As announced yesterday the Government has stepped up to the plate to announce a further major incentive to assist businesses to retain workers and, in turn, assist those workers to eat and pay the mortgage! Known as JobKeeper Payment, the key points for employers are as follows:
Timing (subject to eligibility)
- Commencing 30 March (yesterday!).
- Businesses can register their interest with the ATO now (see further below).
- First payments to be received by employers in the first week of May.
What is available (subject to eligibility)
- $1,500 per fortnight gross per ‘eligible’ employee for up to 6 months.
- For each employee that was on their books on 1 March 2020 and continues to be engaged by that employer, including full-time, part-time, long-term casuals and stood-down employees. Eligible casual employees are those who have been with their employer on a regular basis for at least the previous 12 months as at 1 March 2020 (ie employed before 1 March 2019 and regularly engaged).
- To be eligible, an employee must be 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 continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder.
- Eligible employers who have stood down their employees before the commencement of the scheme will be able to participate and employees re-engaged by a business that was their employer on 1 March 2020 will also be eligible.
- Self-employed individuals will be eligible where they have suffered or expect to suffer a 30% decline in turnover relative to a comparable prior period (at least a month).
- Where employees have multiple employers only one employer will be eligible to receive the payment.
It is very important to note that, unlike some of the earlier measures, not all businesses will qualify for the JobKeeper Payment. In order to do so the following has to happen:
- The business or self-employed individual needs to demonstrate that business turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month);
- The business must elect to participate in the scheme by making an application to the ATO and providing supporting information demonstrating the downturn in business;
- The business must continue to report the number of eligible employees employed by the business on an monthly basis.
What employers need to do with the payments
- Eligible employers will receive the JobKeeper payments of $1,500 per fortnight per employee from the Government on behalf of their eligible employees. It is essentially a subsidy to allow employers to retain and pay staff.
- Employers can top-up the payment (for example, to cover the usual salary of the employee) but must pass on at least the full amount of the Jobkeeper payment, even if the employee ordinarily receives less than $1,500 per fortnight.
- If an employee ordinarily receives $1,500 or more per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements.
- If an employee has been stood down, the employer must pay at least the minimum $1,500 per fortnight before tax.
- PAYG Withholding will need to be deducted from the payment to the employee in the normal way.
You can access the Treasury Fact sheet here which contains some additional content and worked examples.
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