JobKeeper Payment: Government introduces wages subsidy for employers
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On 30 March 2020, the Government announced that employers hit by the Coronavirus outbreak will have access to a fortnightly wage subsidy of $1,500 per eligible employee for up to 6 months. This measure seeks to preserve existing employment relationships so that businesses can quickly resume normal operation once the crisis is over.
Eligibility
In order to be entitled to the JobKeeper Payment, employers and employees need to satisfy the following criteria.
Eligible employers include
- small businesses with an annual turnover of less than $1 billion who have seen or expect to see their turnover reduced by more than 30 percent (year-on-year) for at least a month;
- businesses with an annual turnover of $1 billion or more who have seen or expect to see their turnover reduced by more than 50 percent (year-on-year) for at least a month; and
- Not-for-profit entities (including charities) and self-employed individuals that meet the turnover tests that apply for businesses.
Employers will be able to receive a $1,500 fortnightly subsidy for each employee who
- was employed by the business as at 1 March 2020 and continues to be engaged by the eligible employer (including those stood down or re-hired);
- is at least 16 years of age;
- is a full-time, part-time, or long-term casual (a casual employed on a regular basis for at least 12 months as at 1 March 2020);
- is an Australian citizen, a permanent resident or the holder of one of the eligible visas; and
- is not receiving a Jobkeeper Payment from another employer. Those with multiple jobs have to notify their primary employer to access the JobSeeker Payment on their behalf.
Moreover, a person receiving the JobKeeper Payment will not be eligible to claim the JobSeeker Payment.
Application
Eligible employers need to register their interest in participating in the scheme and make an online application on the Australian Taxation Office (ATO) website. Apart from identifying eligible employees, participating business also will need to provide supporting evidence to prove that the eligibility criteria are met and provide monthly update to the ATO to declare their continued eligibility for the subsidy.
Payment process
Once approved, ATO will handout the subsidy monthly in arrears to employers who will then pay their employees as usual. The first payment is due to be received by employers in the first week of May.
Employers need to notify all eligible employees on whose behalf the JobKeeper Payment were claimed and pass on the subsidy in full as follows.
- For employees who have been stood down, re-hired, or are normally paid less than $1,500 per fortnight before tax, employers must pay them a minimum of $1,500 per fortnight.
- Employees who are normally paid more than $1,500 per fortnight before tax will receive $1,500 per fortnight from the subsidy, with any outstanding wages (i.e. the amount above $1,500) being paid according to their prevailing workplace arrangement.
Employers must continue to pay superannuation on regular wages, but may decide whether to pay superannuation on any additional wage paid because of the subsidy.
For more details of the JobKeeper Payment, click here.
In a time of great uncertainty, it is crucial to seek expert advice and assistance to navigate the unfolding coronavirus pandemic. The team at Collins Wentworth are experienced in business financial matters. If you have concerns about the financial position of your business and wish to know more about how we can assist you, contact us today.
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