The government has now legislated and released some more details on how their Covid-19 JobKeeper Package. We can finally answer some of the Frequently Asked Questions we’ve received since our last blog about the topic on 31 March 2020. The ATO are still working on the details as to how this will be administered in practice, which we expect to be announced this week.
Snapshot of the JobKeeper package
- Businesses will be eligible for the Wages Subsidy known as JobKeeper Payment if they estimate their revenue (turnover) has, or will likely fall by 30% (for businesses with a turnover of under $1 billion.)
- The gross (before tax) fortnightly payment of $1,500 will be available for each eligible employee who was employed as at 1 March 2020, including full-time, part-time, long-term casuals (employed by you for over 12 months) and stood down employees.
- Payments from the ATO will commence in the first week of May, and will be paid in arrears back to 30 March 2020, and must be paid in full to your employees, regardless of whether their usual income is less than this amount per fortnight.
- This scheme will remain in place until 27 September 2020 (6 months / 13 fortnights).
- You must elect to be in this scheme with the ATO, and will be required to provide supporting information showing the downturn in your business.
- The official application process is expected to open soon.
- If you haven’t already, register here for updates.
- The main test or basic test requires the GST turnover to have fallen by more than 30% when compared with the same period for either;
- If there is no relevant comparison period in 2019, there will be an alternative test announced by the ATO.
- Once an entity satisfies the decline in turnover test, they do not need to retest this on a month by month basis. They will be required to report their turnover to the ATO for the current month, as well as a projection for the following month. This information will be used to assess the economic impact of coronavirus on a month by month basis.
- The ATO will provide more guidance on self-assessment of actual and anticipated falls in turnover.
- Sole Traders actively in business will be eligible for the payment if they meet the turnover test, so long as they are not claiming JobKeeper from another employer.
- If the turnover test is met, then one partner of a partnership can be nominated to receive JobKeeper.
- Where a beneficiary or a trust only receives distributions rather than being paid salary and wages, and the turnover test is met, then one individual beneficiary can be nominated to receive JobKeeper.
- An eligible company may nominate one director or shareholder to receive the payment if they are paid by way of director’s fees or dividends for their labour. That individual must not be in receipt of the payment as an employee.
Other points to note
- Employers will be able to backpay their stood down staff to 30 March 2020 in order to access JobKeeper payments.
- Superannuation & PAYGW will be paid as per usual for your employees. Where the employee is having their wages topped up to the $1,500 per fortnight, it is up to the employer if they want to pay superannuation on that extra amount or not.
- The JobKeeper payment will generally be made to an employer, rather than being used to offset any tax liabilities.
Eligible small businesses can receive the 50 per cent wage subsidy for apprentices and trainees from 1 January to 31 March 2020. Where
small businesses receive the JobKeeper Payment, they are not eligible to receive the apprentice and trainee wage subsidy from 1 April 2020
Interactions with JobSeeker
- If an employee has registered for JobSeeker through Services Australia (Centrelink) and later been advised by their employer that they should be in receipt of JobKeeper, they will need to report their JobKeeper income to Centrelink. This is likely to result in their JobSeeker payments being terminated. The JobKeeper payment is $1,500 before tax per fortnight, whereas JobSeeker is $1,124.50 before tax per fortnight.
There are a range of measures in place to ensure the JobKeeper Program is not exploited by Australian businesses. Refer to the below link
to read more about;
We have found this Fact Sheet of FAQ’s
to be the most helpful recently released document.
Other Fact Sheets containing more details and examples
Lee and Tegan from HR Dept Ringwood have offered a special Covid-19 HR survival package for those employers in our network. It includes;
- Up to 2 hours of phone advice customised to your industry and your business
- Templates / letters to support the different scenarios you and your team may be faced with, such as working from home, reduced hours, stand down and shut downs
The package cost is $400 + GST.
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