What is the JobKeeper Payment?
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a wage subsidy from the Government to continue paying their employees.
- Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of 6 months.
- Eligible employees will receive a minimum of $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 JobKeeper Payments.
$1,500 per employee subsidy represented 70 per cent of the medium wage and 100 per cent of the average wage of those working in sectors hardest high by COVID-19 – retail, hospitality and tourism. This subsidy will support 6 million employees.
Eligibility criteria for employers
- Employers will be eligible for the subsidy if they meet the turnover test as per below:
- their business has a turnover of less than $1 billion and their turnover has fallen by more than 30 per cent (of at least a month); or
- their business has a turnover of $1 billion or more and their turnover has fallen by more than 50 per cent (of at least a month); and
- the business is not subject to the Major Bank Levy
- The employer must have been in an employment relationship with eligible employees as of 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
- Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.
Compliance requirements for employers in relation to the turnover test
To establish that a business has faced either a 30 (or 50) per cent fall in their turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or three months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier.
The Tax Commissioner will have discretion to consider additional information that the business can provide to establish that they have been significantly affected by the impacts of the Coronavirus in the following situations:
- Where a business was not in operation a year earlier, or
- where their turnover a year earlier was not representative of their usual or average turnover, (e.g. because there was a large interim acquisition, they were newly established, or their turnover is typically highly variable)
The Tax Commissioner will also have discretion to set out alternative tests that would establish eligibility in specific circumstances
- (e.g. eligibility may be established as soon as a business has ceased or
- significantly curtailed its operations).
- There will be some tolerance where employers, in good faith, estimate a greater than 30 (or 50) per cent fall in turnover but experience a slightly smaller fall.
Eligibility criteria for employees
Eligible employees are employees who:
- are currently employed by the eligible employer (including those stood down or re-hired);
- were employed by the employer on 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 of 1 March 2020);
- are at least 16 years of age;
- are 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; and
- are not in receipt of a JobKeeper Payment from another employer.
If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.
Obligations on employers
To receive the JobKeeper Payment, employers must:
- Register an intention to apply on the ATO website and assess that they have or will experience the required turnover decline.
- Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). 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 employees that were already receiving this amount from the employer they will continue to receive their regular income according to their prevailing workplace arrangements.
- For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500 per fortnight, before tax. And 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
Obligations on employees
Employees will receive a notification from their employer that they are receiving the JobKeeper Payment. The majority of employees will need to do nothing further.
Employees in the following circumstances will have additional obligations.
- Employees that have multiple employers must notify the employer that is their primary employer.
- Employees that are not Australian citizens must notify their employer of their visa status, to allow their employer to determine if they are an eligible employee.
- Employees that are currently in receipt of, or have applied for, an income support payment should advise Services Australia of their change in circumstances online at www.my.gov.au or by telephone.
Businesses with employees
Initially, employers can register their interest in applying for the JobKeeper Payment via www.ato.gov.au from 30 March 2020.
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.
Businesses without employees
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via www.ato.gov.au from 30 March 2020.
Initially, 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.
Subsequently, 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.
The subsidy will start on 30 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 30 March 2020 on the ATO website.
Please refer to the factsheets below for further details:
Parliament will need to be recalled in order to pass this legislation. We will release further details on our blog once available.
For further details in relation to stimulus packages please refer our blog or contact us on (03) 9069 7700.