WEEKLY E-MAIL

14 April 2020

JOBKEEPER PAYMENT LEGISLATED

By Rebecca Lowe

On Wednesday night, the government legislated the proposed JobKeeper payment scheme in response to the Coronavirus pandemic, which is estimated to see up to six million workers eligible for a fortnightly payment. The JobKeeper payment is the most recent of the government’s $300 billion economic stimulus packages. It will be paid to businesses that have suffered a significant loss of revenue as a result of the pandemic, to help them restart when the crisis is over.

The fortnightly payment of $1,500 is the equivalent of around 70% of the national median wage.

Eligibility criteria

Both employers and employees must meet eligibility criteria to be eligible for the JobKeeper payment. The eligibility criteria for businesses (including companies, partnerships, trusts and sole traders) to apply for the payment are outlined below:

• The business has an annual turnover of less than $1 billion and has had a decrease in revenue of more than 30% over a comparable period (of at least a month) from a year prior
• The business has an annual turnover of $1 billion or more and has had a decrease in revenue of more than 50% over a comparable period (of at least a month) from a year prior

There are some businesses ineligible for the JobKeeper payment. These include the big banks required to pay the bank levy, the Australian government and its agencies, state and territory governments and their agencies, foreign governments and their agencies, companies that are in liquidation and partnerships, sole traders or trusts in bankruptcy.

For an employee to be eligible for the payment, they must:

• Be employed by an eligible employer as at 1 March 2020
• Are at least 16 years of age
• Are an Australian citizen, the holder of a permanent visa, a protection special category visa, a non-protected special category visa who has been residing continually in Australia for ten years or more, or a New Zealander on a special category (subclass 444) visa

Eligible employees include those working full-time, part-time, long-term casual and stood down employees. Casual employees are considered long-term if they are a recorded employee and have been regularly employed for at least 12 months up to 1 March 2020. Furthermore, an employee can be eligible for the payment, even if their employer let them go after 1 March 2020 and subsequently re-engaged them.

If an individual has multiple employers, only one entity can claim the JobKeeper payment on their behalf.

Also, an individual who receives the JobKeeper payment cannot receive the JobSeeker payment (formerly known as Newstart).

How the payment works

Eligible businesses will receive $1,500 per fortnight, for a maximum of six months. The fortnightly payment will be made for each eligible employee who remains an employee as at 1 March 2020, including employees who have been stood down as a result of business closures.

Eligible employees, for whom an employer receives a JobKeeper payment, must be paid a minimum of $1,500 per fortnight (pre-tax) by their employer. Therefore, some employees may receive more than their ordinary fortnightly wage under the JobKeeper payment.

During this time, employers must continue to pay superannuation guarantee (SG) contributions on regular wages for their employees. For employees who receive more than the ordinary fortnightly wage under the JobKeeper payment, SG contributions are not required to be paid on any amount above their usual fortnightly salary. It is at the discretion of the employer if they pay SG on this amount. Conversely, where an employee’s ordinary fortnightly wage is only partially subsidized by the JobKeeper payment, the employer is liable to pay SG on the full amount paid to the employee.

What to do next

Employers need to register interest to participate in the scheme via the Australian Tax Office and must supply supporting documentation to verify the business’ loss of income and employee arrangements.

Most employees are not required to do anything; they will receive a notification from their employer that they are receiving the JobKeeper payment. Employees in the following circumstances will have additional obligations:

• Employees with multiple employers must notify the employer that is their primary employer
• Employees that are not Australian citizens must notify their employer of their visa status, to allow their employer to determine if they are an eligible employee

Payments will be made monthly in arrears, and businesses can expect to start receiving JobKeeper payments in the first week of May.

Rebecca Lowe
Senior Para-Planner
Authorised Representative No. 453075

If you have any questions or comments, please email me at rebecca@gfmwealth.com.au

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