As you may be aware, the Federal Government announced this week, a wage subsidy for businesses impacted by COVID-19. The subsidy, known as the JobKeeper Payment, will be a payment made by the Government to businesses who have suffered a significant downturn in income (as a result of COVID-19) to help them retain employees. Key details of the scheme are detailed below:
Key requirements for a business to qualify for the JobKeeper Payment are outlined below (please note these criteria apply to businesses with a turnover of under $1b – we are confident this covers most who are reading this newsletter!):
- Employers will be eligible for the subsidy if 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.
We are unsure at this stage how the 30% reduction in turnover will be assessed. Examples on the Government website (link below) make reference to businesses who are expecting a downturn. We will provide more information as it comes to hand.
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; and
- are not in receipt of a JobKeeper Payment from another employer.
Employers will be paid $1,500 per fortnight per eligible employee. Specific requirements are 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.
Employers are able to decide if they want to pay Superannuation Guarantee on any additional wage paid as a result of the JobKeeper Payment.
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.
How To Apply
The ATO will shortly launch an online application process. In the meantime, eligible employers can register their interest at the following link:
Business Without Employees (including Sole Traders)
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 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.
These businesses can also register their interest in the scheme using the following link:
If you would like additional information in relation to any of the COVID-19 Government Support Programs (including this one), please do not hesitate to contact one of our team.