The JobKeeper Payment is designed to help businesses affected by the Coronavirus to cover a fixed amount of $1,500 per fortnight for each of their employees’ wages. The JobKeeper Payment is a temporary scheme for up to six months open to businesses impacted by the Coronavirus.
Employers (including non-for-profits) will be eligible for the subsidy if:
- Their business has a turnover of less than $1billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month); or
- Their business has a turnover of $1billion or more and their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month); and
- The business is not subject to the Major Bank Levy.
Employers must elect to participate in the scheme. They will need to make an application to the Australian Taxation Office (ATO) and provide supporting information demonstrating a downturn in their business. In addition, employers must report the number of eligible employees employed by the business on a monthly basis.
Eligible employers will receive the payment for each eligible employee that was on their books as at 1st March 2020 and continues to be engaged by that employer including full-time, part-time, long-term casuals and stood down employees.
Casual employees eligible for the JobKeeper Payments are available for those employees who have been with their employer on a regular basis for at least the previous 12 months as at 1stMarch 2020. To be eligible, an employee must be an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa 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) Visa Holder.
Eligible employers who have stood down their employees before the commencement of this scheme will be able to participate. Employees whom are re-engaged by a business that was previously their employer on 1st March 2020 will also be eligible.
In circumstances where an employee is accessing support though Services Australia (formerly Centrelink) because they have been stood down or had their hours reduced will need to continue to advise Services Australia of their new income.
Self-employed individuals 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 prior period (of at least one month).
Businesses without employees will need to provide an ABN for their business, nominate an individual to receive a payment and provide that individual’s tax file number and provide a declaration as to recent business activity. Please note we are awaiting clarification on whether this will include businesses operated through trusts and companies without employees.
Where employees have multiple employers, only one employer will be eligible to receive the payment. The employee will need to notify their primary employer to claim the JobSeeker Payment on their behalf. The claiming of the tax-free threshold will, in most cases, be sufficient notification that an employer is the employee’s primary employer.
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 to their current wage if in excess of this amount.
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 wage paid because of the JobKeeper Payment. Payments will be made to the employer monthly in arrears by the ATO.
The subsidy will start on 30th March 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 30th March 2020 on the ATO website.
How to apply
Businesses with employees
Initially, employers can register their interest in applying for the JobKeeper Payment via The Australian Taxation Office (ATO) from 30th March 2020. The ATO will then send you correspondence and updates directly. Subsequently, eligible employers will be able to apply for the scheme by means of an online application.
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.
Businesses 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 30th March 2020. The ATO will then send you correspondence and updates directly.
Businesses without employees 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.
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 individual’s bank account.
For further information for employers, click here.
For further information for employees, click here.
The Team at Rawson Verco Need are ready to assist you to understand which of the measures are relevant to your circumstances and how they can be applied to help you navigate through these challenging times.