Last night the Prime Minister, Scott Morrison, announced the latest in the Covid-19 stimulus packages that aim to ease the impact of the pandemic on our local economy. The main focus of the JobKeeper Payment is to keep more Australians in jobs and support the businesses that are affected by the Coronavirus. By maintaining employees in the workforce, the government anticipates a quicker recovery once the crisis is over.
What is it?
The JobKeeper payment is a $1,500 fortnightly payment paid to employees via their employer if their business has suffered a downturn due to the virus.
Who is eligible?
Employers (including non-for-profits) with a turnover of less than $1 billion are eligible if their turnover is reduced by more than 30% relative to a comparable period a year ago (of at least a month).
Employees are eligible if they were employed on 1st March 2020 and continue to be engaged by that employer – including full-time, part-time, long-term casuals and stood down employees. They needed to have worked with their employer on a regular basis for at least 12 months as at 1st March 2020. The employee must also be an Australian citizen or hold a permanent visa, or a Special Category Visa (some with attached conditions).
If the employee is accessing support through Services Australia (i.e. Job Seekers allowance), then the employee will need to notify Services Australia of their new income.
What about if you run your own business?
Self employed individuals will be able to access the JobKeeper Payment if they have suffered a 30% decline in turnover to a comparable period (of at least a month).
When does it start and how long will it last?
The subsidy will start on 30th March 2020 with the first payments to be received by employers in the first week of May. Payments will be provided for up to 6 months and will be made to the employer monthly in arrears by the ATO.
What do you have to do?
Employers must elect to participate in the scheme by completing the application with the ATO. At the time of writing, the ATO application is not currently available however you can register your interest on their website and you will be notified about updates as they occur. Subsequently, eligible employers will be able to apply for the scheme by means of an online application. 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.
Once registered, the employer will receive $1,500 per fortnight for each eligible employee, and their employees will receive this payment as follows.
- If an employee ordinarily 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(s).
- If an employee ordinarily receives 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.
- If an employee was employed on 1st March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee 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.
The team at Care Accounting are always happy to help and discuss how the stimulus packages could apply to your situation. As per the government guidelines, we are all now working from home but can be contacted via email where we can arrange a telephone conversation or online meeting as necessary.