The $1,500 per fortnight per employee payment applies to most businesses with a turnover reduction of 30%, with payments commencing May 2020.
As the effects of COVID-19 start to hit businesses across the country, the federal government has stepped up its economic stimulus to include $130 billion in ‘JobKeeper Payments’ to support business cash flow and assist with employee retention. The new ‘Jobkeeper Payment’ is a wage subsidy paid to eligible businesses of $1,500 per fortnight for each eligible employee they continue to pay from 30 March 2020 for up to six months with the first payments set to be made in the first week of May.
Who is an eligible business for JobKeeper?
An eligible business is one that:
- is an employer or someone self-employed (i.e. a business without employees),
- has seen a reduction in turnover from a comparable period a year ago (of at least one month) of:
- 30% where their annual turnover is less than $1 billion
- 50% where their annual turnover is greater than $1 billion
- have eligible employee(s) with an employment relationship with the business as at 1 March 2020.
Who is an eligible employee?
An eligible employee must be:
- employed as at 1 March 2020 and either remain employed, or re-hired in the event of being laid off or stood down;
- a full-time or part-time employee or have been a long-term consistent casual for longer than 12 months as at 1 March 2020;
- at least 16 years of age;
- an Australian citizen or the holder of a permanent visa, Protected Special Category Visa, a non-protected Special Category Visa who has resided in Australia for a continuous period of 10 years or more, or a Special Category (Subclass 444) Visa Holder;
- not receiving the Jobkeeper Payment from another employer.
How to apply and what do I need to report?
Eligible businesses are required to register their intention to apply for the Jobkeeper Payments through the ATO website and have assessed that they have or will experience the required decline in turnover as a result of the Coronavirus pandemic. Additionally, businesses will be required to:
- Provide information on the number of employees as at 1 March 2020 and the number of current employees;
- Ensure that employees for which they intend to claim the Jobkeeper Payments for are paid a minimum of $1,500 gross per fortnight;
- Notify the eligible employees that they are receiving the JobKeeper payment;
- Provide monthly updates to the ATO confirming the number of eligible employees currently employed.
Self-employed businesses will be required to:
- Provide their ABN;
- nominate the individual (i.e. the self-employed person) who is to receive the payments and provide their TFN;
- provide a declaration depicting recent business activity.
In the event an employer increases the wage of an employee to meet the $1,500 requirement, the top-up amount required is not subject to Super Guarantee and is instead an optional extra employers can choose to pay.
What do employees need to do?
For most employees, there will be no action needed; however, employees with multiple employers, non-Australian citizens or those who are receiving income support payments will be required to do the following:
- notify their employers whether they are their primary employer, as only one employer can receive the wage subsidy;
- notify the employer of their visa status, allowing a decision to be made on eligibility;
- notify Services Australia of their new income type as existing income support payments will be affected.
For more information
Please refer to the following Treasury department fact sheets for more information, including examples of how ‘JobKeeper’ will apply:
For employers: JobKeeper Payment - Information for Employers
For employees: JobKeeper Payment - Information for employees
Lastly, the above information is subject to change as the JobKeeper Payment needs to be legislated in order to implemented. The federal government has sought to fast track legislation and we expect final details and legislation to be available by no later than the end of next week.
If you have any questions regarding JobKeeper and how it applies to you, please do not hesitate to contact your Altitude Adviser. We are here to help.