Job Keeper Payment

Job Keeper Payment

This afternoon, PM Scott Morrison announced his 3rd instalment to the COVID-19 stimulus package for the Australian economy. This package is centered around the ‘Jobkeeper package’ that will total $130bn over 6 months to ‘support the jobs and livelihoods’ of almost 6 million Australians.

The ongoing theme is for the government to assist in nursing the Australian economy in a ‘hibernation state’ through the next 6 months.

Pleasingly, there was a reiteration of the 6-month moratorium on evictions for both commercial and residential tenants, with details of these arrangements still to be released. Mr Morrison did say that there would be no other assistance or support for rental agreements and that landlords and tenants would need to sit down together on a case by case basis and work out the next 6 months together.

What is Jobkeeper?
The JobKeeper payment is intended to provide wage subsidies to businesses that are significantly affected by COVID-19. Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.

Is my business eligible?
You will be eligible if your business has turnover of less than $1bn AND your turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month).

Businesses will need to sign a declaration stating that their income has fallen by 30% or more.

Your business must have been in an employment relationship with eligible employees as at 1 March 2020, and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments

30% decline in ‘a comparable period’
It is not clear which is the relative or comparable period as the press release says ‘ turnover will be reduced by more than 30 per cent relative to a comparable period a year ago’.

It does, however, appear to be forward-looking, such that you may not yet have experienced a 30% decline but it ‘will be’ in the future.

For which employees will I receive the subsidy?
Your business will receive a $1,500 per fortnight subsidy for all full time and part time employees, AND all casual employees that have been employed for at least 12 months (to 1 March 2020).

Employees must be at least 16 years of age, Australian citizena, 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.

You must pass on the Jobkeeper payment
If you have ‘stood down’ employees or an employee earns less than $1,500 per fortnight, it appears that you will still have to pass on the full $1,500 of the subsidy to that employee. This does seem inequitable in a way, given that an employee who earns less than $1,500 per fortnight will get an automatic payrise to $1,500 per fortnight but an employee earning more than $1,500 per fortnight will not have their pay affected.

In short, participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.

Is the employee superannuation amount affected?
You only need to pay super on the real wage amount, not any additional. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

Do I withhold PAYGW on the additional subsidy payments?
Yes, it appears that any subsidy that is passed on to the employee, even if it is above their usual wage, will have PAYGW taken out. The example given is for 3 beauticians that have been ‘stood down’, therefore they aren’t working, but the employer must pass on the $1,500 per fortnight BEFORE TAX so we are assuming that PAYGW needs to be taken out.

However, this is not clearly outlined and will need to be clarified once the legislation is passed.

NOTE: Businesses will need to notify all eligible employees that they are receiving the JobKeeper Payment

How do I register?
Follow this link to register your interest on the ATO website.

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