The Federal Government has announced the JobKeeper Payment scheme to commence from 1 May 2020. This is a wage subsidy of $1,500 per fortnight, per eligible employee to eligible businesses affected by COVID-19, for the next 6 months.
We answer the need to know questions:
- Is my business eligible?
A businesses with turnover of less than $1 billion will be eligible if it has experienced a loss in turnover of at least 30% (for at least 1 month), in comparison to the same period least year.
There are some other business which may also be eligible, including those with over $1 billion turnover with a loss of at least 50% turnover and new businesses which were not around last year, at the Tax Commissioner’s discretion.
employees are eligible?
Eligible employees are employees who:
- were employed with the business as at 1 March 2020;
- are currently employed by the employer (including stood down, or re-hired);
- are full-time or part-time employees;
- are long-term casuals (employed on a regular basis for a period longer than 12 months as at 1 March 2020);
- are at least 16 years old;
- 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.
- What do
employer’s need to do to be eligible?
In addition to meeting the turnover reduction thresholds, employers also need to:
- ensure that all eligible employees receive at least $1,500 per fortnight;
- provide notice to all eligible employee that they will be receiving JobKeeper Payments;
- obtain the Employee Nomination Form from each individual eligible employee to confirm that they are eligible; and
- comply with any information requests made by the ATO on a monthly basis, including details relating to monthly turnover and the number of eligible employees.
- What are the payments and when will they be made?
The JobKeeper Payment is a flat $1,500 per fortnight per eligible employee, which will be paid in arrears once per month. This is a pre -tax payment.
This amount must be paid in full to the employees, irrespective of whether the employee typically earns less. You cannot pay your employees less than $1,500 per fortnight and keep the difference. If an employee earns more than $1,500 per fortnight, the difference will be out of pocket.
Payments will be received by employers in the first week of May and will be backdated to 30 March.
- How should you pay employees?
You will need to re-start or continue to pay your eligible employees the minimum $1,500 per fortnight in line with the existing pay cycle. You should pay your employees for each JobKeeper fortnight you plan to claim for. The first fortnight is from 30 March – 12 April and each JobKeeper fortnight follows after that. The impact of these requirements is you will need to pay employees prior to receiving reimbursement from the ATO. You will not be able to wait to receive payment from the ATO before making back dated payments to eligible employees.
What are my next steps as an eligible employer?
- Register your intention to apply for the JobKeeper payment on the ATO website this can be done from 20 April 2020;
- Ensure that you and your employees are eligible;
- Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight;
- Notify eligible employees that you intend to apply for JobKeeper payment on their behalf and receive the Employee Nomination Notice to confirm they are eligible; and
- From 20 April 2020, enrol with the ATO for the Jobkeeper payment.
If you have any other issues or questions in relation to the COVID-19 situation, you are welcome to get in touch or book an initial consultation with us www.gladwinlegal.com.au