The JobKeeper subsidy has been designed to support businesses that have been significantly affected by COVID-19 and to ensure that more Australians maintain employment. An eligible employee will receive $1,500 a fortnight from 30 March 2020 until 27 September 2020. Both the employer and employee need to satisfy eligibility criteria throughout the period to receive the payments. The JobKeeper payment is a reimbursement scheme and the employer will be required to pay their employee $1,500 each fortnight and will then be reimbursed by the ATO.
An eligible employer is an employer who:
- as at 1 March 2020, carried on a business in Australia or was a non-profit entity carrying on its objectives principally in Australia;
- has had a decline in Australian turnover as disclosed in BAS (applies to taxable sales and GST free sales only);
- has chosen to take part by the end of each fortnight (employers have until 30 April 2020 (time has been extended) with respect to the fortnight that ended on 10 April 2020);
- has notified the ATO at or before that time that it elects to participate; has given information in the approved form to the ATO on eligibility and the employee.
- provides ongoing data to the ATO for eligible employees (per fortnight) and turnover (actual and projected) (monthly).
- Eligible employee’s need to have been paid a minimum of $1,500 gross in each fortnight commencing in April 2020.
- The turnover test sets out that an employer will be eligible if:
- their business has a turnover of less than $1billion and their turnover has fallen by more than 30% (of at least a month); or
- their business has a turnover of $1billion or more and their turnover has fallen by more than 50% (of at least a month); or
- If the entity is a charity registered with the ACNC (excluding certain education providers), the employer’s projected GST turnover is at least 15% less than current (actual) GST turnover for the relevant comparison period.
- If there is not a relevant comparison period the alternative test will apply.
- Businesses can nominate an individual who is not an employee of the business and who is actively engaged in the business to receive the payment. The following people can be nominated:
- self-employed individuals – the individual;
- a partnership – one partner who is actively engaged in the business;
- a trust – one individual adult beneficiary of the trust; and
- companies – one company director or shareholder.
An eligible employee is one who is:
- on the employer’s books as at 1 March 2020 and continues to be engaged by the employer;
- full-time, part-time, long term casual (ie. casual who has been employed on a regular and systematic basis for more than 12 months) and employees that have been stood down;
- an employee that was re-engaged by a business that was their employer on 1 March 2020;
- an Australian citizen, a permanent resident or a Special Category (Subclass 444) Visa Holder;
- not receiving a JobKeeper payment from another employer;
- not receiving paid parental leave or dad and partner pay from the Government; and
- not receiving workers compensation for total incapacity for work in that fortnight
Apprentices and Group Training Organisations
- Apprentices and trainees are eligible for the JobKeeper payment if they meet all of the eligibility requirements.
Employers are not able to claim the JobKeeper payment and the Supporting Apprentices and Trainee wage subsidy for the same period of time.
An employer is required to pay an eligible employee the following (whichever is greater):
- a minimum of $1,500 per fortnight; or
- the amount payable to the employee for the performance of work/leave taken during that particular fortnight.
Taxation and Superannuation
- Income tax will apply to the $1,500 payment that your business receives.
- Regular superannuation obligations will apply where an eligible employee is paid more than $1,500 per fortnight. This payment of super will be required to be paid on top of the JobKeeper payment.
- For employees who are regularly paid less than $1,500 per fortnight, eligible employers will have the discretion as to whether they pay superannuation on any additional wages the employee will receive as a result of the JobKeeper subsidy.
If you have any further enquiries relating to the JobKeeper Stimulus Package please contact us by telephone on 1300 361 099 or by email at law[email protected].