The government has released details of its $130bn wage subsidy scheme, the JobKeeper Payment. It is the third in a series of economic stimulus designed to help people keep their jobs while businesses go into “hibernation”.
Australian Government Coronavirus stimulus: Jobkeeper Payment. Instead of Centrelink, it will be businesses that administer the payment and act as the paymasters, helping employers and employees maintain contact for when the economy gets back on track. Eligible employers must apply with the ATO, and if approved, will be able to receive $1,500 per fortnight per eligible employee for up to 6 months.
In this latest round of Coronavirus stimulus, the government has bought out the big guns in an effort to help people keep their jobs amidst the economic downturn. The “JobKeeper Payment” is a part of a $130bn wage subsidy scheme that is designed to provide a fortnightly payment of $1,500 per employee. This payment should not be confused with the similarly named JobSeeker payment which was announced in round 2 and can be claimed through Services Australia (Centrelink).
This new payment will be paid to employers, for up to 6 months for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by the employer. Where a business has stood down employees since 1 March, the payment is designed to help the employer maintain a connection with their employees while providing the equivalent of around 70% of the national median wage.
For workers in the accommodation, hospitality and retail sectors, the payment is expected to equate to a full median replacement wage.
Eligible employers include business structured through companies, partnerships, trusts, sole traders, and not-for-profits (including charities). Businesses with a turnover of less than $1bn must show that their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month) to be eligible for the payment. Businesses with a turnover of $1bn or more need to demonstrate that their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month).
Employees that will be eligible for the payment are full-time and part-time employees, including stood down employees, self-employed individuals, and casual employees that have been with their employer for at least the previous 12 months. The eligible employee will also need to be either Australia residents, NZ citizens in Australia who hold a subclass 444 special category visa, migrants who are eligible for JobSeeker payment or Youth Allowance (Other).
The program is now open for applications through the ATO, eligible employers need to include supporting information demonstrating the relevant downturn in the business. In addition, employers will also be required to report the number of eligible employees employed by the business to the ATO on a monthly basis. The first payments are expected to flow to eligible businesses in the first week of May as monthly arrears.
According to the government, where employers participate in the scheme, they must pay eligible employees a minimum of $1,500 per fortnight before tax, even if the eligible employee ordinarily receives less than that amount. If an employee ordinarily receives more than $1,500, they should continue to receive their regular income according to their prevailing workplace arrangements. The aim of the JobKeeper Payment is to subsidise the employer to continue operating.
Individuals eligible for both the JobKeeper Payment and the JobSeeker Payment (including the Coronavirus Supplement) will only be eligible for one type of payment. In addition, where an employee has multiple employers, only one employer will be eligible to receive the payment. The employee will need to notify their primary employer to claim the JobSeeker Payment on their behalf. The claiming of the tax-free threshold will in most cases be sufficient notification that an employer is the employee’s primary employer.
Is your business eligible?
In this economic environment, Hunter Partners want you to have all the help you need for your business and employees. Hunter Partners can help you work out whether you qualify for the payment, gather the necessary supporting documentation and make applications to the ATO on your behalf. Contact Hunter Partners now on (07) 4723-1223.
Hunter Partners are Accountants, Tax Agents and Financial Planners. We can assist you with all aspect of your accounting, tax and financial planning requirements, call Hunter Partners on (07) 4723-1223.