COVID-19 JobKeeper Payments
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The third and largest coronavirus support package to date is a $130 billion economic injection designed to save jobs for the next 6 months. In this package, businesses may be entitled to receive a fortnightly wage subsidy of $1,500 per employee.
The so-called JobKeeper Payment is designed to keep people in work and the Government expects up to 6 million people will benefit from the subsidy.
Comment:
We applaud the government for their boldness in providing support of this magnitude. We have no doubt the package will save, and most likely already has saved, thousands of jobs. Importantly, it covers businesses - both large and small - with sole traders and those self-employed through companies and trusts also being eligible.
However, we caution that there is very limited detail currently available on how eligibility will work, particularly around how the 30% turnover reduction test will be applied. We expect this detail in draft legislation next week and, until then, clients should be careful in making decisions based on assumed eligibility.
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Eligibility for employers
- This assistance will go to companies, including not-for-profits, which experience, or will experience, either:
- more than 30 percent reduction in their turnover compared to the same period last year – if turnover is less than $1 billion; or
- more than 50 percent reduction in their turnover compared to the same period last – if turnover is greater than $1 billion.
- Not-for-Profits and self-employed individuals not employing any staff will still be eligible provided they meet the turnover tests as outlined above.
- The employer must have employed eligible employees by 1 March 2020 and confirm that each eligible employee is still employed.
- Employees who were stood down or made redundant will need to be reinstated by their employers to qualify for the payment.
- The assistance will be paid via the current ATO system in the first week of May 2020, with the payment backdated to 30 March 2020.
Eligibility for employees
- Eligible individuals will be full-time, part-time, sole-traders and casual employees who have been with their employers for longer than 12 months and are at least 16 years of age.
- New Zealand employees on the 444 visa will be eligible.
- Temporary visa holders will be ineligible.
- Employees that have applied for JobSeeker payment will need to notify their employers as an employee will only benefit from either, but not both, of the wage subsidy schemes.
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Immediate actions to take
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Initially, employers can register their interest in applying for the JobKeeper Payment via The Australian Taxation Office (ATO), from 30 March 2020.
Click here to register your interest in the JobKeeper Payment.
If in doubt regarding eligibility we recommend you still register your interest now and we will assist in clarifying once details are released.
Subsequently, eligible employers will be able to apply for the scheme by means of an online application.
We understand right now many questions will remain unanswered. Be assured we will stay abreast of key developments and share key updates with you as the information becomes available.
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Thank you for your continued trust in our firm; we will continue to focus on helping you through these times. This is a constantly shifting scenario so please keep up to date with announcements from relevant government bodies, the ATO, and public health authorities, in addition to any updates we provide you.
Please do not hesitate to contact us if you have any questions or concerns.
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