Stage three of the Government’s response to COVID-19
The Prime Minister has announced the third instalment of the Coronavirus Economic Support package, labelled a JobKeeper Payment. In summary, a fortnightly wage subsidy of $1,500 per eligible employee is available for a 6 month period to employers affected by the coronavirus pandemic. The employer must pass this payment on to their employees. One of the key challenges is that the subsidy from the Government is paid in arrears, so employers will need to continue to operate their payroll at the appropriate levels to qualify.
Employer eligibility:
- If turnover is less than $1 billion, then turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month).
- If turnover is more than $1 billion, then turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month).
Eligible employees:
- 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 or a Special Category Visa Holder; and
- Are not in receipt of a JobKeeper Payment from another employer.
To receive the JobKeeper Payment, employers must:
- Register an intent to apply on the ATO website (ato.gov.au)
- Once it is available, apply online and assess that they have or will experience a 30% (or 50%) decline in turnover.
- Provide information to the ATO on eligible employees. For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
- Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For those employees earning more than this amount, the employer is able to provide them with a top-up.
- Notify all eligible employees that they are receiving the JobKeeper Payment.
- Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.
An online application will be available in due course and the first payment will be received by employers from the ATO in the first week of May.
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via ato,gov.au from 30 March 2020. They will need to provide an ABN, nominate an individual to receive the payment and provide a declaration as to recent business activity.
Payment Amounts
- If employee ordinarily receives $1,500 or more per fortnight before tax, they will continue to receive their regular income. This payment assists their employer by subsidising their wage.
- If an employee ordinarily receives less than $1,500 per fortnight before tax, their employer must pay a minimum of $1,500 before tax per fortnight.
- 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 1 March, subsequently terminated, then re-engaged by the same eligible employer, the employee will receive at a minimum $1,500 before tax.
- It is up to the employer if they want to pay superannuation on any additional wage paid due to the Jobkeeper payment.
At this stage we are working with the Treasury announcements and not actual legislation. Parliament will be re-convened to pass law and hence further details will emerge over the next week.
For any questions on this matter or if you require any assistance applying for the JobKeeper Payment please contact your local Accru advisor.
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