, deacons or other practicing individuals were considered employees for the purposes of the JobKeeper legislation. As many institutions provide an income for practicing members, employee status is often still recognised. However, where employee status is difficult to determine, the Treasury provides the following update:
Changes will allow JobKeeper Payments to be made to religious institutions in respect of religious practitioners (with the exception of those that are students only), recognising that many religious practitioners are not ‘employees’ of their religious institutions.
This means that institutions will be able to provide JobKeeper to certain ministers and practitioners despite no formal “employee-employer” relationship. As many institutions face the difficulty of JobKeeper eligibility, this provision will benefit those who practice religion without a formal employment contract.
International Aid Organisations
Not-for-profit charities include those registered under the Overseas Aid Gift Deductibility Scheme (OAGDS) which allows for entities to provide charity and tax-deductible donations to developing countries. Under the guidelines of this scheme, the following criterion for endorsement includes:
- The organisation delivers overseas aid activities
- The organisation has the capacity to manage and deliver overseas aid activities
- Overseas aid activities are delivered in partnership with in-country organisations, based on principles of cooperation, mutual respect and shared accountability
However, in conjunction with this criterion, the Treasury has announced that charities under the OAGDS must also pursue their objectives principally in Australia, as follows:
Changes will allow entities that are endorsed under the Overseas Aid Gift Deductibility Scheme or for developed country relief to meet the requirement that not-for-profits pursue their objectives principally in Australia. The current requirement that employees must be Australian residents to be eligible under the JobKeeper program would remain in place.
Please note, as at the time of this article, the detail is yet to be passed as further rules or legislation.
These changes affect many individuals and organisations throughout the country and will be considered variably across different states and territories. For skilled assistance in determining eligibility of overseas NFP charities or religious institutions or practitioners, please contact our experienced legal team.
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Documents for further reading:
- Media Statement from the Federal Treasurer dated 24 April 2020: https://ministers.treasury.gov.au/ministers/josh-frydenberg-2018/media-releases/jobkeeper-update