Forced closures, travel restrictions, and other phenomena designed to promote social distancing have impacted Australian businesses following the outbreak of coronavirus disease 2019 (COVID-19). In an effort to promote staff retention, the Australian government has introduced the JobKeeper Payment scheme. In this article, we outline the key elements of the program, including eligibility criteria and the application process.
1. What is the JobKeeper Payment?
The JobKeeper Payment is a temporary governmental intervention designed to help businesses weather the effects of COVID-19. It entails biweekly wage subsidies worth A$1,500 (before tax) per eligible individual. These should help businesses retain their staff and remain viable.
Businesses with employees can claim these payments on behalf of their workers for a maximum of six months as of 30 March 2020. Those without staff, such as the self-employed, are also able to access this form of assistance during the same time period.
2. Who is eligible for the JobKeeper Payment?
The government has set forth two key sets of eligibility criteria: those that apply to employers, and those that apply to employees. Claimants need to satisfy all of the applicable below-mentioned criteria in order to be eligible for the JobKeeper Payments.
Criteria for employers:
Employers will be able to successfully claim JobKeeper Payments, provided that their business:
- has a turnover below A$1 billion that has shrunk by over 30 percent (of at least one month), or
- has a turnover of at least A$1 billion that has dropped by over 50 percent (of at least one month), and
- is not subject to Australia's Major Bank Levy.
Based on their natural activity statement reporting period, businesses will need to prove that their turnover has been reduced in the applicable one or three months, relative to their turnover during the previous year.
In instances where businesses have been operational for less than a year, or where their earlier turnover is not indicative of their standard turnover, cases will be referred to the Tax Commissioner for consideration. The same applies to businesses that anticipate a reduction of at least 30 or 50 percent in their turnover, despite seeing a slightly lower drop than these benchmarks.
Note that not-for-profit entities, as well as those without employees (such as self-employed individuals), will also be eligible for the JobKeeper Payments on condition that they meet the turnover requirements.
Criteria for employees:
Employees may receive the JobKeeper Payments from their employers, provided that they:
- are at least 16 years old.
- are currently working for the claimant (this includes staff members who have been stood down).
- were engaged in an employment relationship with the claimant on 1 March 2020.
- occupy full-time or part-time positions, or have been regularly employed on a casual basis for at least 12 months as of 1 March 2020.
- are Australian citizens or holders of permanent or Special Category visas, whether protected, non-protected, or Subclass 444. Note that those who hold non-protected Special Category visas must have resided in Australia continually over the last ten or more years.
- do not receive JobKeeper Payments from other employers.
3. How will the subsidy affect current payment agreements?
Owning to the JobKeeper Payment, all eligible employees will receive at least A$1,500 per fortnight before tax. This includes individuals who typically earn less than this amount, as well as workers who have been stood down.
In instances where staff members earn more than A$1,500 (pre-tax) per fortnight, the JobKeeper Payment will act as a partial subsidy, and employers will be required to pay out the difference.
Employers can choose whether to pay superannuation on additional wages that are distributed due to the JobKeeper Payment.
4. How can the JobKeeper Payments be accessed?
From 30 March 2020, businesses with employees must visit the Australian Taxation Office's website to register their interest in applying for the subsidy. Thereafter, they will receive an application form which should also be completed online.
Since JobKeeper Payments will be issued to employers, staff members need not apply for the subsidy. However, they should note the following:
- Those who work for multiple employers will be required to notify their primary employers of their interest in the subsidy.
- Workers who are not Australian citizens will need to inform their employers of their current visa status, which will be used to determine their eligibility for the subsidy.
- Individuals who have applied for or are in receipt of income support must notify Services Australia that they are due to receive the JobKeeper Payments. This, in turn, could affect their eligibility for continued support.
Businesses without employees should also register their interest in applying for the subsidy. During the process, they will be required to provide business-related information, including details about their recent turnover. The JobKeeper Payments will be made directly into successful claimants' bank accounts.
Note: All businesses will be required to furnish the Australian Tax Office with monthly updates in order to avoid the misappropriation of funds.
5. When will the JobKeeper Payments be made available?
Candidates can register their interest from 30 March 2020. The initial batch of payments will be made during the first week of May. Note that employers will be paid monthly in arrears.
What is the JobKeeper Payment?
The JobKeeper Payment is a temporary scheme that has been instituted by the Australian government. It is intended to support businesses with and without employees in instances where the business's turnover has been significantly reduced following the outbreak of the coronavirus (COVID-19). Affected individuals will receive at least A$1,500 (pre-tax) every fortnight.
What happens if my employees earn more than A$1,500 per fortnight?
Employees who earn more than A$1,500 (pre-tax) per fortnight will be entitled to their usual pay. In other words, the JobKeeper Payment will serve as a partial wage subsidy, and employers will be required to pay the difference.
What happens if my employees earn less than A$1,500 per fortnight?
In that case, employees will be entitled to the full JobKeeper Payment of A$1,500 (pre-tax) per fortnight.
Are stood down workers eligible for the JobKeeper Payment?
Yes, provided that they were employed by the business on 1 March 2020 and that they meet the other eligibility criteria.
Do recipients of the JobKeeper Payments need to notify Services Australia?
Yes. This could affect eligibility for other support from Services Australia, such as the JobSeeker Payment and Coronavirus Supplement.