Jobkeeper – In a nutshell

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PAYMENT

The Government announced the “JobKeeper Payment” as part of a wage subsidy measure to assist business during the anticipated downturn stemming from the coronavirus.

OVERVIEW

This new measure is designed to provide a wage subsidy of $1,500 per fortnight per employee. The payment will be paid to employers, for up to 6 months, for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by that employer.

Where a business has stood down employees since 1 March 2020, the payment is designed to help the employer maintain connection with those employees. Employers will receive a standard payment of $1,500 per fortnight per eligible employee. Every eligible employee must receive at least $1,500 per fortnight from this business.

TIMING OF PAYMENT

The first payments will be received by eligible businesses in the first week of May from the ATO, as monthly arrears. Eligible businesses can begin distributing the JobKeeper Payment immediately and will be reimbursed from the first week of May.

ELIGIBLE EMPLOYERS – MIN 30% REDUCTION IN REVENUE

Eligible employers will be those with annual turnover of less than $1bn who self-assess that have a reduction in revenue of 30% or more, relative to a comparable period a year ago (of at least a month).Employers with an annual turnover of $1bn or more would be required to demonstrate a reduction in revenue of 50% or more to be eligible. Businesses subject to the Major Bank Levy will not be eligible.

Eligible employers include companies, partnerships, trusts and sole traders. Not-for-profit entities, including charities, are also be eligible. Eligible employers who have stood down their employees before the commencement of this scheme will be able to participate, providing they re-engage those employees who were on their books at 1 March.

The key for employers wishing to access the per-employee payment, is to stay connected with your employees – whether that entails them continuing to work their normal hours from home, being cut back to part-time, taking paid annual leave or unpaid leave etc. Without that employment connection, eligibility is not met.

Employers must elect to participate in the scheme. They will need to register their interest on the ATO website and eventually provide supporting information demonstrating a downturn in their business. The full application process will be made clear once legislation has passed. In addition, employers must report the number of eligible employees employed by the business monthly.

ELIGIBLE EMPLOYEES

Full time and part time employees, including stood down employees, are eligible to receive the JobKeeper Payment. Where a casual employee has been with their employer for at least the previous 12 months, they will also be eligible for the payment.

An employee will only be eligible to receive the payment from one employer.

The employee will need to notify their primary employer to claim the JobKeeper Payment on their behalf. Eligible employees include Australian residents, NZ citizens in Australia who hold a subclass 444 special category visa, and migrants who are eligible for JobSeeker Payment or Youth Allowance (Other).

Self-employed individuals are also eligible to receive the JobKeeper Payment, where they have suffered or expect to suffer a 30% decline in turnover relative to a comparable prior period (of at least a month).

Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

REGISTER At this stage, the only action required is to register your details on the ATO website. More information will be provided once the legislation is drafted, and the ATO sets up the accompanying online architecture.