This new response to the Coronavirus was announced on 30 March in an attempt to save jobs of people who might have otherwise been stood down or even lost their jobs already. It also goes further, to cover those self-employed who don’t employ, as well as employers with employees who have been stood down without pay.
The new payment amounts to $1,500 per employee per fortnight. The JobKeeper payment is a taxable payment and could affect eligibility for other payments from Services Australia.
To be eligible businesses with turnover of less than $1 billion will have their turnover reduced by more than 30% or, if over $1 billion will have their turnover reduced by more than 50%. The business must also not be subject to the Major Bank Levy
Not for profit entities and self-employed individuals that meet the turnover tests are also eligible to apply.
Eligible employees are those currently employed by the employer or recently stood down, and who were employed by the employer at 1 March 2020. These include full time, part time and long-term casuals (regularly employed on a regular basis for longer than 12 months at 1 March) and who are at least 16 years old.
You need to be Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder.
Note: You should not be in receipt of a JobKeeper Payment from another employer. So, each individual can only receive one JobKeeper Payment.
- Register an intention to apply on the ATO website and assess that they have or will experience the required turnover decline.
- Provide information to the ATO on eligible employees. This includes information on the number of eligible employees engaged as at 1 March 2020 and those currently employed by the business (including those stood down or rehired). For most businesses, the ATO will use Single Touch Payroll data to pre-populate the employee details for the business.
- Ensure that each eligible employee receives at least $1,500 per fortnight (before tax). For employees that were already receiving this amount from the employer then their income will not change. For employees that have been receiving less than this amount, the employer will need to top up the payment to the employee up to $1,500, before tax. And for those employees earning more than this amount, the employer is able to provide them with a top-up.
- Notify all eligible employees that they are receiving the JobKeeper Payment.
- Continue to provide information to the ATO on a monthly basis, including the number of eligible employees employed by the business, so up to date record keeping is essential.
How to Apply
Initially, employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020. Subsequently, eligible employers will be able to apply for the scheme by means of an online application. The first payment will be received by employers from the ATO in the first week of May.
Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via ato.gov.au from 30 March 2020. Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.
As with eligible employers, people who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.
Tax and Superannuation aspects
The payments received are taxable payments and will need to be recorded as income. If the employee earns less than $1,500 per fortnight then their pay will need to be increased to this figure. There is no obligation to pay Superannuation on the additional top up, amount. If the employee earns more than $1,500 per fortnight they should be paid as normal with the usual Superannuation obligation.
With employees who have been stood down without pay, the employer can register them for the payment and the $1,500 will be received by the employer and paid over to the employee. There is no obligation to contribute Superannuation on this payment. If the employee has started receiving income support payments like the JobSeeker Payment, they will need to advise Services Australia of their new income.