$1,500 JobKeeper subsidy to keep staff employed

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).

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.

Eligibility

There are two levels of eligibility; for employers and employees.

Eligible employers are those employers (including non-profit entities) with:

• Turnover below $1bn that have experienced a reduction in turnover of 30% or more relative to a comparable period 12 months ago (of at least a month); or
• Turnover of $1bn or more that have experienced a reduction in turnover of 50% or more relative to a comparable period 12 months ago (of at least a month); and
• Are not subject to the Major Bank Levy.

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:

• Were employed by the relevant employer at 1 March 2020; and
• Are currently employed by the employer (including those who have been stood down or re-hired); and
• Are full time, part-time, or long term casuals (a casual employee employed on a regular and systematic basis for 12 months as at 1 March 2020); and
• Were at least 16 years of age at 1 March 2020; and
• Were an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020; and
• Were a resident of Australia for tax purposes on 1 March 2020; and
• Are not in receipt of a JobKeeper Payment from another employer.

Sole traders and the self-employed with an ABN will be eligible for the payment if the following conditions are met:

• Their turnover has or will fall by 30% or more;
• They had an ABN on or before 12 March 2020;
• They had some income in the 2018-19 income year or made some supplies between 1 July 2018 and 12 March 2020 and provided a 2019 tax return or certain activity statements to the ATO by 12 March 2020;
• They were actively engaged in the business;
• They are not entitled to another JobKeeper Payment
• They were aged at least 16 years of age as at 1 March 2020; and
• They were an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.

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.

Calculating a reduction in turnover

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.

How the support is calculated

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.

How the support is provided

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:

• Register
• Applications are not yet open. However, you should register your intent to apply for the JobKeeper subsidy with the ATO (here). The ATO will provide you with regular updates and advise you when you can lodge your application

• Assess turnover
  • Ensure you have an accurate record of your revenue for the 2018-19 income year and for the 2019-20 year to date
  • Ensure you keep an accurate record of revenue from March 2020 onwards
  • Compare your revenue for the month or quarter ended 31 March 2019 with revenue for the month or quarter ended 31 March 2020 to make a high level assessment of whether this measure is likely to be available.
  • Measure the % decline in your revenue to see whether it has declined by at least 30%
  • If you are not eligible in March, you may become eligible in another month

• Identify eligible employees
  • Nominate the employees eligible for the JobKeeper payments – you will need to provide this information to the ATO and keep that information up to date each month. The ATO will use Single Touch Payroll to prepopulate the information in most cases.
  • Notify all eligible employees that they are receiving a JobKeeper payment. Employees can only be registered with one employer.
  • Pay eligible employees at least $1,500 per fortnight (before tax). If an employee normally receives $1,500 or more per fortnight before tax the employee should continue to receive their regular income.
  • Pay superannuation guarantee on normal salary and wages amounts paid to employees. If the employee normally receives less than $1,500 per fortnight before tax, the employer can decide whether to pay superannuation on the additional amount that is paid as a result of the JobKeeper program.

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.