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 Jobseeker 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.
For a lot of businesses this will allow them to avoid standing employees down and allow them to continue to operate and be better positioned when we are on the other side of 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 establish if a business has either a 30% or 50% reduction in their turnover, most businesses would be expected to establish that their turnover has fallen in the relevant month or three months (depending on the natural activity statement reporting period of that business) relative to their turnover a year earlier. If a business was not operating a year earlier, or where the businesses turnover a year earlier was not representative of their normal or average turnover, the Tax Commissioner will have discretion to consider additional information showing that the business has been significantly affected by the impacts of COVID-19. 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 discretion to establish eligibility in specific circumstances for example, eligibility may be established as soon as a business has ceased or significantly curtailed its operations. 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
Additional information for employers can be found via these 2 links:
ELIGIBLE EMPLOYEES
Employees eligible for the wage subsidy include:
- Those who are currently employed by the eligible employer, which includes those stood down or re-hired,
- You need to have been employed by the employer at 1 March 2020,
- Are full time, part time or long term casuals. Casual employees are defined someone who is casually employed on a regular basis for longer than 12 months as at 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.
For eligible employees, who’s employers participate in the Job Keeper scheme, the payment will be received 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.
- Where an employee has been stood down, their employer must pay their employee, at a minimum, $1,500 each fortnight, before tax.
- Where an employee was employed on 1 March 2020, and subsequently ceased employment with their employer, and has since been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 each fortnight, before tax.
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 Payments. They will be required to provide monthly updates to the ATO. The first payment will be recieved in the first week of May 2020. Employers will be required to ensure eligible employees recieve $1,500 each fortnight, before tax as a minimum.
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. A declaration as to recent business activity will also need to be supplied. Payments will be made monthly to the nominated bank account. A monthly update will need to be supplied to the ATO to decare their continued eligibility for the payments.
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
