Last updated 07 April 12.53pm
The Federal Government’s “JobKeeper” payment announced on Monday 30th should allow many businesses retain their staff.
The scheme is not yet law but what details we have are included below. (Please prepare but don’t act until the laws pass).
|Date||· From 30 March 2020 for six months
· For employees employed at and from 1 March 2020
· First payments in first week of May 2020
|Applies to||Based on comparable periods:
· Employers <$1 bn that have experienced a downturn of 30% or more
· Employers >$1bn that have experienced a downturn of 50% or more
· ACNC-registered charities that have experienced a drop in turnover of 15% or more
A subsidy of $1,500 per fortnight per employee, administered by the ATO, will be paid to businesses that have experienced a downturn of more than 30% (50% for businesses with turnover of $1bn or more). A 15% threshold will be used for ACNC-registered charities.
To be a part of the subsidy, employers will need to ensure that their employees receive at least $1,500 per fortnight (before tax). See the example below.
There are two levels of eligibility; for employers and employees.
Eligible employers are those employers (including non-profit entities) with:
Charities that are registered with the ACNC are subject to slightly different rules which look at whether they have experienced a drop in turnover of at least 15%.
See Calculating a reduction in turnover below.
Eligible employees are those who:
Sole traders and the self-employed with an ABN will be eligible for the payment if the following conditions are met:
Where the business is operated as a partnership, company or trust the entity can receive JobKeeper payments in relation to one nominated partner, beneficiary, director or shareholder who works in the business.
To access the JobKeeper payment, you need to establish that the turnover of your business has reduced by 30% or more (or 50%).
Most businesses will be expected to establish that their turnover has fallen in the relevant month or three month period compared with the same period from the previous year.
Where a business was not in operation a year earlier, or where turnover a year earlier was not representative of the usual or average turnover, it is expected that the ATO will have some discretion to consider additional information that the business can provide to establish that it has been adversely affected by the impacts of COVID-19. The ATO will also have discretion to set out alternative tests that would establish eligibility in specific circumstances.
The ATO will administer this program and will make the $1,500 payments based on payroll information. The payments will be made monthly in arrears, so it is essential that you ensure your business and your employees continually meet the eligibility criteria.
The business will continue to receive the payments for eligible employees while they are eligible for the payments. While the program is expected to run for 6 months, payments will stop if the employee is no longer employed by the relevant employer.
To access the JobKeeper subsidy, you should talk to your accountant or adviser to assist you with the registration process and calculations.
If you want to manage the process yourself, you must:
Sole traders and the self-employed can register their interest in applying for the JobKeeper payment with the ATO. These businesses will need to provide an ABN for the business, nominate an individual to receive the payment, provide the individual’s TFN and declare their continued eligibility for the payments. Payments will be monthly to the individual’s bank account.
Adam owns a real estate business with two employees. The business is still operating at this stage but Adam expects that turnover will decline by more than 30% in in the coming months. The employees are:
Both Anne and Nick are still working in the business.
Adam registers his interest in the JobKeeper scheme (from 30 March 2020), then applies to the ATO providing details of his eligible employees. Adam also advises Anne and Nick that he has nominated them as eligible employees to receive the payment. Adam will provide information to the ATO on a monthly basis and receive the payment monthly in arrears.
Adam’s business is eligible to receive the JobKeeper Payment for each employee.
For Anne, the business will:
For Nick, the business will:
Adapted from Treasury fact sheet: JobKeeper payment — information for employers