Apr 5, 2020

Coronavirus stimulus: round 3

In this latest round of Coronavirus stimulus, the government has bought out the big guns in an effort to help people keep their jobs amidst the economic downturn. The “JobKeeper Payment” is a part of a $130bn wage subsidy scheme that is designed to provide a fortnightly payment of $1,500 per employee.

This new payment will be paid to employers, for up to 6 months for each eligible employee that was on their books on 1 March 2020 and is retained or continues to be engaged by the employer. Eligible employers include business structured through companies, partnerships, trusts, sole traders, and not-for-profits (including charities).

Businesses with a turnover of less than $1bn must show that their turnover will be reduced by more than 30% relative to a comparable period a year ago (of at least a month) to be eligible for the payment. Businesses with a turnover of $1bn or more need to demonstrate that their turnover will be reduced by more than 50% relative to a comparable period a year ago (of at least a month).

Employees that will be eligible for the payment are full-time and part-time employees, including stood down employees, self-employed individuals, and casual employees that have been with their employer for at least the previous 12 months. The eligible employee will also need to be either Australia residents, NZ citizens in Australia who hold a subclass 444 special category visa, migrants who are eligible for JobSeeker payment or Youth Allowance (Other).

The program is now open for applications through the ATO, eligible employers need to include supporting information demonstrating the relevant downturn in the business. In addition, employers will also be required to report the number of eligible employees employed by the business to the ATO on a monthly basis.

The first payments are expected to flow to eligible businesses in the first week of May as monthly arrears. According to the government, where employers participate in the scheme, they must pay eligible employees a minimum of $1,500 per fortnight before tax, even if the eligible employee ordinarily receives less than that amount. If an employee ordinarily receives more than $1,500, they should continue to receive their regular income according to their prevailing workplace arrangements.

Individuals eligible for both the JobKeeper Payment and the JobSeeker Payment will only be eligible for one type of payment. In addition, where an employee has multiple employers, only one employer will be eligible to receive the payment. The employee will need to notify their primary employer to claim the JobSeeker Payment on their behalf. The claiming of the tax-free threshold will in most cases be sufficient notification that an employer is the employee’s primary employer.

Contact one of our accountants in North Sydney for further information on how to access the virus stimulus measures.