The JobKeeper Payment, a temporary scheme open to businesses impacted by the coronavirus, has raised many questions. Here we seek to answer the most frequently asked:
What is the JobKeeper Scheme?
Businesses impacted by COVID-19 may be able to access a subsidy, called the JobKeeper payment, in order to continue paying their employees.
What is the JobKeeper payment?
The government will provide eligible employers with a fortnightly payment of $1,500 for each eligible employee.
How long will the scheme last?
The scheme will start on 30 March 2020 and will end on 27 September 2020.
Which employers are eligible for the JobKeeper Payment?
An employer will be eligible for the JobKeeper payment if it:
- carries on business in Australia or, if it is a not-for-profit, it pursues its objectives principally in Australia; and
- satisfies the relevant “decline in turnover test”.
Employers excluded from the scheme include government agencies, local governing bodies and entities which have had a liquidator appointed.
What is the decline in turnover test?
Employers will satisfy the decline in turnover test if:
- their business has an aggregated turnover of less than $1 billion and they estimate their GST turnover has fallen or will likely fall by 30% or more compared to the same month or quarter in 2019;
- their business has an aggregated turnover of $1 billion or more and they estimate their GST turnover has fallen or will likely fall by 50% or more compared to the same month or quarter in 2019; and
- it is an ACNC registered charity (but not a university or a school) and it estimates its GST turnover has or will likely fall by 15% or more compared to the same month or quarter in 2019.
Self-employed individuals that meet these turnover tests are also eligible.
What if a business was not in operation a year earlier?
If a business was not in operation a year earlier, or where its turnover a year earlier was not representative of its usual or average turnover, the Tax Commissioner has a discretion to consider additional information that the business can provide to establish that it has been adversely affected by the impact of COVID-19.
Who are eligible employees?
The JobKeeper payment will only apply to eligible employees of an eligible employer.
Eligible employees are:
- employed by the eligible employer as at 1 March 2020 (including those who have been stood down and re-hired);
- 16 years and over as at 1 March 2020;
- a full time, part time or long term casual employee (ie: casuals employed by the entity on a regular and systematic basis for at least 12 months);
- not receiving JobKeeper payments from another employer;
- Australia citizens, permanent residents or holders of certain visa types; and
- resident for Australian tax purposes as at 1 March 2020.
What is the wage condition?
Before employers can claim the JobKeeper payment, they must have already paid their eligible employees at least $1,500 per fortnight. This is known as the wage condition. It means that if an employee usually earns less than $1,500 per fortnight, the employer must start paying that employee $1,500 per fortnight. This condition is likely to cause great difficulty to many employers who have already stood staff down and cannot afford to start paying their employees $1,500 in advance per fortnight.
When will employers receive the JobKeeper payment?
The first payments will be made to employers in the first week of May and will be backdated to 30 March. Thereafter, the ATO will make all payments to employers monthly in arrears.
What if you don’t meet the turnover requirements now but will at some time before 27 September 2020?
Employers are entitled to receive JobKeeper payments for any fortnight that they meet the eligibility requirements, including turnover reduction requirements.
How do you apply for the JobKeeper payment?
Initially, employers can register their interest in applying for the JobKeeper payment through the Australian Tax Office.
For more details about the JobKeeper payments and how they apply to your business, please contact Partner, Denise Wightman.