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The JobKeeper Payment

The Federal Government has announced (as the third instalment of its Coronavirus Stimulus Package) the introduction of the JobKeeper Payment to assist eligible businesses and the self-employed that have been impacted by the Coronavirus Pandemic to continue to pay their employees.

The following will cover the key features of the proposed payment (based on the information currently available).

1. What is the JobKeeper Payment?

The JobKeeper payment is a subsidy that will be paid to eligible employers and self-employed individuals that have been impacted financially by the Coronavirus.

Eligible businesses will be able to claim a subsidy of $1,500 per eligible employee, per fortnight.

The payment will be made by the ATO (commencing early May 2020) and will be paid in arrears from 30 March 2020 for a maximum period of 6 months.

2. When is a business eligible for the payment?

Employers and the self-employed are eligible where:

• A business with turnover of less than $1 billion is experiencing a 30% decrease in revenue compared to the same period (of at least one month) in the prior year.
• The business is not subject to the Major Bank Levy

3. When can the payment be claimed?

An eligible employer can claim the JobKeeper Payment in respect of an eligible employee. For an employee to be considered eligible, they must meet the following requirements:

• The employee must be currently employed by the business (including employees that have been stood down and/or re-hired)
• The employee was employed by the business at 1 March 2020
• The employee is full-time, part-time or a long-term casual employee that has been employed by the business for 12 months or more at 1 March 2020.
• The employee is at least 16 years of age
• The employee is an Australian Citizen or permanent visa holder
• The employee is not in receipt of the payment from another employer

Employees with multiple employers will need to contact their primary employer to claim the JobKeeper payment on their behalf.

4. How does a business apply for the payment?

You can currently register your interest in applying for the payment at https://www.ato.gov.au/Job-keeper-payment/.

Eligible employers that apply for the payment will soon need to provide supporting evidence for their downturn in revenue and report the number of eligible employees on a monthly basis.

Self-employed individuals will need to provide an ABN and nominated individuals Tax File Number as well as a declaration of recent business activity to provide evidence of downturn in revenue. This will also need to be submitted on a monthly basis.

5. How is the payment to be used by the business?

The purpose of the payment is to ensure eligible workers are paid a minimum of $1,500 (gross) per fortnight. If eligibility criteria are met, the payment will be received by the employee based on the following scenarios:

• If the employee ordinarily receives at least $1,500 per fortnight, they will continue to receive their regular income. In this case, the payment will effectively subsidise part of that employee’s income.
• If the employee ordinarily receives less than $1,500 per fortnight, the employer must pay the employee the total minimum $1,500 per fortnight.
• If an employee has been stood down, the employer must pay the employee the total minimum $1,500 per fortnight.
• If an employee was employed on 1 March 2020, their employment was since terminated and employment has now been reinstated (with the same employer), the business must pay the employee the total minimum $1,500 per fortnight.

As this information is rapidly changing and evolving, we encourage you to reach out to us if you have any queries or concerns regarding this or any other stimulus package or tax matter.

Please know that we are committed to getting accurate information to you as quickly as possible to assist you in any personal or business decisions you may need to make in the coming weeks.

As the legislation changes, we will keep you updated but please know that we are here for you. If you have any questions, please do not hesitate to contact us on (02) 4934 4260.