JobKeeper Payment - what does it mean to your business?

Yesterday Prime Minister Scott Morrison announced that the Federal Government will release $130 million with the single objective of keeping Australians in jobs to offset the impact of COVID-19.   In short, it is a payment of $1500 per employee per fortnight (before tax) as a wage subsidy paid to employers.  Employers who apply for the payments will have a legal obligation to ensure the full amount is passed on to eligible employees.  
So, what does this mean to you and your business and how do you access this support?  

---

Click here for information  WHO
The eligibility criteria is as follows:
Employer

• Businesses with a turnover of less than $1 billion that currently has, or will experience  a reduction in revenue of 30% or more since 1 March 2020 based on a comparable period of time of at least one month 
• Businesses with a turnover of $1 billion or more currently has, or will experience  a reduction in revenue of 50% or more since 1 March 2020.
• Not for Profit entities and self employed workers the meet the turnover tests are also eligible.

Employee

• Any full time or part time employee on your books at 1 March, and any casual employee who has worked for you on a regular basis for over 12 months .
• Any employees currently employed by you – including anyone who has been stood down 
• Are at least 16 years old.
• Includes Australian citizens, holders of permanent visas, Protected Special Category Visa Holders, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder.
• Not receiving this payment from any other employer.

WHEN
Effective immediately with payments from the Australian Tax Office directly to the employers to commence in the first week of May, backdated where applicable to 1 March, 2020.  The payments will cover a six month period.

HOW

• The first step as an employer is to register your interest in the Job Keeper subsidy payments via the ATO website 
• You will be provided with updates on next steps as they become available
• Communicate with your employees that you are instigating this payment.  It will mean that they will not be eligible for JobSeeker payments and that they must advise Services Australia immediately of their new income.  
• If your cash flow is significantly impacted already and you are unable to pay employees as a result, the advice from the Prime Minister is to contact your bank and show proof of application for the JobKeeper payment.  This money is guaranteed and you should be able to negotiate a release of funds that will support these payments until they kick in at the beginning of May. 

PAYMENT PROCESS
COVID-19 has caused changes to occur at breakneck speed so there will be many employers facing differing circumstances for differing categories of , so an overview of how this subsidy may work is as follows:

1. Employees still working for you and earning over $1500 per fortnight,– you can continue to pay their regular income based on prevailing workplace arrangements.  The JobKeeper Payment will assist you in continuing to operate the business by subsidising all or part of their income.  
2. If an employee receives less than $1500 per fortnight before tax, the JobKeeper Payment will require you to pay them, at a minimum $1500 per fortnight, before tax.
3. If you have had to stand down employees, you will now be able to pay them, at a minimum, $1500 per fortnight, before tax.  This is backdated to the date of the stand down. 
4. 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 employer will receive $1,500 per fortnight, before tax for this employee

SUPERANNUATION
Superannuation must continue to be paid on regular wage amounts.  But it is up to you to decide if you are willing to pay super on any additional JobKeeper payments.  For example: Jerry is normally paid $1,000 a fortnight plus superannuation.  With the JobKeeper subsidy, you will pay him the $1,500, with superannuation paid on the first $1,000.  From there it will be up to you to determine whether or not you will pay superannuation on   the additional $500.

The aim of the JobKeeper package is to keep employees in jobs and keep employees and employers connected.   If your business is in an industry that is being impacted by the COVID-19 – but not directed to shutdown yet – this payment will allow you to keep your team working and preparing for when we come through to the other side of this insidious virus.  For those who have been directed to close, this payment will mean you can keep your team employed and linked to you so keep communicating with them.  This is a time for analysing and planning and getting ready to reopen as soon as you are allowed.

Please remember that you must continue to accrue leave entitlements for all employees who have been stood. 

Additional information regarding JobKeeper Payments is available from the Australian Government Treasury.  
Click here for information for employers and click here for information for employees.

Contact the HR Staff n’ Stuff team for guidance on how best to structure your team and how the JobKeeper Payment can support your payroll burden and keep your team employed.  We will continue to support you through this challenging time.   

Subscribe to our HR Newsletter. No junk, Just the Good Stuff!