In the midst of the unfolding COVID-19 pandemic – the government has announced not one, two but three economic stimulus packages to attempt to ease the financial burden facing Australians in this uncertain period.
The major announcement of this third stimulus package was the introduction of the Job Keeper Subsidy which means:
- Businesses will receive a fortnightly wage subsidy up to $1,500 per employee as part of a Federal Government bid to prevent millions of people from losing their jobs to the coronavirus pandemic.
- A total of $130 billion worth is being directed toward businesses
- It is believed this payment named ‘Job Keeper’ will be accessible to around 6 million Australians who have been stood down due to COVID-19 related downturn or closure
- There will be a legal obligation for businesses who apply to receive this subsidy to ensure it is passed on to employees in full
- It is believed the subsidy will be ironed out and start flowing to businesses by early May 2020
- It will also be backdated to include anyone who has been stood down due to coronavirus. However, a person cannot receive both the JobSeeker and JobKeeper payments.
Federal Treasurer Josh Frydenberg said the aim of such subsidies is to benefit the hardest hit sectors and allow employees to remain with a job and employers to see a future through these difficult times.
“This $1,500 payment is a flat payment and is the equivalent of around 70 per cent of the median wage and represents about 100 per cent of the median wage in those sectors most heavily impacted by the coronavirus like retail, like hospitality and tourism,” he said.
Which types of businesses will be eligible?
- Businesses with an annual turnover of less than $1 billion can access this Job Keeper subsidy if their revenue has decreased by at least 30% due to COVID-19 implications relative to a comparable period (of at least a month) one year ago
- Larger employers with an annual turnover above $1 billion that have experienced a 50% drop in revenue, relative to a comparable period (of at least a month) one year ago are still eligible for the subsidies. However, businesses subject to a major bank levy will be ineligible.
- Sole traders, self-employed people, partnerships and trusts will also be eligible.
Which employees will be eligible?
This subsidy is largely aimed at supporting full time employees but will also be accessible for
- Not-for-profit employees
- Part time & casual staff who have been working with the business for at least one year
- Certain New Zealanders working in Australia who are normally not eligible for welfare payments
- Holders of permanent visas, protected special category visa holders, non-protected special category visa holders who has been residing continually in Australia for the last 10 years OR a special category (subclass 444) visa holders
How to access it? Steps for employers…
The Australian Tax Office will oversee the payment and has already created a website for companies to register interest in the JobKeeper program. Employers should:
- Register intention to apply on the ATO website and assess that your business meets or will meet the turnover decline thresholds
- Provide the ATO with information of your eligible employees as at March 1st and those currently employed, stood down or rehired (n.b. this information will be pre-populated as the ATO uses Single Touch Payroll for most businesses)
- Ensure each employee receives at least $1,500 per fortnight before tax – this means employees already earning at least $1,500 will not see a change however those earning under will see their wage topped up to reach $1,500 before tax per fortnight
- Notify all eligible employees they are receiving the Job Keeper payment
- Continue to communicate with the ATO and provide information on a monthly basis including number of eligible employees at the business
Steps for businesses with no employees:
- Register your interest in applying for Job Keeper from March 30th
- Provide an ABN for your business, nominate an individual to receive the payment and provide that individual’s TFN as well as a declaration of recent business activity
- If you are Self Employed – you will need to provide the ATO a monthly update declaring your continued eligibility for the payment and then payments will be provided monthly to the individuals bank account
We are currently assisting clients by reviewing their entitlement and registering their intent for the Job Keeper program with the ATO.
Once this process is confirmed we can assist with:
- Completing any additional registration requirements
- Provide monthly reporting to the ATO
- Manage information requests from the ATO
- Assist with communication with employees
If you have any questions or require assistance please get in touch with us and we will help you to understand and access these economic stimulus packages.