The Federal Government has announced the introduction of a new JobKeeper Stimulus Payment to assist eligible employers and the self-employed who have been impacted by the Coronavirus pandemic.
Based on the information available to us since the Media Release dated 30 March 2020 and the information that is currently available on the Treasury website the Government intends to
Introduce legislation into Parliament to give effect to the JobKeeper Payment measure as soon as possible.
The Government also announced that the partner income test will be relaxed to ensure a person can receive Jobseeker Payment where their partner earns less than $3,068 per fortnight ($79,762 per annum).
1. What is the JobKeeper Payment?
The JobKeeper payment is a subsidy to be paid through the tax system (i.e. By applying to
the ATO) to employers and self-employed impacted by the Coronavirus.
Eligible employers will be able to claim a subsidy of $1,500 per fortnight, per eligible employee,
from 30 March 2020, commencing from the first week of May 2020, for six months and will be paid monthly in arrears. Eligible employees will receive a gross payment before tax of at least $1,500 p.f.
Self-employed individuals including businesses without employees can also qualify to receive the
2. When is an employer or business eligible for the JobKeeper Payment?
Employers will be eligible for the JobKeeper subsidy where:
• Business with a turnover of less than $1 billion – its turnover reduced by more
than 30% relative to a comparable period a year ago (of at least a month); or
• Business with a turnover of $1 billion or more – its turnover will be reduced by more than
50% relative to a comparable period a year ago (of at least a month); and
• Business is not subject to the Major Bank Levy.
Self-employed individuals which are businesses without employees and not-for-profit entities that satisfy the above requirements will be eligible to apply for the JobKeeper Payment.
3. When can the JobKeeper Payment be claimed in respect of an employee?
Before an eligible employer can claim the JobKeeper payment in respect of an employee the employee must satisfy the following requirements:
• Employee is currently employed by the employer (which includes an employee who has
been stood down or re-hired after they had already lost their job).
• Employee was employed by the employer as at 1 March 2020.
• The employee is a full-time or part-time employee, or a long-term casual employee who has
been employed by the employer on a regular basis for longer than 12 months at 1 March 2020.
• Employee is at least 16 years of age.
• Employee is an Australian citizen, or 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 Visa Holder.
• Employee is not in receipt of a JobKeeper Payment from another employer.
So this means that eligible employers will receive the JobKeeper Payment for each
eligible employee who was on the employer’s books on 1 March 2020 and continues to be engaged
by that employer (including full-time, part-time, long-term casuals and stood down employees).
Unfortunately employees who have multiple employers will need to notify their primary employer to claim the JobKeeper Payment on their behalf, as only one employer will be eligible to receive the payment.
In most cases, the claiming of the tax-free threshold will be sufficient notification that an employer
is the employee’s primary employer.
4. How does a business apply for the JobKeeper Payment?
Initially, businesses can start to register their interest in applying for the JobKeeper payment from
30 March 2020, on the ATO’s website at www.ato.gov.au. The first payments under this measure
are expected to be made to an eligible business from the first week of May 2020.
Eligible employers that apply for the JobKeeper Payment will need to provide supporting information demonstrating a downturn in their business, and must report the number of eligible employees employed by the business on a monthly basis.
Businesses without employees will need 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 (presumably, to demonstrate the downturn in the business). These businesses will also need to provide a monthly update to the ATO in order to declare their continued eligibility for the JobKeeper Payment. It is expected that more information will be provided about applying for the JobKeeper Payment, for businesses with employees and for the self-employed, on the ATO’s website.
5. How is the JobKeeper payment applied by an eligible business?
The underlying purpose of the JobKeeper Payment is to ensure that eligible workers (including
eligible employees) are paid a gross minimum amount of $1,500 per fortnight. In particular, for
eligible employers who receive the JobKeeper Payment for an eligible employee, the employee will
receive this payment basically as follows:
(a) If the employee ordinarily receives at least $1,500 in gross salary income per fortnight, they
will continue to receive their regular income according to their prevailing workplace
arrangements. In this case, the JobKeeper Payment will effectively subsidise part or all of the
employee’s gross fortnightly salary income.
(b) If the employee ordinarily receives less than $1,500 in gross salary income per fortnight,
their employer must pay the employee a minimum gross fortnightly salary income of $1,500
under the JobKeeper Payment scheme.
(c) If an employee has been stood down, their employer must pay the employee a minimum
gross fortnightly salary income of $1,500 under the JobKeeper Payment scheme.
(d) 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.
An eligible employer receiving the JobKeeper Payment in respect of one or more employees will
be required to notify each employee that they have been nominated as eligible employees for the
employer to receive the payment. Furthermore, an eligible employer has the option of choosing
whether or not to provide superannuation guarantee support in respect of any additional salary
income (to the extent that it relates to the JobKeeper Payment) paid to an eligible employee by an
employer. Where an employer receives the JobKeeper Payment for an eligible employee who has been receiving income support through Centrelink (or Services Australia) as a result of having been stood down or their hours being reduced, the employee will need to report the JobKeeper Payment as income, as this could affect their entitlement to such Centrelink support.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.