As part of its Coronavirus Stimulus Package, the Federal Government has recently announced the introduction of a new JobKeeper Payment to assist eligible employers, (and self-employed individuals), who have been impacted by the Coronavirus pandemic to continue to pay their workers.
What is the JobKeeper Payment?
The JobKeeper payment is designed to assist employers to continue to pay their workers. Eligible employers will be able to claim a subsidy of $1,500 per fortnight before tax, per eligible employee, for up to 6 months. The eligible period began on 30 March, with the payments to commence from the 1st week of May. This subsidy will be paid by the ATO monthly in arrears and will ensure that an eligible employee receives a gross payment of at least $1,500 per fortnight.
Am I eligible for the JobKeeper Payment?
Employers will be eligible for the JobKeeper subsidy where their turnover has reduced or will be reduced by more than 30% relative to a comparable period a year ago (of at least a month). This is for businesses with a turnover of less than $1 billion.
Self-employed individuals (i.e., sole traders & contractors) are also eligible to apply for the JobKeeper Payment. At this stage, we are awaiting further clarification regarding partnerships and trusts, where the business is not an employer.
In addition, the employee for which the subsidy is being received, must have been employed by the employer as at the 1st March. But note, this includes employees that have been stood down, and those that have been re-hired after they had already lost their job. So this is a great opportunity for employers that did not want to terminate any employees, but for cash flow reasons had to, you can re-employ and receive the subsidy. The employee can be a full-time or part-time employee, or a long-term casual employee who has (employed on a regular basis for longer than 12 months at 1 March. Bear in mind too, that the employee must be at least 16 years old, be an Australia Citizen or hold a permanent visa and not in receipt of the JobKeeper payment from another employer.
How do I apply?
You will need to register your interest in applying for the JobKeeper payment on the ATO website. You will need to provide supporting information demonstrating a downturn in your business and you must report the number of eligible employees employed by the business on a monthly basis.
Businesses without employees (e.g., self-employed individuals) will need to provide an ABN for the business, nominate an individual to receive the JobKeeper payment and provide that individual’s
Tax File Number, as well as provide a declaration on the recent business activity to demonstrate the downturn in the business.
How will it work?
The underlying purpose of the JobKeeper Payment is to ensure that eligible workers are paid a gross minimum amount of $1,500 per fortnight.
There are 4 main examples to consider here:
- If the employee ordinarily receives at least $1,500 in gross wages per fortnight, they will continue to receive their regular income. So in this case, the JobKeeper Payment will effectively subsidise part of the employee’s gross fortnightly income.
- If the employee ordinarily receives less than $1,500 in gross wages per fortnight, their employer must pay the employee a minimum gross fortnightly income of $1,500 under the JobKeeper Payment scheme.
- If an employee has been stood down, the employer must pay the employee a minimum gross fortnightly ncome of $1,500.
- If an employee was employed on 1 March 2020, has subsequently ceased employment with their employer, and then has been re-engaged by the same employer, the employee will receive a minimum gross fortnightly salary of $1,500 under the JobKeeper payment scheme.
In summary, if your turnover has reduced or will be reduced by more than 30% relative to a comparable period a year ago (of at least a month) and you employ eligible employees, jump onto the ATO website and begin the application process for the JobKeeper subsidy. If you have any questions, or need any further clarification or assistance in the application process, please let us know