JobKeeper Payments

7 Apr

The government has introduced a wage subsidy program called “JobKeeper Payments” to cover the costs of a business’ wages so that more employees retain their jobs continuing to earn an income.

Brief

The government will reimburse employers $1,500 per fortnight per employee, from 30 March 2020 until 27 September 2020.
First payment will be received in the first week of May and will be made by the ATO monthly in arrears.
The ATO have noted that the Jobkeeper payment is a reimbursement scheme. In cases where this presents cashflow difficulties, employers may want to speak to their bank to cover the first month of payments.

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Eligibility

For an employer to be eligible for the JobKeeper subsidy, they must prove that

Their business has experienced (or is likely to experience) a drop in turnover of 30 per cent or more when compared to a corresponding period a year earlier (a drop in 50% for businesses with an annual turnover of $1 billion)
Their business is not subject to the Major Bank Levy

Establishing a drop in turnover of 30%

Turnover is defined according to the current calculation for GST purposes as reported on the BAS
- Includes all taxable supplies and all GST free supplies
Must be shown that turnover has (or will likely) fall in the relevant month or quarter (depending on their BAS reporting period) relative to turnover in a corresponding period a year earlier
ATO will provide more guidance on the self-assessment of actual and anticipated falls in turnover
For businesses not in operation a year earlier (or where turnover a year earlier is not representative of usual turnover), the Commissioner will use discretion to consider additional information to prove that the business has been severely impacted as a result of the Coronavirus
If a business does not meet the turnover test at the start of the scheme on 30 March 2020, they can start to receive the payment at a later date when the turnover test has been met (but this will not be backdated).

Eligible employers

As previously notified, the first step requires employers to register their interest for the JobKeeper subsidy
Subsequently, employers will need to elect to participate in the scheme and apply by means of an online application, the means of which will be released by the ATO in due course (registering your interest will allow you to keep up-to-date on the application process)
The ATO will then require businesses to provide supporting documentation that demonstrates the required turnover decline and the details of all eligible employees engaged as at 1 March 2020 (the ATO will use Single Touch Payroll (“STP”) data for most businesses to cross check information)
If a business elects to participate they must include ALL eligible employees
The employer must notify all eligible employees that will be receiving the JobKeeper payment
The employer is only entitled to the subsidy provided that each eligible employee receives at least $1,500 per fortnight (before tax)
The first payment period covered by the scheme starts on Monday 30 March 2020 and ends on Sunday 12 April 2020
Payments should be made via the STP system to validate the claim with the ATO (a manual claim process will be available if you do not report via STP)
The employer will need to continue to provide information to the ATO on a monthly basis.

Eligible employees

Full-time, part-time, long-term casuals (including those stood down or re-hired) as at 1 March 2020 (and continue to be employed by the business)
- Casual employees are those who have been employed on a regular and systematic basis for at least 12 months as at 1 March 2020
Must be an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder as at 1 March 2020
Must be a resident for Australian tax purposes on 1 March 2020
Must be at least 16 years of age as at 1 March 2020
Must not be in receipt of a JobKeeper payment from another employer

Employees receiving Parental Leave from Services Australia will not be eligible for the JobKeeper payment

Employees receiving workers compensation are only eligible for JobKeeper payments if they are working (for example, on reduced hours).

Eligible self-employed and other business owners

Self-employed individuals (businesses without employees) are also eligible to receive the JobKeeper payment where they meet the relevant turnover test as outlined above.
If your business is a partnership, only one partner can be nominated to receive a JobKeeper payment along with eligible employees;
If your business is a trust and where beneficiaries of a trust only receive distributions (rather than a salary or wage), only one individual can be nominated to receive a JobKeeper payment along with eligible employees;
If you are a shareholder and receive a payment for work in the form of dividends, only one shareholder can be nominated to received the JobKeeper payment.
If you are a company director that receives director fees, only one person in director capacity can be nominated to receive the payment.