On Monday 30 March, the Australian Federal Government announced a $130 billion JobKeeper payment subsidy scheme in an effort to keep millions of Australians in the workforce during the coronavirus crisis.

A fortnightly flat payment of $1,500 will be made to employers for each employee, regardless of how much employees have been previously paid for a maximum of 6 months. The payment will provide the equivalent of approximately 70 percent of the national median wage for most industries, and up to 100 percent in some of the hardest hit industries like tourism and hospitality. Employers are required to register their interest with the ATO from 30 March 2020.

 

Eligibility for employers

  • This assistance will go to companies, including not-for-profits, which experience, or will experience, either:
    • more than 30 percent reduction in their turnover compared to the same period last year – if turnover is less than $1 billion; or
    • more than 50 percent reduction in their turnover compared to the same period last year if turnover exceeds $1 billion.
  • Businesses subject to the Major Bank Levy will be ineligible for the payment.
  • Not-for-profits and self-employed individuals not employing any staff will still be eligible provided they meet the turnover tests as outlined above.
  • The employer must have employed eligible employees by the 1 March 2020 and confirm that each eligible employee is still employed.
  • Employees who were stood down or made redundant will need to be reinstated by their employers to qualify for the payment.
  • The assistance will be paid via the current ATO system in the first week of May 2020 with the payment backdated to 30 March 2020.

Eligibility for employees

    • Eligible individuals will be full-time, part-time, sole-traders and casual employees who have been with their employers for longer than 12 months and are at least 16 years of age.
    • New Zealand employees on the 444 visa will be eligible.
    • Temporary visa holders will be ineligible.
    • Employees that have applied for JobSeeker payment will need to notify their employers as an employee will only benefit from either, but not both, of the wage subsidy schemes.

Actions to take:

  • Provide information to the ATO on eligible employees.
  • Continue to provide information to the ATO on monthly basis including the number of employees employed by the business.
  • Ensure that each eligible employee will receive at least $1,500 per fortnight (before tax).

 


Disclaimer:
Please note that this article is intended to be a general guide only, and should not be seen to constitute legal or tax advice. Where necessary, you should seek a second professional opinion for any legal or tax issues raised in your personal or business tax affairs.

Emma Zhao

Emma Zhao

Chartered Accountant | Registered Tax Agent | SMSF Speacialist™ emma@sencilloaccounts.com.au