Under the JobKeeper Payment, businesses impacted by the coronavirus will be able to access a subsidy to continue paying their employees. The Government will provide a fortnightly payment of $1,500 per eligible employee until 27 September 2020.
The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May. Employers will be able to enrol in the JobKeeper payment from the 20th April, 2020 onwards.
What is the JobKeeper Payment?
The JobKeeper Payment is a temporary scheme open to businesses impacted by the coronavirus. This assistance will help businesses to keep people in their jobs and re-start when the crisis is over.
The JobKeeper Payment will support employers to maintain their connection to their employees.
For employees, this means they can keep their job and earn an income – even if their hours have been cut.
The JobKeeper Payment will also be available to sole traders or self-employed people.
Eligibility for Employers
Employers will be eligible if:
- on 1 March 2020, they carried on a business in Australia or were a not-for-profit organisation that operated in Australia
- they employed at least one eligible employee on 1 March 2020
- their eligible employees are currently employed by their business for the fortnights they start to claim for, and continue to claim for (including those who are stood down or re-hired)
- their business has faced a:
- 30% fall in turnover (if their aggregated turnover is $1 billion or less)
- 50% fall in turnover (if their aggregated turnover is more than $1 billion), or
- 15% fall in turnover including donations and gifts (if they are an ACNC-registered charity and not a university or school)
- they pay their eligible employees at least $1,500 before tax for the fortnights they start to claim for, and continue to claim for
- they (or you on their behalf) successfully enrol for the JobKeeper scheme and apply for JobKeeper payments.
Self-employed individuals will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test outlined above, and are not a permanent employee of another employer.
The rules also note that once an employer decides to participate in the JobKeeper scheme, all eligible employees must be covered by the scheme. The employer cannot select which eligible employees will participate in the scheme. This ‘one in, all in’ rule is a key feature of the scheme.
Once the employer has identified the employees they intend to claim the JobKeeper payment for, they need to tell them of their intention to claim the payment. A JobKeeper employee nomination notice will need to be provided to the employee which they will need to complete and return to the employer by the end of April.
Establishing Your Fall In Turnover
Employers will need to satisfy the 30% decline in turnover through:
- GST turnover for March 2020 with GST turnover for March 2019
- projected GST turnover for April 2020 with GST turnover for April 2019
- projected GST turnover for the quarter starting April 2020 with GST turnover for the quarter starting April 2019
Eligibility for Employees
Eligible employees are employees who:
- are currently employed by the eligible employer (including those stood down or re-hired)
- were employed by the employer at 1 March 2020
- are full-time, part-time, or long-term casuals (a casual employed on a regular and systemic basis for longer than 12 months as at 1 March 2020)
- are a permanent employee of the employer, or if a long-term casual employee, not a permanent employee of any other employer
- are at least 16 years of age at 1 March 2020
- are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020
- were a resident for Australian tax purposes on 1 March 2020
- are not in receipt of a JobKeeper Payment from another employer
How Will Payments be Handled?
Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.
Where employers participate in the scheme, their employees will receive this payment as follows.
- If an employee receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee.
- If an employee would otherwise receive less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight before tax.
- If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight before tax.
No superannuation guarantee payments are required to be paid on any additional payment made because of the JobKeeper Payment.
Payments will be made to the employer monthly in arrears by the ATO. However, for the month of April, the Commissioner can make an advance payment.
How To Apply
Employers will be able to enrol in the JobKeeper payment from the 20th April, 2020 onwards.
The first payment will be received by employers from the ATO in the first week of May.
Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.
Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.
It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
Further details for businesses for employees will be provided on the ATO website.
Self Employed or Business without Employees
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via The Australian Taxation Office (ATO) from 30 March 2020.
Businesses without employees will need to provide an ABN for their business, nominate an owner to receive the payment and provide that owner’s Tax File Number and provide a declaration as to recent business activity. A business owner who is a permanent employee of another employer is only eligible for the JobKeeper Payment from that employer.
People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the person’s bank account.
It’s during these uncertain times, when using a reputable and experienced business advisor is key to unlocking all the benefits on offer to you.
Please feel free to contact us if you have any queries in relation to the Government Stimulus Packages or wish to discuss any concerns you may have with your business.