1 April 2020 — articles
stimulus package 3 – jobkeeper payment explained
The following relates to the third stimulus package announced by the Federal
Government on 30th March and relates directly to the JobKeeper payment
Last week, the Federal Government enacted a range of economic measures totalling $189 billion to support Australians during the Covid-19 crisis.
On the 30th March, the Prime Minister and the Treasurer announced that the Government will provide a wage subsidy that will benefit more than six million workers. The $130 billion JobKeeper programme will provide a flat payment of $1,500 per fortnight through employers and will be open to eligible businesses that receive a significant financial hit caused by the coronavirus.
The payment will provide the equivalent of around 70 per cent of the national median wage and will ensure eligible employers and employees stay connected while some businesses move into hibernation.
You can register your intention to apply for the JobKeeper payment by clicking here
Employees will receive a notification from their employer that they are receiving the JobKeeper Payment. The majority of employees will need to do nothing further.
Employees in the following circumstances will have additional obligations.
background on jobkeeper payment for employees
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a wage subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum of 6 months.
Eligible employees will receive a minimum of $1,500 per fortnight, before tax. It will be up to the employer if they want to pay superannuation on any additional wage paid because of JobKeeper Payments.
Eligible employees include Australian citizens, the holder of a permanent visa, a 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.
Full time and part time employees, including stood down employees, would be eligible for the JobKeeper Payment. Where a casual employee has been with their employer for at least the previous 12 months they will also be eligible for the Payment.
Employees will be able to receive this payment in a number of different ways.
Your employer will notify you if they are claiming the JobKeeper Payment on your behalf
To receive the JobKeeper Payment, employers must:
background on jobkeeper payment
Under the JobKeeper Payment, businesses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
Employers will be eligible for the subsidy if:
The employer must have been in an employment relationship with eligible employees as at 1 March 2020 and confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments.
Not-for-profit entities (including charities) and self-employed individuals (businesses without employees) that meet the turnover tests that apply for businesses are eligible to apply for JobKeeper Payments.
Eligible employees are employees who:
If your employees receive the JobKeeper Payment, this may affect their eligibility for payments from Services Australia as they must report their JobKeeper Payment as income.
Businesses with employees
Initially, employers can register their interest in applying for the JobKeeper Payment via ato.gov.au from 30 March 2020.
Subsequently, eligible employers will be able to apply for the scheme by means of an online application. The first payment will be received by employers from the ATO in the first week of May.
Eligible employers will need to identify eligible employees for JobKeeper Payments and must provide monthly updates to the ATO.
Participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.
It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
Further details for businesses for employees will be provided on ato.gov.au.
Businesses without employees
Businesses without employees, such as the self-employed, can register their interest in applying for JobKeeper Payment via ato.gov.au from 30 March 2020.
Businesses without employees will need to provide an ABN for their business, nominate an individual to receive the payment and provide that individual’s Tax File Number and provide a declaration as to recent business activity.
People who are self-employed will need to provide a monthly update to the ATO to declare their continued eligibility for the payments. Payment will be made monthly to the individual’s bank account.
Employer with employees on different wages
Charlotte owns and runs a small medical specialist practice in Melbourne with two employees. The business is still operating at this stage, but Charlotte expects that turnover will decline by more than 30 per cent in in the coming months. The employees are:
Charlotte is eligible to receive the JobKeeper Payment for each employee, which would have the following benefits for the business and its employees:
Charlotte can register her initial interest in the scheme from 30 March 2020, followed subsequently by an application to ATO with details about her eligible employees. In addition, Charlotte is required to advise her employees that she has nominated them as eligible employees to receive the payment. Charlotte will provide information to the ATO on a monthly basis and receive the
payment monthly in arrears.
Employer with employees who have been stood down without pay
Taylor owns a dental clinic with a receptionist, a dental nurse and a hygienist who he employs all as permanent part-time staff, but the government directive that dental clinics can no longer operate has required him to shut the business. As such he has been forced to stand down his three employees without pay.
Taylor’s turnover will decline by more than 30 per cent, so he is eligible to apply for the JobKeeper Payment for each employee and pass on $1,500 per fortnight before tax to each his three staff for up to six months. Taylor will maintain the connection to his employees and be in a position to quickly resume his clinic reopening.
Taylor is required to advise his employees that he has nominated them as eligible employees to receive the payment. It is up to Taylor whether he wants to pay superannuation on the additional income paid because of the JobKeeper Payment.
If Taylor’s employees have already started receiving income support payments like the JobSeeker Payment when they receive the JobKeeper Payment, they will need to advise Services Australia of their new income.
Self-employed individuals – Businesses without employees
Melissa is a sole trader who is engaged as a locum. 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.
From the Bongiorno team
At the end of this period, we will all be judged by our behaviour during this time of extreme stress.
As this general advice has been prepared without taking account of your objectives, financial situation or needs, you should consider the appropriateness of this advice before acting on it. If this general advice relates to acquiring a financial product, you should obtain a Product Disclosure Statement before deciding to acquire the product.
Interested in speaking with one of our advisers about achieving your financial and lifestyle goals? Click below to register your interest and we will contact you to make a complimentary appointment (that fits around your busy schedule)