On 30 March 2020 the Federal Government announced the $130 billion 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.
The JobKeeper payment will be administered by the ATO, and will be paid to businesses that have experienced a downturn of more than 30% (50% for businesses over $1bn).
Affected employers will be able to claim a fortnightly subsidy payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months. This full amount of $1,500 must then be paid to all eligible employees, whether they are full time, part time or casuals.
The first payments will be made from the ATO on 1 May 2020.
The business will continue to receive the subsidy payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the business.
Eligibility – Employers
Employers will be eligible for the subsidy if their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month). There are a few other requirements for larger businesses.
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. 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.
Sole traders and the self-employed with an ABN, and not-for-profits (including charities) that meet the turnover tests are eligible for the JobKeeper payment.
Eligibility – Employees
Employees eligible for JobKeeper payments are those who:
- Were employed by the relevant employer at 1 March 2020;
- Are currently employed by the employer (including those who have been stood down or re-hired);
- Are full time, part-time, or long term casuals (a casual employee employed on a regular basis for 12 months as at 1 March);
- Are at least 16 years of age;
- Are an Australian citizen, hold a permanent visa, are 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.
Businesses, both with employees and without employees (sole traders) can register their interest in applying for the JobKeeper payment with the ATO at https://www.ato.gov.au/Job-keeper-payment/
At a later date, 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 will need to provide an ABN for their business, nominate an individual to receive the payment, 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.
The Legislation hasn’t yet been released. We will keep you informed as we learn more information from the Government and the ATO.
Please note that your business will have to keep paying your employees between now and 1 May 2020 out of your cashflow, and on 1 May 2020 if you are eligible for JobKeeper payments, the ATO will then reimburse you $1,500 per eligible employee per fortnight dated from 30 March 2020.
Contact the team at Wilson Pateras TODAY so we can assist you with the registration process, application process and the calculations.
We look forward to hearing from you soon.
From all the Team at Wilson Pateras