On 30th March 2020 the Federal Government announced the third round of economic stimulus in response to the Coronavirus outbreak. For businesses and self-employed, the announcement introduced the JobKeeper Payment which provides further support for businesses to retain jobs. For individuals, the partner income test relating to eligibility for Centrelink payments (JobSeeker Payment, Partner Allowance & Widow Allowance) has been increased to $79,762.
At time of writing the legislation for the JobKeeper Payment has not yet been enacted – so our advice is to sit tight for now.
We have compiled a summary of how the subsidy is expected to work, based on the announcements made to date.
The JobKeeper payment is a fortnightly payment of $1,500 per eligible employee for up to 6 months. This assistance is designed to help businesses to keep people in their jobs and re-start when the crisis is over. The payment will be available to businesses and those self-employed. The subsidy will start on 30 March 2020, with the first payments to be received by employers in the first week of May.
Eligibility criteria (as it relates to HQB clients)
Eligible employers (including non-for-profits) are employers whose turnover has or will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month).
Note that it is presently unclear if and how businesses that have operated for less than 12 months will meet the reduced turnover eligibility requirements, or how turnover is to be measured. We expect this detail to be revealed once the legislation is passed.
Eligible employees are employees who meet the following criteria:
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.
HOW IT WILL WORK
Employers will need to elect to participate by making an application to the Australian Tax Office (ATO) and provide supporting information demonstrating a downturn in their business. HQB will assist you with this process.
The online application is not yet available.
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.
• 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.
In circumstances where an employee is accessing support though Services Australia because they have been stood down or had their hours reduced and the employer participates in the JobKeeper Payment, the employee will need to advise Services Australia of their new income. Where employees have multiple employers – only one employer will be eligible to receive the payment.
LEAVE ENTITLEMENTS & SUPERANNUATION GUARANTEE
For employees that have not been stood down, leave entitlements and superannuation will continue to accrue as per their workplace agreement. If an employee effectively receives a ‘pay rise’ due to the JobKeeper payment, it will be up to the employer if they want to pay superannuation on the additional wage component.
For employees that have been stood down and receive the JobKeeper Payment, leave entitlements will continue to accrue. We do not expect superannuation to apply as there would be no ordinary time earnings.
For employees that have been stood down and do not receive the JobKeeper Payment (because the employer is not eligible for example), leave entitlements will continue to accrue. We do not expect superannuation to apply as there would be no ordinary time earnings.
– Jason Bamford & Jamie Newling
This article is compiled as a helpful guide for your private information and is subject to copyright. We suggest that you do not act solely on the basis of material contained in this article because items are of general nature only and may be liable to misinterpretation in particular circumstances. We recommend that our advice be sought before acting on any of these crucial areas.