What is the JobKeeper Payment?

The JobKeeper Payment is a temporary scheme open to businesses impacted by the Coronavirus. It is also available to those who are self-employed.

The payment is a subsidy of $1,500 per fortnight, per employee, paid by the government to eligible employers for up to six months.

Eligibility

Employers, including not-for-profits, will be eligible for the subsidy if:

• Their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least one month); or
• Their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least one month); and
• The business is not subject to the Major Bank Levy.

Full-time, part-time and long-term casuals who have lost their jobs as a result of COVID-19 and stood down employees will be eligible. Let’s drill down further into the eligibility criteria as follows:

• For casual employees, they must have been with their employer on a regular basis for the past twelve months up to March 1, 2020;
• Employees must:
  • hold Australian citizenship;
  • hold a permanent visa;
  • be a Protected Special Category Visa Holder;
  • be a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more; or,
  • or a Special Category (Subclass 444) Visa Holder.

Those who are self-employed will be eligible to receive the JobKeeper Payment where they have suffered, or expect to suffer, a 30 per cent decline in turnover relative to a comparable period a year ago (of at least a month).

How to Access the Scheme

Employers will need to apply to the Australian Tax Office and provide information supporting a downturn in their business.  They will also need to report the number of eligible employees on a monthly basis.

Employers will receive a payment for each employee that was on their books on March 1, 2020, and continue to be engaged by that employer.  This includes full-time, part-time, long-term casuals and those stood down employees.

Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

If an employee is receiving assistance through Services Australia, such as the JobSeeker and related payments announced by the government in recent weeks, and their employer would be eligible for the JobKeeper Payment, they should advise Services Australia of their change in circumstances via MyGov or by telephone.

How does the JobKeeper Payment work?

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 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 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.

It will be up to the employer if they want to pay superannuation on any additional wages paid due to the JobKeeper Payment.

Payments will be made to the employer monthly in arrears by the ATO.

When does this all start?

The subsidy will start on March 30, 2020, with the first payments to be received by employers in the first week of May. Businesses will be able to register their interest in participating in the Payment from March 30, 2020, on the ATO website at https://www.ato.gov.au/general/jobkeeper-payment/

Please note that at the time of writing (31^st March) this legislation has not yet received Royal Assent; the legislation must pass Parliament before receiving Royal Assent to become operational. 

Where can I find more information?

More information has been provided by the Federal Government via a series of fact sheets.  These can be found at the following links:

For employers:

Information about the JobKeeper Payment for employers can be found at https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employers_0.pdf

For employees:

Information about the JobKeeper Payment for employers can be found at https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employees_0.pdf

This is a difficult time for individuals and business owners, we encourage all of those who have been impacted financially by the Coronavirus crisis to access the assistance being provided by the Australian Government.  More information on earlier assistance packages announced by the government can be found HERE.

If you have friends or family who are wondering what they should be doing about their investments or superannuation during these trying times, please make contact with one of our advisers HERE and we will be in touch within 24 hours.