We have had numerous emails and phone calls over the last few days in relation to JobKeeper and eligibility. Whilst the Government could have been more imaginative and less confusing by naming it something totally different to that of JobSeeker, they didn't and confusion between the two will continue.
Apart from the name, from our opinion, the scheme has been a wonderful initiative from the Government and will both lower the strain on Services Australia (Centrelink) and also keep employees attached to your business for when the COVID-19 pandemic finally leaves our shores. Business will recover and having employee already there, will mean lower onboarding costs for the business.
With the scheme passing government last night, we will give you the information we have now. Please be aware, this is very new, and changes may still occur prior to JobKeeper becoming law.
What is JobKeeper
As described by the Australian Taxation Office, the JobKeeper payment is intended to provide wage subsidies to businesses that are significantly affected by COVID-19. This assistance will help businesses to keep people in their jobs and re-start when the crisis is over.
Eligibility Criteria - Business
Employers must meet the following to be eligible for the subsidy:
- The business has a turnover of less than $1 billion and their turnover has fallen by more than 30 per cent (of at least a month); or
- The business has a turnover of $1 billion or more and their turnover has fallen by more than 50 per cent (of at least a month); and
- The business is not subject to the Major Bank Levy.
While we are still awaiting actual clarification on how we which period we are comparing with, it is expected that the government will use year on year to determine the fall in turnover. Where a business was not operating 12 months ago and/or the turnover of 12 months ago is not representative of their usual or average turnover, the Tax commissioner will have the discretion to consider additional information from the business that can prove they have been significantly impacted by COVID-19.
Eligibility Criteria - Employee
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
- are not in receipt of a JobKeeper Payment from another employer
What if Employees are receiving multiple payments
Employees are not allowed to receive multiple JobKeeper payments from different employers and they are not allowed to be receiving both JobKeeper and any other government benefit. While it is not the employers responsibility to ensure that the employee is not breaking the rules, it is advised that you notify your employees of the fact they will be signed up to JobKeeper and the expectation of this scheme is not to claim multiple times. We have included a link below of a pamphlet to provide to your employees outlining the details.
Please note, it is expected that should the employee claim multiple benefits, the employer will not be penalised in anyway.
Payments to Employees
Eligible employers will be paid $1500 per fortnight per eligible employee. This is the minimum amount before tax that an employee will receive. 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 current hours worked and normal wage rates. The JobKeeper Payment will assist their employer to continue operating by subsidising the income of their employees.
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.
Please note, it is up to the employer if they want to pay superannuation on any additional wage paid because of JobKeeper Payment.
Payment of Subsidy to Business
Payments will be made to the employer monthly in arrears by the Australian Taxation Office. Understandably, a large number of businesses currently cannot afford to cover the cost of wages for a month, prior to being refunded the subsidy. As advised in our previous emails regarding the COVID-19 Stimulus Package, the Government is providing unsecured loans of up to $250,000 for businesses to help with cashflow. If I am honest with you, after researching this this afternoon, I haven’t been able to find much online regarding accessing this. Our advice would be to speak to you bank about these loans, they may be able to provide more advice on this. We were advised on Friday by the Institute of Certified Bookkeepers that Former Queensland Premier and now Australian Banking Association CEO Anna Bligh, is currently working with the banks to finalise these loans as soon as possible.
When does it start?
The subsidy started on the 30 March 2020, however, the first payment to employers will not be received until the first week of May.
How to Apply
At this point you cannot apply for the JobKeeper Payment., but you can register your interest in applying. This will provide you updates on the JobKeeper scheme. Once the scheme has past parliament, our understanding is, application links will be provided to everyone registered, allowing them to apply for the scheme.
What to do now
It is our belief that everyone who’s business has been significantly affected by COVID-19 apply using the link below. At the very least, this will keep you up to date on what is happening with the scheme. As we get more information, we will be able to provide you with advice on whether you are potentially eligible.
https://www.ato.gov.au/Job-keeper-payment/
Once again, we understand how overwhelming all this information can be. Whilst it is a very nervous time for everyone, especially business owners, the only advice we think is important currently is to be patient. This is a every changing landscape, and information provided today can change or be further enhanced tomorrow. The government is doing a great job of getting the information out there, but until the bills have passed government, they are still just words.
Please stay safe and let us know if you need anything.
