The Federal Government recently announced a new JobKeeper payment which will be made available to eligible businesses to assist in dealing with the impact of the COVID-19 crisis. The aim of the payment is to allow eligible businesses to more easily afford to pay wages of eligible employees, for up to 6 months, potentially saving many people from losing their jobs.
Affected employers will be able to claim a payment of $1,500 per fortnight per eligible employee from 30 March 2020, for up to 6 months.
To be eligible for the JobKeeper payment, an employer needs to satisfy the following:
- The business has a turnover of less than $1 billion and turnover has fallen by more than 30% (for at least one month); or
- The business has a turnover of greater than $1 billion and turnover has fallen by more than 50% (for at least one month); and
- The business is not subject to the Major Bank Levy.
Businesses will need to provide proof that they have faced either a 30% or 50% drop in turnover, depending on the size of the business, as compared to turnover a year earlier.
Should the business not have been in operation a year earlier, or if turnover a year earlier was not reflective of usual turnover, then the Tax Commissioner at the ATO will have discretion to consider whether the business is eligible to receive the JobKeeper payment.
Eligible employees must have been employed as at 1 March 2020 and as part of ongoing reporting requirements, the employer must provide evidence that the eligible employee(s) remains employed, in order to continue to receive payments under the scheme.
There are separate rules relating to not-for-profit entities or self-employed individuals, which allow them to claim the JobKeeper payment.
Eligible employees are employees that:
- Are currently employed by the eligible employer. This includes those employees who are currently stood down, or those who have been re-hired in an alternate role;
- Were employed as at 1 March 2020;
- Are employed on a full-time, part-time or long-term casual basis;
- A long-term casual employee is a casual employee who has been 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, holder of a permanent visa, a Protected Special Category Visa holder, a non-protected Special Category Visa Holder who has been residing 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.
The JobKeeper Payment
Eligible employers will receive $1,500 per fortnight for each eligible employee to subsidise the salary of the eligible employee(s) and may subsidise all or part of an eligible employee’s income, depending on their level of income.
An employer must pay the eligible employee $1,500 per fortnight before tax, at a minimum if:
- The eligible employee has been stood down;
- The eligible employee ordinarily receives less than $1,500 in income before tax per fortnight; or
- If the employee was employed as at 1 March 2020, then ceased employment but was re-engaged by the same eligible employer.
Where an eligible employee ordinarily receives more than $1,500 in income before tax per fortnight, the $1,500 JobKeeper payment can be used by the eligible employer to subsidise the eligible employee’s regular salary eg: if your eligible employee ordinarily earns $2,850 per fortnight before tax, the JobKeeper payment can subsidise this payment, leaving the eligible employer to cover the remaining $1,350 per fortnight.
The ATO has announced that it will make payment to the employer monthly in arrears, of all JobKeeper payments the employer is entitled to receive.
For more information, including being able to sign up for updates as to the JobKeeper scheme, check out https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper
If you have any questions regarding this guide, please do not hesitate to contact us to see how we can help.
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Nothing in this article should be relied on as legal advice. The contents of this article should be regarded as general information only, and for specific legal matters, independent advice should always be sought