Yesterday, the government announced a raft of new measures to assist Australian businesses struggling with the economic impact of
coronavirus. Below is an outline of the new items, which are in addition to those we explained on our blog
on 23rd March 2020.
JobKeeper
If your business has been significantly impacted by the Coronavirus you will be able to access a wages subsidy to continue paying your
employees. Under the JobKeeper program, you will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020,
for a maximum of six months. This assistance will help you keep staff and will help you restart when the crisis is over.
JobKeeper - Eligibility
Employers (including non-for-profits) will be eligible for the subsidy if their business has a turnover of less than $1 billion and their
turnover will be reduced by more than 30 per cent relative to a comparable period (of at least a month) a year ago.
Employers must apply to the Australian Taxation Office (ATO) to be part of this scheme, including providing information demonstrating a downturn in their business and the number of eligible employees in any given month. Please ensure your accounting records are kept up to date in preparation for this. Please register your interest direct with the ATO here to keep updated.
Eligible 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 (with the employer for at least the past 12 months) and stood down employees. Eligible 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.
Where an employee is accessing support though Services Australia (Centrelink) because they have been stood down or had their hours reduced and the employer will be eligible for the JobKeeper Payment, the employee should advise Services Australia of their change in circumstances.
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 (of at least a month).
Where employees have multiple employers – only one employer will be eligible to receive the payment. The employee will need to notify their
primary employer to claim the JobKeeper Payment on their behalf. The claiming of the tax free threshold will in most cases be sufficient
notification that an employer is the employee’s primary employer.
JobKeeper – Payment Process
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.
Where employers participate in the scheme, their employees will receive this payment as follows:
- If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist their employer to continue operating by subsidising all or part of the income of their employee(s).
- If an employee ordinarily receives less than $1,500 in income per fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- If an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.
It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment. We believe super guarantee (9.5%) will still be required to be paid to the extent it is the employees regular wage.
Payments will be made to the employer monthly, in arrears by the ATO. The first payment will be in the first week of May 2020.
For more detail and some examples, please refer to the below fact sheets prepared by the government:
The JobKeeper package is yet to be passed through legislation, and as yet, not all details have been clarified. We ask for your patience
in responding to you whilst we, as well as the Government, work through the fine points.
Relief for tenants
It has been announced that there will be a six-month time freeze on commercial and residential evictions, for those unable to pay their
rent due to the current economic downturn. The details are still to be worked out and are expected to be announced in the coming days.
Increase in the partner income threshold for welfare
It was also announced that the limit for a spouse’s income when applying for welfare will be increased from $48,000 to $79,000. Please
liaise directly with Services Australia (Centrelink) with regards to your eligibility.
Should you wish to discuss this in more detail, please email your accountant or tax@hgfin.com.au and we will be in touch.