On 30 March 2020 the Government announced a $130 billion package to support as many as 6 million Australian workers whose livelihoods have been hit by the pandemic.
The key feature is a $1,500-per-fortnight JobKeeper payment for employees of businesses who have reduced turnover due to COVID-19 crisis. Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a wage 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 of 6 months.
• Employer of a business who has lost 30 percent of their business turnover due to COVID-19 crisis (or 50 per cent for businesses with annual earnings of $1 billion)
• For employees, eligible employees as per below as at 1 March 2020
– Full-time workers (including stood down employees)
– Part-time workers (including stood down employees)
– Casual employees who have been with their employer for at least 12 months
– Sole traders
• Eligible employees include:
– Australian citizens
– 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
– Special Category (Subclass 444) Visa Holder.
Not for profits, charities and other things of that nature are included.
The $1,500 per fortnight is before tax. It will be up to the employer if they want to pay superannuation on any additional wage paid because of JobKeeper payments.
This measure will be delivered through the Australian Taxation Office to continue using existing infrastructure rather than create a new mechanism. You can currently register your interest for the scheme on the ATO website. We also attach the Treasury fact sheet for employers.
Employees will be able to receive this payment in a number of different ways:
• If employees ordinarily receive $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to the prevailing workplace arrangements. The JobKeeper Payments will subsidise part or all of the employee’s income.
• If employees ordinarily receive less than $1,500 in income per fortnight before tax, the employer must pay the eligible employee, at a minimum, $1,500 per fortnight, before tax.
• If the employee has been stood down, the employer must pay the employee, at a minimum, $1,500 per fortnight, before tax.
• If the employee was employed on 1 March 2020, subsequently ceased employment and then were re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.
Importantly, as far as the Government’s previously announced JobSeeker payment goes, people cannot claim both, so if the employee has already applied for JobSeeker but would like to go to JobKeeper instead, the Prime Minister suggested that the employee speaks to their employer so you can be moved across to this new payment.
However, if you’re only claiming JobSeeker, the partner pay income test, which was once restricted to an annual wage around $40,000, has now been boosted to just under $80,000.
The draft legislation will not be released until early next week. As soon as it has been released, we will provide further details and outline how we can assist you in the process.
As always please contact us if we can be of any assistance to your business in these troubled times.
DISCLAIMER: This article is intended to provide a general summary only and should not be relied on as a substitute for professional advice.
© 2020 WMS Solutions Pty Ltd
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