Insights

JobKeeper payment available to business owners who take trust distributions or dividends in ‘lieu’ of salary

April 7, 2020

Business owners who operate through a company or trust and remunerate themselves by way of drawings through the year and then, at year end, pay dividends or a trust distribution to offset against these drawings, might be very interested to learn that they will be entitled to the $1,500 per fortnight JobKeeper payment, albeit on a limited basis.  This may be a surprise to those who understood the payment to be available only in respect of individuals actually ‘employed’ by the business entity.

The Government has announced, via a Frequently Asked Questions document available on the Treasury website, that the fortnightly JobKeeper payment of will be available in relation to the following individuals associated with the relevant eligible business, even if they are not strictly employed in that business i.e. they effectively take partnership distributions, trust distributions or dividends ‘in lieu of’ salary:

  • One (presumably non-corporate) partner in a partnership
  • One individual beneficiary of a trust
  • One director or shareholder in a company (but presumably not both)

The fortnightly payment can be received by such entities for those individuals in along with payments it receives for eligible employees.  

It is crucial to note that the CashFlow Boost (being the payment to businesses equal to the amount they withhold under PAYG withholding for a certain period) does NOT extend to circumstances such as these.  No partnership distributions, trust distributions or dividends paid to ‘owners’ of businesses operated through partnerships, trusts or companies respectively, are taken into account for the purposes of working out the business’ entitlement to the CashFlow Boost.

The Frequently Asked Questions Fact Sheet can be found here:

https://treasury.gov.au/sites/default/files/2020-04/JobKeeper_frequently_asked_questions_0.pdf