Stimulus package - JobKeeper Payment
JobKeeper Payment – Wage subsidy plan to help Australians keep jobs
As you may be aware, the Australian government has announced a $130 billion JobKeeper payment program to support businesses and help those Australians who have been affected by the economic impact caused by the coronavirus pandemic retain their jobs.
This bulletin will detail the following:
1. What is the JobKeeper Payment?
2. What are the eligibility requirements to access it?
3. When and how the payments will be made?
4. How to apply / what to do next
1. What is the JobKeeper Payment?
The JobKeeper payment is a subsidy to businesses, allowing them to retain employees that they would otherwise have to stand down or reduce their pay.
Employers will receive a payment of $1,500 per fortnight per eligible employee. Every eligible employee must receive at least this $1,500 per fortnight (less any applicable withholding tax) from the business. The $1,500 is before tax.
The payment will be paid to employers (for up to six months) for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer.
2. Eligibility requirements
Employers will be eligible to receive the wage subsidy if:
- Their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month)
- The business is not subject to the Major Bank levy
- The business must have been employing an eligible employee as at 1 March 2020; and confirm that it is going to continue employing that individual to receive the JobKeeper payments.
Eligible employees will need to meet the following criteria:
- 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 basis for longer than 12 months as at 1 March 2020)
- Are at least 16 years of age
- Are an Australian citizen, the holder of a permanent visa, a Protected Special CategoryVisa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) VisaHolder
- Are not a recipient of a JobKeeper Payment from another employer.
Not-for-profit entities and self-employed individuals can also be eligible to receive the JobKeeper payments, as long as they meet the turnover tests that apply to businesses mentioned above.
3. Timing and payment
The subsidy will start on 30 March 2020 (when the payments were announced), with the first payment being made to employers in the first week of May. These first payments will include all backdated amounts from 30 March 2020 onwards.
Each eligible employee will be paid a minimum of $1,500, before tax, and then the employer can pay any top-up amount if needed on top of that.
The payment will work 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 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 1 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).
- Employers must continue to pay superannuation on an employee's regular wages, but it will be up to the employer if they want to pay superannuation on any additional wages paid because of the JobKeeper Payment.
4. How to apply / What to do next
Please note, currently as this payment is not legislation, a lot of the detail has not yet been released.What you can do for now is register your interest to receive JobKeeper Payments via The AustralianTaxation Office (ATO) by going to the following link:
Subsequently once the legislation has gone through, eligible employers will be able to apply for the scheme by means of an online application.
In this application, employers will need to identify eligible employees for the JobKeeper payments.They must also provide monthly updates to the ATO to confirm that the employees are still being retained and that the business continues to satisfy the requirements to receive the payments.
Self-employed individuals can also register their interest at the link provided above. They will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.
For further information or assistance on any of the above, please contact us at knp. More detail is also available by following these links:
Treasury link - https://treasury.gov.au/coronavirus/jobkeeper