COVID-19 Government Stimulus – JobKeeper Update

JobKeeper Summary

The JobKeeper Payment is a temporary scheme open to businesses impacted by the Coronavirus. It is designed to help businesses cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.

The JobKeeper Payment will also be available to the self-employed. The Government will provide $1,500 per fortnight per employee for up to 6 months.

EMPLOYER ELIGIBILITY

• 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).
  • 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.
  • Employers must elect to participate in the scheme. You will need to make an application to the Australian Taxation Office (ATO) and provide supporting information demonstrating a downturn in their business. In addition, employers must report the number of eligible employees employed by the business on a monthly basis.

EMPLOYEE ELIGIBILITY

• 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 – includes apprentices)
• 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
• Are not in receipt of a JobKeeper Payment from another employer.
• Employees in the following circumstances will have additional obligations:
  • Employees that have multiple employers must notify the employer that is their primary employer.
  • Employees that are not Australian citizens must notify their employer of their visa status, to allow their employer to determine if they are an eligible employee.
  • Employees that are currently in receipt of an income support payment must notify Services Australia of their new income.

APPLICATION PROCESS

Businesses with employees

• Initially, employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020.
• Subsequently, eligible employers will be able to apply for the scheme in 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.
• If you re-employ employees that were let go or stood down and they continue to be employed post the six month legislated support period, FairWork minimum rules (or your existing industry agreements/contracts) will apply to the ongoing employment.

Businesses without employees 

• Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via ato.gov.au from 30 March 2020.
• Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and 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.

PAYMENT PROCESS

• Eligible employers will be paid $1,500 per fortnight per eligible employee.
• Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.
• Where employers participate in the scheme, their employees will receive this payment as follows:
  • If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
  • If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee 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. Payments will be made to the employer monthly in arrears by the ATO.

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