JobKeeper payments: What does it mean for you?

On Wednesday 8 April Federal Parliament has passed the Government’s $130 billion JobKeeper wage subsidy scheme, the largest financial lifeline package in Australia’s history.

More than 730,000 businesses have signed up for the scheme, which is expected to benefit six million workers.

The Federal Government is providing a wage subsidy to around 6 million workers who will receive a flat payment, through their employer, of $1,500 per fortnight before tax.

The payment will be open to eligible businesses that receive a significant financial hit caused by the coronavirus.

The payment will provide the equivalent of around 70 per cent of the national median wage.

For workers in the accommodation, hospitality and retail sectors it will equate to a full median replacement wage.

The payment will ensure eligible employers and employees stay connected while some businesses move into hibernation. This connection will enable business to reactivate their operations quickly – without having to rehire staff – when the crisis is over.

Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.

The first payment will be received by employers from the ATO in the first week of May and will be paid one month in arrears.

Please note that there may be technical changes to this advice as the legislation enacting this policy announcement is currently being written.

Treasury have provided a fact sheet here.

What do I have to do?

To receive reimbursement for the JobKeeper Payment, employers must:
  • Register an intention to apply on the ATO website and assess and provide supporting information that they have or will experience the required turnover decline
  • Provide information to the ATO on the number of eligible employees and provide monthly updates to the ATO
  • Notify all eligible employees that they are receiving the JobKeeper Payment (we suggest you provide this in writing)
  • Ensure that each eligible employee receives at least $1,500 per fortnight (before tax) as follows:
Employees currently working their full hours

Employees that were already receiving this amount from their employer, income will not change.

Employees that receive less than this amount, the employer will need to top up the payment to the employee to $1,500, before tax. There is no obligation to pay super on this additional payment.

Employees earning more than $1500, the employer will continue to pay their usual wage part of which will be the $1500 subsidy.

Employees who have not worked in the period since 1 March 2020

These employees may be employed but have had their hours reduced, stood down or have been rehired after termination or retrenchment.

They will be entitled to the minimum payment of $1500 per fortnight before tax.

There is no obligation for the employer to pay superannuation on these payments.

Employees who have been retrenched or made redundant may be rehired. The employee and employer will need to decide how paid out entitlements will be dealt with.

Eligible employers

Eligible Employers are businesses (including companies, partnerships, trusts, sole traders, not for profits and charities)
Your business will be eligible for the subsidy if:
  • Your business has a turnover of less than $1 billion and your turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or 
  • Your business has a turnover of $1 billion or more and your turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month); and
  • The business is not subject to the Major Bank Levy.

To find out more about eligibility, process, timing and how to apply, click here.

Frequently Asked Questions

Click here to download the Treasury's FAQ

Are sole traders who don’t have employees but pay themselves a dividend included?

Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment, provide that individual’s Tax File Number and provide a declaration as to recent business activity. 

People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payments will be made monthly.

Click here to access further information for sole traders.

Eligible employees

Eligible employees are employees who:
  • Are currently employed by the eligible employer (including those stood down or re-hired);
  • Were employed by the employer at 1 March 2020;
  • Are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months as at 1 March 2020);
  • Are at least 16 years of age;
  • Are 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
  • Are not a recipient of a JobKeeper Payment from another employer.

Flow of Credit

How do businesses cover wages in April, before the ATO pays in arrears in May, when they have no cash reserves?

The Federal Government have introduced the Coronavirus Guarantee Scheme which will encourage banks to provide concessional loans to SMEs. The load scheme will commence in early April.

Click here for more information on the Coronavirus SME Guarantee Scheme

Click here for more information on supporting the flow of credit

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