Employment Hero

JobKeeper Payment Q&A

Updated 28 April 2020 and supersedes previous Q&A

A new day. A new stimulus package. And a new way to keep around half of Australia’s 13 million-strong workforce employed.

The Australian government has announced a $130 billion JobKeeper payment package to support affected businesses and their employees through the COVID-19 pandemic. The economic impact of the pandemic has been felt widely across Australia with hundreds of thousands of individuals being made redundant, stood down or experiencing reduced work. 

It’s expected that around 6 million Australians will be eligible for this payment. Eligible employers will receive a $1,500 payment per fortnight, per eligible employee for the next 6 months to assist with the economic impact caused by COVID-19. This package has been announced to lessen the financial pressures on businesses and their employees, and ultimately allow them to easily start over when we’re on the other side of this crisis. 

Since the announcement, we know there has been confusion around who is and isn’t eligible, how you can apply, and when it comes into effect. In partnership with Retail Food Group, we’ve pulled together some common questions and answers to help you navigate the JobKeeper package and what it means for your business and team. 

If you are planning on making use of the JobKeeper payment but have already made your staff redundant, we’ve put together this template to help you. This template, written and approved by Employment Law experts, is fully customisable to your businesses situation if you find yourself ready to reverse that redundancy decision. You can view the redundancy withdrawal template here.

Alternately, if your organisation is ending stand down to make use of the JobKeeper payment, we’ve put together this template. This template, written and approved by Employment Law experts, is fully customisable to your business situation if you find yourself ready to end stand down. You can view the notice to end stand down template here.

If you’d like to view our in-depth guide to the JobKeeper Payment, we’ve put together a comprehensive whitepaper to help you. This guide covers everything you need to know to get your head around this stimulus package including:

  • What the JobKeeper payment is
  • Who is eligible and how to apply
  • Other financial business support available
  • JobKeeper vs JobSeeker
  • JobKeeper + Redundancies + Stand Downs
  • FAQs

 

Download your comprehensive guide to JobKeeper payments



 

Since this announcement, we’ve been hard at work on the Employment Hero JobKeeper Wizard that allows employers to send, collect and report on the nomination form. If you’d like to find out more about how the Employment Hero JobKeeper Wizard can help streamline your JobKeeper application process, get in touch with one of our small business specialists today.

 

A walkthrough of the Employment Hero JobKeeper Wizard

Additionally, you can view our handy JobKeeper FAQ blog for employers here.

To register your interest in receiving the JobKeeper payment, follow this link to the ATO. 

Disclaimer: 

The information provided is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation, we recommend you contact Employment Innovations for further advice. Please also note that legislation for the JobKeeper stimulus package has not yet been approved by parliament so all details are subject to change and require further clarification. 

 

Overview: summary of key terms

In simple terms, the JobKeeper allowance is paid to employers to help them pay employees at least $1,500 per fortnight. Once you have established eligibility for the employer’s business and identified eligible employees (see below), the key terms are:

  • Employer will receive $1,500 per fortnight per eligible employee.
  • Employer must pay each individual employee for which they’re claiming the JobKeeper allowance AT LEAST $1,500 per fortnight (before tax) during the period the employer is claiming the JobKeeper allowance, even if the employee was earning less than that amount (eg casuals & part-timers). 
  • Employees earning more than $1,500 will continue to receive their normal wage or salary entitlement. If the employer is paying more than $1,500 per fortnight, the JobKeeper payments are simply a part-subsidy of their normal wage bill. 
  • PAYG withholding taxes continue to apply (rates applicable to Gross Amount paid, even if it’s the minimum $1,500)

How is a business eligible for the JobKeeper Support?

Businesses (including not-for-profits) with less than $1B in turnover who have lost or expect to lose at least 30% of turnover (of at least one month), and businesses (including not-for-profits) with more than $1B in turnover who have lost or expect to lose at least 50% of turnover are eligible to apply.  The employer completes an application from 30 March 2020 with the ATO online which is subject to assessment. 

For charities registered with the Australian Charities and Not-For-Profit Commission (ACNC), they will be eligible for the subsidy if they estimate their turnover has or will likely fall by 15 per cent or more relative to a comparable period.

The Tax Commissioner will also consider other scenarios. For an updated fact sheet, you can view the Treasury website here

Please note the Commissioner has extended the time to enrol for the initial JobKeeper periods from 30 April 2020 until 31 May 2020. You can find out more information on this extension here.

The ATO has also announced that employers now have until 8th May 2020 to ensure all eligible employees have been paid $1,500 (before tax) for JobKeeper fortnight payments (30 March – 12 April, 13 April – 26 April). They will accept the minimum $1,500 payment for each fortnight to be paid by the employer even if it has been paid late. If you do not pay your staff by this date, you will not be able to claim JobKeeper for the first two fortnights.

