M & C Accountants comments
This marks the third weekend in a row that the Federal Government has released a stimulus package to support households and businesses during COVID-19.
Federal stimulus packages now total $320 billion.
The aim of this payment is to ensure that employers and employees stay connected during these tough times, employees have a sense of purpose even though they may be home and unable to work and to also ensure that businesses have employees ready to work once we get through this and it is business as normal again.
The amount of $1,500 per fortnight has been decided on as a wage subsidy as it 70% of the median wage. The Morrison Government believes that an equal payment for everyone is the fairest option.
What is the JobKeeper Payment?
The jobkeeper payment is a $1,500 per fortnight subsidy given to employers for every employee on the books.
The employer MUST pass this full before tax amount to the employee.
When does it start?
Business can register from today at https://www.ato.gov.au/general/gen/JobKeeper-payment/
When is the first subsidy paid to employers?
The first round of payments from the government to employers will occur in the first week of May 2020 and can include back payments from 30 March 2020 if employers have commenced paying it to employees.
How long will this $1500 subsidy be paid?
At this stage, this subsidy will occur for 6 months
Who is eligible?
Employers with an annual turnover of under $1billion, where their turnover has dropped by 30% or more since 1 March 2020 over a minimum one month period
Employers can be a company, trust, partnership, sole trader or not for profit (charities).
Self employed individuals are also eligible
Employers must have employed these employees on or before 1 March 2020
For example; A business with turnover of $50k in March and $100k that had employees would be eligible to apply for the subsidy as their revenue has dropped by 50%
*Employers with turnover of greater than $1billion would need to see revenue drop by 50% or more to be entitled
* Businesses that are subject to a major bank levy are excluded (This includes ANZ, NAB, Westpac, Macquarie and Commonwealth Bank)
What type of employees are included?
Full time
Part time
Casual that has been with their employer for greater than 12 months
Sole traders
At least 16 years old
Employees must be Australian residents or hold a subclass 444 special category visa (NZ) or migrants that are eligible
for Centrelink benefits such as youth Allowance
*An employee can only receive this payment from one employer and it will need to be disclosed if they are receiving Centrelink benefits
What about if I have already let staff go because of COVID-19?
If you have let staff go since 1 March 2020 they will still be eligible for their subsidy payment with you.
What about if you are Self employed with no employees?
You can also register your interest at;
You will need to provide your ABN, TFN and bank details to receive the payment together with a declaration as to recent business activity.
You will also need to provide a monthly update to the ATO to confirm your eligibility for the subsidy.
Super Guarantee – Does an employer need to pay super on the subsidy when paying it to their employees?
If you normally pay your employee $1,500 per fortnight gross then yes.
If you normally pay your $1,499 or less per fortnight yes up to their normal wage amount but any amount above their normal wage amount and up to $1,500 is optional and not compulsory.
If you stood down your employee in March, no SGC is payable on this subsidy paid to them
Can an employee register for this payment?
No. Talk to your employer and ask them to register
How do I put my business on the list for this subsidy?
Sole traders and employers will need to register their interest on https://www.ato.gov.au/general/gen/JobKeeper-payment/
Once registered they will be required to supply information about their employees/themselves and also supply the ATO with monthly updates on their revenue to determine eligibility
Examples of how the payment will work from Treasury
Self-employed
Melissa is a sole trader running a florist. She does not have employees. Melissa’s business has been in operation for several years. The economic downturn due to the Coronavirus has adversely affected Melissa’s business, and she expects that her business turnover will fall by more than 30 per cent compared to a typical month in 2019.
Melissa will be able to apply for the JobKeeper Payment and would receive $1,500 per fortnight before tax, paid on a monthly basis.
Worker with multiple jobs
Michelle currently works two permanent part-time jobs, at an art gallery during weekdays, and at the local café on the weekend. Due to the impact of the Coronavirus, the gallery has closed and Michelle has been stood down without pay under the Fair Work Act. Michelle continues to work at the café delivering take-away orders. Michelle can only receive the JobKeeper Payment once, from the employer from whom she nominates as her primary employer. As Michelle only claims the tax free threshold from her job at the art gallery, this will be treated as her nomination of the art gallery as her primary employer.
The art gallery is eligible for the JobKeeper Payment. The art gallery will pass the JobKeeper Payment on to Michelle, so she will receive $1,500 per fortnight before tax. During the application process, the art gallery will notify the ATO that Michelle receives the payment from them. The art gallery is also required to advise Michelle that she has been nominated to the ATO as an eligible employee to receive the payment.
The café is not eligible to receive the JobKeeper Payment for Michelle. The income that
Michelle receives from her job at the café does not change her entitlement to the JobKeeper Payment she receives from the art gallery.
Employee made redundant after 1 March
Miles worked as a permanent part-time personal trainer at a gym for six months and was made redundant on 20 March 2020 in response to the Government directive that gyms close. Miles was not entitled to redundancy pay due to his length of service.
In response to the announcement of the JobKeeper Payment, the gym decides they want to re-engage Miles so they are well placed to resume their operations once the Coronavirus restrictions are lifted.
After being made redundant, Miles had registered an intent to claim with Services Australia for access to the JobSeeker Payment and the Coronavirus Supplement. Miles is single, with no children and in total he would be eligible to receive $1,124.50 before tax per fortnight.
If Miles chooses to be re-hired by the gym, under the JobKeeper Payment he will receive $1,500 a fortnight before tax while he is stood down. Miles will need to advise Services Australia of his income. He is no longer eligible for the JobSeeker Payment and the Coronavirus Supplement from Services Australia as a result of receiving the JobKeeper Payment.
Employer with 5 employees who all currently get paid more than $1,500 per fortnight
Sara runs a landscaping company, and employs five full-time gardeners. Sara is paying her employees $1,700 per fortnight before tax. She expects that her turnover will decline by more than 30 per cent over the coming months and that she will either need to lay staff off, or reduce their wages significantly.
As a result of the JobKeeper Payment, Sara will be able to keep employing every gardener, and only needs to pay the $200 wage cost per fortnight before tax per employee above the $1,500 per fortnight (before tax) JobKeeper Payment.
Changes to Centrelink Income Test
The income test for Centrelink has also been raised as a result of this stimulus. Partners can now earn up to $79,762 per annum prior to the unemployed partner losing their entitlements.
M & C Accountants suggest your call or email us to go through your situation and work out how we can help you access the measures that apply to you. We can point you in the right direction or assist with registrations and paperwork
We are available to assist