The JobKeeper Payment
written by Darren Hagarty
On 30 March 2020, the Federal Government unveiled their latest economic response to the Coronavirus, a $130-billion government wage subsidy known as the JobKeeper Payment.
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a 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 period of 6 months.
Employers with a turnover of less than $1 billion will be eligible if their turnover has fallen by more than 30%.
According to information on the Treasury website, to establish that a business has faced a 30% 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.
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 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.
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% fall in turnover but actually experience a slightly smaller fall.
The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
Eligible employees are employees who:
• 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 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 employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.
Employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020. Click here for a direct link to the registration page.
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.
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, such as the self-employed, can also be eligible and should also register their interest in applying for JobKeeper using the above link.
Further Information to Come
When the JobKeeper Payment progresses to parliament, there will be a Bill and accompanying Explanatory Memorandum. These documents will provide further information on the finer details of the scheme.
Darren Hagarty is a Director of PT Partners
Image credits: typsy.com