JobKeeper: a little light at the end of the tunnel

The JobKeeper Payment is a temporary scheme available to businesses impacted by the coronavirus outbreak. Under the Jobkeeper Payment, the Australian Government will provide a fortnightly payment of $1,500 per eligible employee until 27 September 2020.

For employees, this means they can keep their job and earn an income – even if their hours have been cut.

Eligible employers

Employers will be eligible for the subsidy if, at the time of applying:

• their business has a aggregated turnover of less than $1 billion (for income tax purposes) and they estimate their turnover has fallen by more than 30 per cent or more; or
• their business has an annual turnover of $1 billion or more (for income tax purposes) and they estimate their turnover has fallen or will likely fall by more than 50 per cent; and
• the business is not subject to the Major Bank Levy.

The employer must have been in an employment relationship with eligible employees as at 1 March 2020, and can confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.

Self-employed individuals will  also be eligible to receive the JobKeeper Payment where they meet the relevant turnover test outlined above, and are not a permanent employee of another employer.

Eligible employees

Eligible employees are employees who:

• 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)
• 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
• a resident for Australian tax purposes on March 2020
• are not in receipt of a JobKeeper Payment from another employer

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 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.
• If an employee would otherwise receive 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.

No superannuation guarantee payments are required to be paid on any additional payment made because of the JobKeeper Payment.

Payments will be made to the employer monthly in arrears by the ATO. For the month of April, the Commissioner can make an advance payment.

Timing

The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May. Businesses will be able to register their interest in participating in the Payment from 30 March 2020 on the ATO website.

Treasury Department has released factsheets on the JobKeeper Payment scheme for employers and employees. The employer factsheet contains information on the application process through the Australian Taxation Office (ATO).

Things are all over the shop at the moment; for both employers and employees. Whether you’re considering downsizing, changing a team member’s employment status or looking for ways to get the best from employees working from home, Bare Bones Consulting offers you the reassurance you’ll get things right. Call us today for a no obligation chat on how we can help you. Phone phobia?  Shoot us an email through our “Contact us” page.

That’s one less thing for you to worry about.