COVID-19 | JOBKEEPER PAYMENTS & ELIGIBILITY
Apply online from 20th April 2020
Jobkeeper, a well-received wage subsidy programme by the Australian Federal Government, is aimed at combating the worst of the economic and social effects of COVID-19 while preserving the relationship between employer and employee. It was passed into law on 8th April 2020.
This wage subsidy programme, as opposed to other benefits such as JobSeeker, focuses on continuing the link between employers and employees – even if they have been stood down or made redundant in recent weeks due to COVID-19 – with the aim that this will bring a swifter recovery and lower unemployment rate in the coming months.
At $1,500 per employee per fortnight before tax, the wage subsidy is substantial and whilst there are some mumblings around some casuals and some temporary visa holders who are not eligible, it is welcome news for most.
As a business, you can apply online via the ATO portal here from 20th April 2020. You may have already registered your business to receive updates prior to this, but the full application form must be completed from 20th April to receive payments.
The employer pays wages to employees in their usual cycle, at either:
$1,500 per fortnight if an employee earns at or less than this, or
the employee’s usual wage/salary if above $1,500 per fortnight. You must continue to pay them their usual pay, with the business receiving a subsidy of $1,500 per fortnight towards their pay.
Superannuation is due on regular wages/salary, but an employer can decide if they wish to pay the additional Super for an employee who is receiving more than they normally do (i.e., they normally earn $1k per fortnight, but are now receiving the minimum $1.5k per fortnight subsidy).
Note: if an eligible employee earns less than $1,500 a fortnight, a business must still pay $1,500 per fortnight as the minimum. This equates to approximately 70% of the national median wage.
Business eligibility
The ATO make wage subsidy payments directly to businesses, monthly in arrears from early May, for a maximum of six (6) months, if eligible. It is important, as an employer, that you work closely with your Accountant or with our HR Unplugged team to ensure that:
Your business has applied for the Jobkeeper payment via the ATO portal from 20th April; and
You meet the eligibility criteria at date of application as a business with 30% reduction in business from the previous comparable year, if your turnover is less than $1bn. This moves to 50% if you have a turnover above $1bn. Registered charities only need to meet a 15% reduction threshold to be eligible. The turnover calculation for these purposes is based on GST turnover **
** Please note that you only need to meet the turnover reduction criteria once at time of application, although there are monthly reporting requirements.
If you do not meet this eligibility, then given the ATO payment is made monthly in arrears, you may find your business paying employees expecting to get the Jobkeeper payment and falling short. This could impact your cashflow and need to make difficult HR decisions fast.
Equally, your company may not be eligible in the first month, but you may be eligible the next month depending upon business percentage reduction.
Employee eligibility
The ATO will only make payments to employees within your business that meet eligibility criteria, namely:
Permanent full-time or part-time employees or casual employees with over 12 months regular service, or sole traders, as of 1st March 2020
Public servants are not eligible
Employees over 16 yrs of age
Employees who are an Australian citizen, sub-class 444 visa holder (most New Zealanders), permanent visa holder, or a protected SCV or non-protected SCV residing in Australia for 10 yrs or more
You must also advise your eligible employees if you are intending to nominate them for the JobKeeper payment using the ATO-provided notice, which they sign and return to you. You can find this nomination notice here.
There will be some casuals and some temporary visa holders that will miss out.
Your employees may have already applied for other Government assistance, such as JobSeeker. They should not withdraw these applications, as the Government has clearly stated that they will work out which is the relevant payment for your employees to receive. Note the JobKeeper payment is only for a period of (6) months.