The Jobkeeper Payment… Helping to Keep Businesses in Business
On Monday, the Morrison Government introduced a new subsidy program to support employees and businesses.
The JobKeeper Payment is designed to help businesses affected by the Coronavirus to cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.
Keeping Australians in work and businesses in business will lay the foundations for a stronger economic recovery once the Coronavirus crisis passes.
The JobKeeper Payment is a temporary scheme open to businesses impacted by the Coronavirus, and to the self-employed. The Government will provide $1,500 per fortnight per employee for up to 6 months.
The JobKeeper Payment will support employers to maintain their connection to their employees. An employee retention tool, so you can bounce back quicker. These connections will enable business to reactivate their operations quickly – without having to rehire staff – when the crisis is over.
We do not have any clients with a turnover of more than $1b (not yet anyway…) and we do not have any clients who are subject to the Major Bank Levy. We will therefore focus our attention on the first requirement for eligibility.
An employer will be eligible 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 a year ago (of at least a month).
Reading between the lines, the periods for comparison could be:
1. March 2019 vs March 2020; or
2. April 2019 vs April 2020; or
3. 15 March 2019 to 15 April 2019 vs 15 March 2020 to 15 April 2020; or
4. Some other period, provided it is a comparable period of at least a month.
You couldn’t for example compare a traditionally busier month (say for example December or January if you are in hospitality or school supplies) to the current period, but you could compare a “typical” month. This “typical” month comparison will be an important concept for new or growing businesses, and further direction will come on this point in due course. We will continue to provide updates as new information is released.
An important point to note, and we cannot stress this enough - employers must elect to participate in the scheme. This is not an automatic entitlement. Please register your interest at https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper
When legislation is enacted and this announcement becomes law, the employers that are intending to apply for this subsidy for their employees will need to make an application to the Australian Taxation Office (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 a monthly basis.
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 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.
And perhaps very importantly, 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). This could serve to keep our self-employed clients from the Services Australia/Centrelink queues and the additional hassles that could be created where you have a small business entity like a trust.
All employers should also pay close attention to our “Adapt to Survive then Thrive” blog post as well – as mentioned at the top of this post, this announcement is a wage subsidy to keep your employees engaged, but you will still need to be well aware of your business’s financial strength so that your business can also thrive on the bounce which will come!
This is an evolving situation and further updates will be coming through – please check back regularly for more information.