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Australian Government launches $130 billion ‘JobKeeper’ wage subsidy
In response to the significant economic and social impact from the coronavirus, the Australian Government has launched the ‘JobKeeper’ scheme - a $130 billion initiative which encourages employers to keep Australian employees in jobs.
Launching the latest part of the Federal Government's economic stimulus package, Australian Prime Minister Scott Morrison stated “we will give millions of eligible businesses and their workers a lifeline to not only get through this crisis but bounce back together on the other side.
“This is about keeping the connection between the employer and the employee, and keeping people in their jobs even though the business they work for may go into hibernation and close down for six months."
What does this mean for businesses?
The scheme will operate as a wage subsidy to be paid by the Australian Tax Office (ATO) directly to employers of $1500 per fortnight for each eligible employee. The payments will cover a six-month period from 30th March 2020, with the first payments to be made in May and backdated.
Employers will be eligible for the subsidy if:
• Their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month); or
• Their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month); and
• The business is not subject to the Major Bank Levy.
Also, the employer must have been in an employment relationship with eligible employees as of 1st March 2020 and confirm that each eligible employee is currently engaged to receive
Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper payments.
Employees will be eligible for inclusion in the payment scheme if they are over 16 years of age, were currently employed as at 1st March 2020 (including those stood down or re-hired), and are:
• Full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1st March 2020), 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.
If employees receive the JobKeeper payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper payment as income.
What do employers need to do?
Businesses will have to do the following to receive JobKeeper payment(s):
• Register your intent to apply with the ATO
• Assess if turnover has or will reduce by 30%
• At a future date (not yet published), apply online via the ATO
• In the application, provide information on all eligible employees to the ATO, and then do so each subsequent month that the payment is to be claimed. The ATO will pre-populate employee details using Single Touch Payroll data
• Ensure that each eligible employee is paid a minimum of $1500 per fortnight (before tax), or top-up pay to that level if income has been reduced below that level
• Inform all eligible employees that they are receiving the JobKeeper payment.
Employers can, but do not have to, pay superannuation on the JobKeeper payments made to eligible employees.
The eligibility for individual employees is open; employers must continue to employ staff who were employed as of the 1st March 2020 and can re-engage any employees stood down or retrenched, and then ensure each employee is paid at least $1500 per fortnight.
Employees who are not re-engaged, or where their income drops below the income threshold for the JobSeeker payment, will continue to be eligible for the JobSeeker payment plus the Coronavirus Supplement Payment from Centrelink.
Information courtesy of HR Assured, Fitness Australia's workplace relations partner.
24th March 2020 - Up to 300,000 hospitality jobs set to be lost across Australia
23rd March 2020 - LPA seeks targeted financial stimulus for live performance industry
21st March 2020 - One million jobs a day being lost due to Coronavirus pandemic
17th March 2020 - LPA calls for $850 million live performance support and stimulus package
13th March 2020 - Tourism Industry body welcomes Federal Government’s Coronavirus stimulus
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