On Monday PM Scott Morrison announced a new $130b wage subsidy scheme to support employees and business owners. The new JobKeeper payment will help businesses cover the costs of their employees’ wages for up to 6 months, enabling more people to continue to earn an income during this economic downturn. The overall goal of the scheme is to facilitate a stronger, faster economic recovery for Australia after the Coronavirus crisis passes.

Under the new scheme, the government will pay eligible employers $1500 per eligible employee per fortnight for up to 6 months, which the employer is then required to pass on to employees. The $1500 is a flat rate for each employee regardless of their usual earnings, and is based on 70% of the current median wage in Australia.

Sole traders, self-employed workers and not for profit entities who meet the eligibility criteria outlined below are also included this scheme.

Eligible employers

Businesses will be eligible to claim the JobKeeper subsidy if:

• they have had business turnover reduced by at least 30 percent compared to a similar period 12 months ago, for businesses with a turnover of less than $1 billion; or
• they have had business turnover reduced by at least 50 percent compared to a similar period 12 months ago, for businesses with a turnover of more than $1 billion; and
• their business is not subject to the Major Bank Levy.

Eligible employees

Employees eligible for the JobKeeper payment are employees who meet all the following criteria:

• are currently employed by the eligible employer (including those who have been stood down and subsequently rehired);
• were employed by the employer at 1 March 2020;
• are full time, part time, or a long-term casual who has been employed by the business on a regular basis for more than 12 months;
• are at least 16 years old;
• are an Australian citizen or the holder of an eligible Visa; and
• are not receiving the JobKeeper payment from another employer.

How it will work

To receive the JobKeeper payment, employers must register an intention to apply on the ATO website. The link below will take you directly to the page. TJL recommends that all businesses who have been or will be impacted by a downturn should register at your first opportunity, to ensure you receive all updates and information.

https://www.ato.gov.au/general/gen/JobKeeper-payment/?=redirected_JobKeeper

Employers will need to provide information to the ATO on their eligible employees, including those who have been stood down and then rehired. The ATO will assess that the business has or will experience the required decline in turnover and will then make the JobKeeper payments to eligible businesses from the first week of May, with payments to be backdated to 30 March 2020.

Employers will need to notify employees that they are receiving the JobKeeper payment and ensure that each employee is paid the full $1500 per fortnight. Workers who previously earned less than $1500 per fortnight will still receive the full $1500 under this new scheme. For workers who usually earn greater than $1500 per fortnight, employers can provide additional wages on top of this subsidy.

This is the third and largest package the Government has announced in response to the Coronavirus, and it is estimated that up to 6 million Australians will qualify for the payment. If you would like further information on the payment or have any other questions, please don’t hesitate to contact our office on (02) 6554 9511 or your Manager on their mobile or email.