 

What is the benefit for employers?

Employers will receive $1,500 gross per eligible employee per fortnight. Payments will only commence from the first week of May 2020. 

 

What is an eligible employee?

The employer must have been in an employment relationship with eligible employees as at 1 March 2020. This includes full-time, part-time or long-term casual employees.  Each eligible employee must continue to be engaged by the employer in order to receive JobKeeper payments. 

Eligible employees are employees who:

  • are current employees of an eligible employer, including employees who have been stood down or re-hired.
  • were employed at 1 March 2020.
  • were, as at 1 March 2020, employed on a full time or part time basis, or had been employed on a regular and systematic casual basis for at least 12 months.
  • are at least 16 years of age at 1 March 2020.
  • are not receiving a JobKeeper Payment from another employer.
  • were a resident for Australian tax purposes on 1 March 2020.
  • are an Australian citizen, the holder of a permanent visa, or a Special Category (Subclass 444) Visa Holder at 1 March 2020.

JobKeeper Payments are paid in respect of each eligible employee who was employed at 1 March 2020 and is currently employed by the business (including those who are stood down or re-hired).

If an employer opts to participate in JobKeeper, you must nominate all eligible employees. You cannot choose to nominate only some employees. However, individual eligible employees can choose not to participate.

How much does an eligible employee get paid?

Employees earning more than $1,500 per fortnight should continue to receive their usual salary even if an employer is claiming the JobKeeper allowance. If an employee earns less than $1,500, the employer must pay them at least $1,500 per fortnight (before tax) if they are claiming the JobKeeper allowance for that employee. 

 

Can I reduce an Employee’s salary to $1,500 per fortnight?

Employment laws and regulations relating to changes of employment contracts still apply. There are options available to employers to reduce employee hours and salaries in certain circumstances however this is a complex area that can give rise to employer liabilities if not handled correctly. You should consult a specialist employment adviser if you are considering this. 

 

Is the payment to employees taxable?

Yes, however the tax treatment of payments needs further clarification.

 

What do employers need to do?

Employers who believe they meet the revenue decline test, or are likely to, and have eligible employees should register their interest at www.ato.gov.au/Job-keeper-payment/

 

When will employers receive these payments?

The government will start reimbursing employers from the first week of May 2020 backdating eligible payments to the first full eligible pay period of March 2020 and paying the employer on a monthly basis for up to six months or until the business doesn’t qualify.

 

When will employees receive these payments?

You can only claim JobKeeper Payment for eligible employees if you pay the $1,500 per fortnight (before tax) to each eligible employee. Think of the payment as a reimbursement—you must make the payment first, then the government will reimburse you the $1,500 per eligible employee. These payments should be made using your payroll system and reported to the ATO via Single Touch Payroll. This will support the online claim process when it is available.

 

Are employers required to pay superannuation on the $1,500 per fortnight?

No, superannuation is not required to be paid for the amount supplemented by the Government if the employee is not working. If it is supplementing a salary for work performed, super is payable.

 

Which employees will be eligible?

Full time, part time and casual employees (providing casuals have worked for the business on a regular basis for 12 months preceding 1 March 2020) as at 1 March 2020. New Zealand residents are also eligible. The ATO will be using Single Touch Payroll to assess employee eligibility.

 

Are employees eligible for JobKeeper payments if they commence in a business after 1 March?

No, these employees would need to apply for benefits separately through Centrelink. 

 

 

Are employees required to do anything to receive the JobKeeper payments?

No, once the employer is deemed eligible, payments will be made in accordance with the benefit. Employees are only entitled to receive JobKeeper payments from one employer and they are not entitled to collect Job Seeker payments from Centrelink at the same time. Therefore employees should notify an employer if they are already receiving JobKeeper payments from another employer and must not collect Job Seeker payments once they are notified by an employer they are receiving a JobKeeper payment. 

 

Will employees who receive this benefit still be eligible for the JobSeeker and/or Coronavirus Supplement?

No. For employees that have received either of these payments and then become eligible for the JobKeeper payment, they will need to advise Centrelink.

Please note: If an employee double-dips on JobSeeker and JobKeeper, they may be required to pay it back.

 

Will employees who are not Australian residents be eligible for the JobKeeper payment?

Only New Zealand citizens with Australian working rights. Other employees may be eligible for benefits through Centrelink 

 

For more information on the JobKeeper payment, visit the ATO website. 

 

Suggested Reading

 

If you’re looking for more information on COVID-19 and what it means for your business, we’ve pulled together many resources to help you navigate this uncertain time. From articles to templates, webinars and posters, we’re here to support you through this. You can visit the Employment Hero COVID-19 Resource Hub here. 

Additionally, we recommend these resources for further reading.

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