On 30th of March 2020 the Australian Government released a further $130 billion economic response package to address the impact of coronavirus [COVID-19].
H + Co Technical update: Government announces JobKeeper payment in response to deepening trading conditions as a result of COVID-19
As a result of the deepening trading conditions presented throughout Australia, on the 30th of March 2020 the Australian Government released a further $130 billion economic response package to address the impact of coronavirus [COVID-19]. The package is designed to provide a wage subsidy to around 6 million workers so that their jobs remain intact when the pandemic subsides.
Called the JobKeeper Payment it is designed to help businesses affected by COVID-19 to cover cost of their employee’s wages, so that more employees can retain their job and continue to earn an income.
The JobKeeper payment is a temporary scheme open to businesses impacted by COVID-19, this includes the self-employed.
The Government will provide $1,500 per fortnight per employee up to 6 months.
Eligibility
Employers [including non-for-profits] will be eligible for the subsidy if:
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Business Class |
Criteria |
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Businesses with turnover under $1 billion |
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Businesses with turnover over $1 billion |
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Self-employed persons |
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Eligible employers will receive the payment for each eligible employee that was on their books on 1 March 2020.
Employers must participate in the scheme: This is conducted via the Australian Taxation Office [ATO] via submission process; including supporting documentation demonstrating the drop in income. In addition, employers must report the number of eligible employees employed by the business on a monthly basis.
Employment type: the scheme extends to full-time, part-time and long-term casual employees. Long-term casual employees are employees who have been employed on a regular basis for at least a 12-month period as at 1 March 2020.
How much will the employee receive?
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.
The following table summarises the proposed announcement:
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If an employee receives more than $1,500 per fortnight [before tax] |
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If the employee receives less than $1,500 per fortnight [before tax] |
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If the employee has been stood down |
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If an employee was employed on 1 March 2020 and subsequently ceased employment with their employer, and then was re-engaged by the same employer |
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Superannuation issues: It will be up to the employer if they want to pay superannuation on the $1,500 job keeper payment.
Payments: Payments will be made to the employer monthly in arrears by the ATO.
Timing of payments
The wage subsidy will commence on 30 March 2020.
The first payment payments will be received by employers in the first week of May 2020. Businesses can register their interest in participating within the scheme from 30 March 2020.
Registration
Registration is made through the ATO. https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper
