Are you eligible for a JobKeeper Subsidy? From 30 March 2020 Australian businesses impacted by COVID-19 who have or expect to experience a decrease in turnover of 30% if your turnover is less than $1 billion, will be eligible for $1,500 jobkeeper subsidy per fortnight for each eligible employee payment. Under the JobKeeper Payment, impacted businesses will be able to access a JobKeeper subsidy to continue paying their employees. Employers will be able to claim the fortnightly payment of $1,500 per eligible employee for a maximum period of 6 months as a job seeker subsidy.
This will help many businesses keep their employees on board, continue operating, and emerge stronger once we move past COVID-19.
ELIGIBLE EMPLOYERS
Eligible employers to receive the $1,500 fortnightly payments include:
- Businesses with a turnover of less than $1 billion that have a reduction in revenue of 30% or more since 1 March 2020.
- Businesses with a turnover of $1 billion or more that have a reduction in revenue of 50% or more since 1 March 2020.
- Businesses that are subject to the major bank levy – Commonwealth, ANZ, NAB, Macquarie and Westpac are excluded.
To determine whether a business has experienced a 30% or 50% drop in turnover, most businesses will need to show that their revenue has declined during the relevant month or three-month period (based on their usual activity statement reporting cycle) compared to the same period a year earlier. If the business wasn’t operating a year ago or if its turnover from that time doesn’t reflect its typical or average revenue, the Tax Commissioner may use discretion to consider other evidence demonstrating that COVID-19 has significantly impacted the business. Some examples the Tax Commissioner might consider is where a business is newly establish, where there was a large interim acquisition, or where a businesses turnover is typically highly variable.
The Tax Commissioner will have the discretion to determine eligibility in specific cases. For example, a business may be deemed eligible as soon as it ceases operations or significantly scales them back. The Govt has stated there will be some tolerance where employers, in good faith, estimate a greater than 30% (or 50%) fall in turnover but actually experience a slightly smaller fall.
It is a legal requirement for employer to pass the subsidy onto eligible employees.
If you are eligible or may be, or even if you are uncertain, we encourage businesses to register their business with the ATO using this link: https://bit.ly/3dEXryp
ELIGIBLE EMPLOYEES
Employees eligible for the wage subsidy include:
- Anyone currently employed by an eligible employer, including those who have been stood down or re-hired.
- Must have been employed by the employer as of 1 March 2020.
- You must be a full-time, part-time, or long-term casual employee. Casual employees are defined as those who have worked on a regular basis for more than 12 months as of 1 March 2020.
- Be at least 16 years of age,
- Be an 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,
- And not in receipt of a JobKeeper Payment from another employer.
Please note, employees who receive the JobKeeper Payment, will need to report their JobKeeper Payment as income.
Additional information is available https://bit.ly/2X8uVQ1
TIMING
The payment will commence from 30 March 2020. The first payments will be recieved by employers in the first week of May 2020. Businesses will be able to register their interest in participating for the JobKeeper Subsidy via the following link: https://bit.ly/3dEXryp
PAYMENT PROCESS
Eligible employers will receive $1,500 each fortnight per eligible employee. Eligible employees will receive at a minimum $1,500 per fortnight, before tax. Employers are able to top up the payment.
Eligible employees whose employers participate in the JobKeeper scheme will receive the payment as follows:
- Employees who would normally receive $1,500 or more per fortnight before tax of income, will continue to receive their regular income according to their workplace arrangements. The JobKeeper Payment will assist their employer by subsidising some or all of the income.
- Employees who ordinarily receive less than $1,500 in income each fortnight before tax, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- Employers must pay stood-down employees at least $1,500 before tax each fortnight, as part of the JobKeeper scheme. This ensures employees continue to receive financial support, even if they are not currently working.
It will be at the employers discretion if they will pay superannuation on any additional wage paid because of the JobKeeper Payment. The ATO will make payments to the employer on a monthly in arrears basis.
HOW TO APPLY
Businesses with employees
Employers can register their interest in applying for the JobKeeper Payment. Eligible employers can apply via an online application, they will need to identify eligible employees for the JobKeeper Subsidy Payments. Employers must provide monthly updates to the ATO as part of the JobKeeper scheme. The first payment will be made in the first week of May 2020. To comply with the scheme, employers need to ensure that eligible employees receive at least $1,500 before tax each fortnight.
Businesses without employees
Self-employed business owners can register their interest in recieving the JobKeeper Payments. You will need to provide your ABN, nominate an individual to recieve the payment and provide the same individual’s Tax File Number. Employers will need to provide a declaration of their recent business activity. Payments will be deposited monthly into the nominated bank account. To confirm their ongoing eligibility, employers must also submit a monthly update to the ATO.
FURTHER ASSISTANCE
To find out more about further assistance for Coronavirus please visit our COVID-19 (Coronavirus) Resource Hub.
The dedicated team at Wardle Partners Accountants & Advisors are hear to answer your queries and support you, especially in these uncertain times. If you have any questions please do not hesitate to contact our team via support@wardlepartners.com.au
