JobKeeper – Federal Government Stimulus Package 3.0

The JobKeeper Payment is designed to help businesses affected by the Coronavirus to cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.

Details of the JobKeeper stimulus package are still coming through – and it is still to be passed into law. However, here is what we know so far:

  • Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 (pre-tax) per eligible employee from 30 March 2020, for a maximum period of 6 months.
  • Employers will be eligible for the subsidy if their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month). Businesses will need to provide supporting information demonstrating this downturn and will need to report the number of eligible employees employed on a monthly basis.
  • 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.
  • 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.
  • Eligible employers who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

NB If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.

How Will It Work?

  • Eligible employers will be paid $1,500 per fortnight per eligible employee.
  • Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.
  • Where employers participate in the scheme, their employees will receive this payment 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.
  • It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
  • Payments will be made to the employer monthly in arrears by the ATO.
  • The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May.

Next Steps:

  •  If you meet all the eligibility criteria and wish to register for this scheme, you first need to register your interest – click here,
  • Talk to your employees, tell them what you are doing, they will be nervous, they will have questions. If you don’t know all the answers, point them in the direction of the Treasury Department factsheet which can be viewed here.

Whilst the majority of employees will need to do nothing further the factsheet outlines the various circumstances whereby they will need to notify their employer of specific information relating to their employment and visa status.

  • Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
  • Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.
  • Notify all eligible employees that they are receiving the JobKeeper Payment.
  • Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business.

Additional information, including various examples can be found on the various Treasury Department Factsheets, available here.

Disclaimer: The information contained herein is correct at the time of preparation. This may not be a complete list and businesses & individuals should seek independent advice to determine their eligibility for any of the support options listed above.