The Federal Government has announced a large scale wage subsidy scheme called Jobkeeper. Notwithstanding the previous two rounds of stimulus and business assistance this is, by far, the largest direct stimulus measure announced in Australia since the COVID-19 pandemic reached our shores.
There is a lot of information and disinformation circulating in relation to eligibility and access to this program. We provide the following analysis to cut through the confusion.
If you still have questions after you have had the opportunity to review the information below please do not hesitate to contact us.
The Jobkeeper Scheme is a $130b program costed to run for 6 months. Its objective is to assist employers retain and pay their staff during the worst of the COVID-19 crisis.
The objectives extend beyond staff retention but to also ensure that employers and employees remain connected throughout a period of prolonged downturn to maximise the chances of a quick recovery when the worst of the crisis passes.
The scheme is extensive and will cover full-time, part-time, long-term casual employees as well as those that have been stood down. Sole traders will also be able to access the scheme.
We do not expect to see draft legislation until later in the week and there will undoubtedly be some fine tuning in relation to eligibility and access. The information provided below is based on communications by Treasury as of 31 March, 2020.
REDUCTION IN TURNOVER
For our clients, those turning over < $1b, eligibility will be based on a reduction in turnover of 30% or more relative to the same period a year ago. The comparison period must be of a duration of at least a month. Clearly many businesses will meet this criteria. We expect that a high proportion of businesses within industries such as hospitality, tourism, retail and those that support these industries would be eligible. But there are many industries extending beyond these that have suffered significant downturn as a result of reduced consumer and corporate demand.
It is important to note that like all the stimulus measures thus far there will be integrity measures built into the legislation to ensure that there are significant consequences for any employer manipulating their books to become eligible.
Businesses that have experienced the 30% (or 50%) reduction in turnover can receive a subsidy payment for each employee that meets the following key criteria:
Any employee currently receiving income support through Services Australia that becomes a recipient of the Jobkeeper payment will need to advise Services Australia of the income you are receiving under the Jobkeeper scheme. This may reduce or negate your entitlement to ongoing income support through Services Australia.
Self-employed individuals will also be able to access the Jobkeeper payment as long as they are able to demonstrate the reduction in turnover detailed above.
Unlike the previous stimulus and business assistance measures Employers will have to apply to participate in the scheme. The application process will be handled by the Australian Taxation Office. The application will involve the provision of supporting information to prove the business satisfies the downturn requirement.
You can register your intention to apply for Jobkeeper through here
After registering your interest, the ATO will notify you once applications open.
It goes without saying that we are happy to assist any of our clients in regard to the registration or application process.
Eligible employers will receive $1,500 per fortnight for each eligible employee from 30 March, 2020. Payment will be made monthly in arrears by the ATO which means that employers have to make the payment first and then be reimbursed.
Employer obligations to distribute this money to eligible employees is as follows :
The first of the above points highlights that many casual and part-time employees will actually receive more than they were receiving previously. In addition this point highlights that employers are simply a conduit for this Jobkeeper payment and must pass it on in full to their eligible employees.
The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.