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What Coronavirus Assistance is Available to Help Me Retain and Support My Employees?

It has been a very difficult few weeks for individuals and small business owners with the escalation of COVID-19 in our communities. While our Government is taking the measures required to manage the presenting health issues, many of us are grappling with the changes that have resulted for our businesses.

One of the most significant announcements made by the Government to assist with supporting businesses to retaining jobs has been the JobKeeper Subsidy. We have already been asked many questions about this, who will be eligible and how to apply. Given this subsidy is so significant and will be of considerable benefit to many, we have put together another update.

The JobKeeper Payment!

What is it?

It is a payment to business owners affected by the Coronavirus to cover the costs of employees’ wages. The aim is for employees to retain their jobs and continue to earn an income. Employers will be able to maintain a connection with their staff rather than stand them down or terminate their employment. Hopefully, they can then reactivate their operations quickly once the crisis is over.

This is a temporary scheme for employers and the self-employed.

The Government will provide $1,500 per fortnight per employee for up to 6 months.

What businesses will be eligible?

Employers will be eligible if:

  • their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (further information will become available from the ATO soon about the tests they will use to assess this downturn); or
  • their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per centre relative to a comparable period a year ago; and
  • the business is not subject to the Major Bank levy.

Note: this is also open to businesses without employees, such as the self-employed.

What employees will be covered?

Eligible employees will include those:

  • currently employed (including those stood down or re-hired).
  • employed at 1 March 2020.
  • who are full-time, part-time, or long-term casuals (a casual employed on a regular basis for longer than 12 months at 1 March 2020).
  • who are at least 16 years of age.
  • who are an Australian citizen, 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 Australian for 10 years of more, or a Special Category (subclass 444) Visa Holder (New Zealand citizens); and
  • those not in receipt of a Job Keeper Payment from another employment.

What do you have to do?

Employers must elect to participate in the Scheme.

They must make an application to the Australian Taxation Office (ATO). At this stage employers can register their interest in applying. Applications open from Monday 20 April 2020.

As part of this application the ATO will provide further information about the supporting documentation that will be required to demonstrate a downturn in business.

Employers will also need to report the number of eligible employees on a monthly basis. The ATO will use Single Touch Payroll data to assist with this. It makes sense that to facilitate this process that your reporting is up to date.

How does it work?

Employers will receive a payment for each eligible employee of $1500 per fortnight.

Employees will receive, at a minimum, $1,500 per fortnight, before tax. Employers are able to top-up this payment.

Employers must ensure all eligible employees are notified and receive at least the above amount.

Different scenarios for payments will be made as follows:

  • If an employee ordinarily receives $1,500 or more in income per fortnight before tax, they will continue to receive their regular income according to their prevailing workplace arrangements. The JobKeeper Payment will assist the employer to continue operating by subsidising all or part of the income of their employee(s).
  • If an employee ordinarily receives less than $1,500 in income per fortnight before tax, the employer must pay, at a minimum, $1,500 per fortnight, before tax.
  • If an employee has been stood down, the employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
  • If an employee was employed on 1 March 2020, subsequently ceased employment with their employer, and then has been re-engaged by the same eligible employer, the employee will receive, at a minimum, $1,500 per fortnight, before tax.
  • It will be up to employers if they pay super on any additional wage paid due the JobKeeper payment.

Payments will be paid by the ATO to employers, in arrears, each month.

What is the timing?

The subsidy will be paid for eligible employee from the 30 March 2020.

First payments are scheduled to be received by employers in the first week of May 2020.

For more detailed information…

More detailed information will be published over the next few days about eligibility and the process to apply. The best source of information, with case study examples, can be obtained from:

Do you need some help accessing these measures?

If you need any assistance in getting your bookkeeping up to date, Business Activity Statements prepared and lodged, or Single Touch Payroll reporting, please Contact Us.