The Federal Government have announced their third stimulus package which provides a wage subsidy to around 6 million workers of $1,500 per fortnight. Called the “Jobkeeper,” payments will be available for eligible employees where their employers business has suffered 30% decline in Revenue
Employers will need to register and provide employee details to the ATO which will be matched with Single Touch Payroll data to pre-populate employee details for each business.
Claiming employers will be required to pay their employees and will then be reimbursed by the ATO. The wage subsidy will continue for 6 months.
ELIGIBLE EMPLOYERS & EMPLOYEES
Small and medium business Employers will be eligible for the wage subsidy if their turnover will be reduced by more than 30% to a comparable period a year ago (of at least one month). The logistics of this calculation requires clarification but the spirit is clear, well intentioned and will be a huge boost to small and medium business, especially if they are currently suffering forced closure!
Eligible employees are as follows:
- Employed by an eligible employer as per above (including employees stood down and re-engaged and paid hired) as at 1 March 2020
- They are full time, part-time and if casual, they have been employed on a regular basis for longer than 12 months at 1 March 2020
- 16 years old or over
- An Australian citizen, holder of a permanent visa, 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.
- If an eligible employee is paid less than $1,500 they still qualify however the fortnightly pay must be increased to the $1,500. This is most relevant to the part time and casual staff members. Note, the employer therefore pays the $1,500 and then receives it back.
Employees will be required to be in an employment relationship with their relevant employer at 1 March 2020. The employer will pay the employees during March and receive their first re-imbursement (including back pay) in the first week of May and fortnightly thereafter.
It’s noteworthy employees that were engaged on 1 March but have subsequently been stood down, also qualify. This is an attempt to retain the connection between the employer and staff member.
If the employee has received Jobseeker assistance, they are ineligible for Jobkeeper.
Employees who have multiple employers, must choose their primary employer.
Eligible employers include companies, partnerships, trusts, sole traders and self-employed business owners. Self- employed owners will need to provide the ATO their business ABN, nominate the individual receiving the payment (with their TFN) and provide a declaration of recent business activity.
NOTE the payment to the employee does not need to attract SGC.
WAGE SUBSIDY APPLICATION
The application of the Jobkeeper subsidy can be done by clicking here. The ATO will issue further updates following registration using the link above.
Confirming, the Jobkeeper payment will be paid to employers for up to six months, for each eligible employee that was employed from 1 March 2020 and continues to be for that period.
This is a major announcement and will provide a VITAL lifeline to affected businesses. It is a rare occasion where “TOO GOOD TO BE TRUE DOES NOT APPLY.”
Should you require any further information or help with any of the above, please contact our accounting and business consultant team.