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The JobKeeper Payment

The Australian Government yesterday announced its ground-breaking JobKeeper program to help Australian businesses stay in business and keep Australians in jobs during the COVID-19 pandemic.

The Prime Minister announced the program is worth $130 billion over 6 months and is designed to support jobs for 6 million Australians who will need it. You can read the Prime Minister’s statement about the JobKeeper program by clicking here.

Which businesses are eligible?

To be eligible, businesses with turnover of:

  • up to $1 billion per year must show a loss of turnover of 30% or more;
  • over $1 billion per year must show a loss of turnover of 50% or more.

Also, the business must employ eligible employees.

Who are eligible employees?

An eligible employee is:

  • an Australian citizen
  • the holder of a permanent residency visa;
  • a New Zealand citizen holding a Special Category subclass 444 visa
  • a Protected Special Category Visa Holder; or
  • a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more

What can a business claim?

If eligible, businesses can claim $1,500 per eligible employee per fortnight, for up to 6 months.

Must employers pass on the payment?

Employers receiving the JobKeeper payments must pay these to eligible employees.

The $1,500 payment to employees is before tax.

Employees who usually receive less than the JobKeeper payment, will still receive the full rate (a pay rise!).

Employees who usually receive more than the JobKeeper payment are required to be paid their usual salary/wages, so the employer must top up the payment.

The Australian Taxation Office (‘ATO’) will track payments to employees through the single touch payroll system.

When will payments be made?

Payments will begin to flow from 1 May 2020 and be backdated to 30 March 2020.

Employers will receive the payment for each eligible employee that was on their books on 1 March 2020 and continues to be engaged by that employer – including full-time, part-time, long-term casuals (more than 12 months) and stood down employees.

What about employees who have been stood down?

Employers who have stood down their employees before the commencement of this scheme will be able to participate. Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

Re-instated employees must be paid the JobKeeper payment as a minimum.

Employees who have been stood down and registered for Job Seeker Allowance cannot also claim the JobKeeper payment. If reinstated in their job and receive the JobKeeper payment, then the employee must advise Centrelink and the Job Seeker Allowance will cease.

What about making superannuation payments?

Employers do not have to make the Superannuation Contribution Guarantee (‘SCG’) payments on the amount of the JobKeeper payment. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.

What if I’m self-employed?

Self-employed individuals will be eligible to receive the JobKeeper Payment where they have suffered or expect to suffer a 30 per cent decline in turnover relative to a comparable a period a year ago.

How do businesses apply?

Employers must elect to participate in the scheme. They will need to make an application to the ATO and provide supporting information demonstrating a downturn in their business. In addition, employers must report the number of eligible employees employed by the business on 1 March 2020 and on a monthly basis.

Registrations are now open on the ATO website here https://www.ato.gov.au/Job-keeper-payment/

 

 

Please note that this article was prepared by Zoë Brereton of Bell Legal Group for general information only. It is not legal advice and should not be relied upon as such.

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