March 31, 2020.
JobKeeper Allowance – Government announces measures to help employers retain staff
On 30 March, the Government announced a $130 billion package, including the JobKeeper Payment to help keep Australians in jobs as the nation deals with the significant economic impacts from the COVID19.
Under the JobKeeper Payment, businesses significantly impacted by the COVID19 outbreak will be able to access a subsidy from the Government to continue paying their employees.
The Government will provide $1,500 per fortnight per employee for up to 6 months.
The Government is attempting to encourage employers to keep employees on the books.
With the effects and length of the COVID19 pandemic expanding, governments around the world have announced strict measures to slow the spread of the virus. Economic impacts from limits on movement and travel means many businesses have been forced to close and let go of employees.
What is the JobKeeper Payment
- Businesses who have experienced a reduction in turnover greater than 30%, relative to a comparial period of at least 12 months ago, with a turnover of up to $1bn, can access a fortnightly subsidy of up to $1500 for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that employer.
- Eligible employees are at least 16 years old and are those who work full time, permanent part time or casuals who have worked with the business for over 12 months.
- Employees must be an Australian citizen, holder of a permanent visa and some further visa holders outlined here: Employees fact sheet
- Employees who were stood down are covered. Employees that have been terminated can be re-hired. Employees that are re-engaged by a business that was their employer on 1 March 2020 will be eligible.
- Self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered or expect to suffer a 30 per cent decline in turnover relative to a comparable period a year ago (of at least a month).
- The subsidy dates to 30 March 2020 and will last for a maximum of six months.
- It does not include superannuation.
You can read the most accurate information directly from the government here. Continue to stay up to date with the Government’s mobile app. Just search ‘Coronavirus App’ on your app store.
As an employer, the Government says you register to apply through the ATO website, who will then assess whether you have or will experience the required 30% decline in turnover.
Information for employers:
- Businesses can register their intention to claim on the ATO website.
- They will need to make an application to the 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.
- Businesses must provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired).
- For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
- Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.
- Businesses must notify all eligible employees that they are receiving the JobKeeper Payment.
- Continue to provide information to the ATO on a monthly basis. The details of this reporting mechanism are yet to be ironed out.
Self-employed business owners can register for the JobKeeper Payment online at the ato.gov.au. You will need to provide:
- An ABN for your business
- Nominate who will receive the payment and provide the Tax File Number of that person
- The ATO will require a declaration of your recent business activity and ongoing monthly updates so as to remain eligible for the payments.
- Payments will be made by the ATO monthly into the individuals bank account.
The Government has a detailed information sheet for sole traders on measures currently available to them, here.
What we know:
- The first payment from the Government will start in May and will be delivered by the ATO to the bank account you receive your BAS refunds to.
- Employees can only receive JobKeeper from one employer. This means employees cannot claim JobSeeker while on JobKeeper.
- Employees must still receive their superannuation paid on the normal wage if they have not been stood down. The employer is then to decide whether to pay additional superannuation on the JobKeeper top up. For example, if you continue to pay John his regular wage of $1000 dollars a fortnight plus superannuation, assuming you pass all of the eligibility criteria, John can now receive the $1500 JobKeeper payment, with superannuation paid on the normal $1000 wage and you can decide whether to pay additional superannuation on the last $500.
Advice from Mark Bouris:
Mark says that the six month scheme is a great move from the Government. “We need to be thinking about employers who keep employees on during this period. It’s absolutely essential.”
Mark said that the most important questions surrounding the package right now is whether it is “enough to keep employers enthusiastic enough to continue to pay their employees to keep the business afloat?”
“This measure is about employers keeping employees on the books at a baseline of $1500 a fortnight.”
“Now the employer might choose to pay them more. That’s okay. They can do that.”
“But there is a baseline for employees. They know that if they stay in this business, or attached to this business, even if they’re working from home or not working at all, just staying attached to this business, they will get $1500 a fortnight.”
“The employee won’t have to go to the local Centrelink to line up. They’re getting paid through the employer. The employer will get that money on May 1st.”
“The reason for that is that the subsidy starts May 1st, backdated to now, because it is attached to the statements employers put in, in late April, about the employees they employ. In other words they put in their BAS statements, their PAYG statements in April.”