H + Co Technical Update: Government announces JobKeeper payment in response to deepening trading conditions as a result of COVID-19

H + Co Technical Update: Government announces JobKeeper payment in response to deepening trading conditions as a result of COVID-19

On 30th of March 2020 the Australian Government released a further $130 billion economic response package to address the impact of coronavirus [COVID-19].

H + Co Technical update: Government announces JobKeeper payment in response to deepening trading conditions as a result of COVID-19

As a result of the deepening trading conditions presented throughout Australia, on the 30th of March 2020 the Australian Government released a further $130 billion economic response package to address the impact of coronavirus [COVID-19]. The package is designed to provide a wage subsidy to around 6 million workers so that their jobs remain intact when the pandemic subsides.

Called the JobKeeper Payment it is designed to help businesses affected by COVID-19 to cover cost of their employee’s wages, so that more employees can retain their job and continue to earn an income.

The JobKeeper payment is a temporary scheme open to businesses impacted by COVID-19, this includes the self-employed.

The Government will provide $1,500 per fortnight per employee up to 6 months.

Eligibility

Employers [including non-for-profits] will be eligible for the subsidy if:

Business Class

Criteria

Businesses with turnover under $1 billion

  • Turnover must be reduced by more than 30 percent relative to the comparable period a year ago (of at least a month)
  • The business is not subject to the major bank levy

Businesses with turnover over $1 billion

  • Turnover must be reduced by more than 50 percent relative to the comparable period a year ago (of at least a month)
  • The business is not subject to the major bank levy

Self-employed persons

  • Turnover must be reduced by more than 30 percent relative to the comparable period a year ago (of at least a month)

Eligible employers will receive the payment for each eligible employee that was on their books on 1 March 2020.

Employers must participate in the scheme: This is conducted via the Australian Taxation Office [ATO] via submission process; including supporting documentation demonstrating the drop in income. In addition, employers must report the number of eligible employees employed by the business on a monthly basis.

Employment type: the scheme extends to full-time, part-time and long-term casual employees. Long-term casual employees are employees who have been employed on a regular basis for at least a 12-month period as at 1 March 2020.

 How much will the employee receive?

Eligible employers will be paid $1,500 per fortnight per eligible employee. Eligible employees will receive, at a minimum, $1,500 per fortnight, before tax, and employers are able to top-up the payment.

The following table summarises the proposed announcement:

If an employee receives more than $1,500 per fortnight [before tax]

  • They will continue to receive their regular income amounts. The job keeper payment will assist the business with the funding of the first $1,500 of the employees wage.

If the employee receives less than $1,500 per fortnight [before tax]

  • The employer must pay the employee at a minimum the $1,500 per fortnight before tax.

If the employee has been stood down

  • The employer must pay the employee at a minimum the $1,500 per fortnight before tax.

If an employee was employed on 1 March 2020 and subsequently ceased employment with their employer, and then was re-engaged by the same employer

  • The employer must pay the employee at a minimum the $1,500 per fortnight before tax.

Superannuation issues: It will be up to the employer if they want to pay superannuation on the $1,500 job keeper payment.

Payments: Payments will be made to the employer monthly in arrears by the ATO.

 

Timing of payments

The wage subsidy will commence on 30 March 2020.

The first payment payments will be received by employers in the first week of May 2020. Businesses can register their interest in participating within the scheme from 30 March 2020.

Registration

Registration is made through the ATO. https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper

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H + Co Technical Update: Government announces JobKeeper payment in response to deepening trading conditions as a result of COVID-19

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