Updated as of 18 September 2020 and supplements previous Q&A
Please note: According to this factsheet, “the ATO must be informed of the fortnight from which the JobKeeper payment no longer applies.” The ATO’s key dates identifies this as FN14.
Updated as of 8 September 2020 and supersedes previous Q&A
On the 7th August 2020 the ATO has announced a proposed further extension on JobKeeper payments until march 2021. Here is what was announced:
- To qualify for the first extension (28 September 2020 to 3 January 2021), you do not have to prove the 30% decline in revenue from April to June 2020. You only need to prove the 30% decline from July to September 2020.
- To qualify for the second extension (4 January 2021 to 28 March 2021), you do not have to prove the 30% decline in revenue from July to September 2020. You only need to prove the 30% decline from October to December 2020.
That means that if your business briefly recovers for one quarter, (be it the July quarter or the September quarter), but declines again, you will still be eligible for the proceeding extension.
- If you were newly employed as a full-time, part-time or fixed-term employee between 1 March and 1 July 2020, you are now eligible for either JobKeeper extension from your employer. The rate you receive will depend on how many hours you worked in the 2 fortnights before 1 July 2020.
- If you are a long-time casual employee, the 12 month period of employment for JobKeeper 2.0 extension will now start from 1 July 2019. The rate you receive will depend on how many hours you worked in the 2 fortnights before 1 July 2020.
- Employees that now qualify for JobKeeper payments from 1 July can receive back payments dating from August 3.
- Employees who were aged 18 years or older, or were an independent 16 or 17 year old not undertaking full time study, at 1 July 2020 are now eligible.
That means that workers who were forced to switch employers during the uncertainty of the first wave will now qualify for JobKeeper from their new employer.
What hasn’t changed?
- Businesses must still prove decline in actual GST revenue of:
- 50% for those with an aggregated turnover of more than $1 billion;
- 30% for those with an aggregated turnover of $1 billion or less; or
- 15% for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities)
- Employees are eligible in the extension period if they:
- are currently employed by an eligible employer (including if you were stood down or rehired)
- Are an Australian resident (within the meaning of the Social Security Act 1991)
- an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 (Special Category) visa as at 1 March 2020.
- Haven’t received parental leave, or Dad and Partner pay under the Paid Parental Leave Act 2010 or a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work during the JobKeeper fortnight.
- Only one employer can claim the JobKeeper Payment in respect of an employee.
- The self-employed will be eligible to receive the JobKeeper Payment where they meet the relevant turnover test, and are not a permanent employee of another employer.
The two-tier payment rates also remain unchanged. Depending on whether your employer is still eligible, and how many hours you worked in the two fortnights before you became an eligible employee (either 1 March or 1 July 2020, whichever came first), you will receive:
- Worked 20 hours or more
- 28 September 2020 to 3 January 2021 = $1,200 per fortnight
- 4 January to 28 March 2021 = $1,000 per fortnight
- Worked less than 20 hours
- 28 September 2020 to 3 January 2021 = $750 per fortnight
- 4 January to 28 March 2021 = $650 per fortnight
Do I have to work to earn JobKeeper payments?
While you must be employed by an eligible employer, there is no minimum requirement for hours worked to earn JobKeeper payments. If you are unable to work with your employer due to COVID-19, you will still be able to earn JobKeeper. Additionally, it is not lawful for employers to use JobKeeper payments as leverage to force you into unfair work conditions. The JobKeeper Directives can alter some aspects of your employment contract, including:
- Hours of work
- Timing of work
- Location of work
- The taking of annual leave
- The allocation of work tasks
However, certain conditions must be met, including:
- The direction must be responsive to business changes attributable to COVID-19 or government initiatives to slow the transmission (eg. government shut-downs of businesses or less patronage)
- You can only give the direction if the employee cannot be usefully employed for their normal hours
- You can only give the direction to an employee who you have received a JobKeeper Payment for
- The direction must be reasonable in the circumstances
- The employee’s rate of pay cannot be reduced
- The JobKeeper Payment must continue to be passed onto the employee
- The employee must be provided with at least three days’ notice of the intention to give the direction
- The direction must be in writing
- You must consult with the employee about the direction
For more details on JobKeeper Directives, click here.
How do I prove decline in turnover?
Organisations must still prove decline in actual GST revenue of:
- 50% for businesses and NFPs with an aggregated turnover of more than $1 billion;
- 30% for businesses and NFPs with an aggregated turnover of $1 billion or less; or
- 15% for Australian Charities and Not-for-profits Commission-registered charities (excluding schools and universities)
Employers will need to use business activity statements (“BAS”) for the relevant quarters to prove their eligibility for each extension. BAS for the September quarter are usually submitted in late October, while BAS for the December quarter are usually submitted late January. Because you cannot process JobKeeper payments to employees before you have proved your eligibility as an organisation, we strongly recommend submitting BAS for both the September and December quarters ASAP (i.e as close to 1 October for the September quarter, and as close to 1 January for the December quarter). This way you will have plenty of time to process the first fortnight’s payment.
You will then need to compare the BAS statements for those quarters in 2020 with the same period in 2019 to prove your decline in turnover. If you are a new business that doesn’t have this information, or the period isn’t comparable for other reasons, there’s no need to panic. The Commissioner of Taxation has the discretion to set alternative tests. Information about the existing discretions can be found here.
How is JobKeeper taxed?
The amount that you receive as JobKeeper allowance is still taxed at your regular marginal tax rate, as it is regarded as assessable income.
There is no word yet on anyone who has started with a new employer from after 1 July 2020. We hope that these employees will be reconsidered by the time that the second extension begins next January. We strongly applaud the federal government for making these changes and know they will be very well received by the Australian SMB community.
Updated as of 21 July 2020 supersedes previous Q&A
On 21st July 2020, the Australian government announced an extension and some updates to the JobKeeper payment. With a second wave now in Victoria, and one looking more likely in NSW any day now, JobKeeper 2.0 will act to support Australians through COVID-19.
This announcement brings a new set of changes and a new wave of uncertainty for employers. You’re probably asking yourself, what is it, what’s changed and what does it mean for my business and team? To help, we’ve unpacked the changes and answered the questions you may be finding yourself asking.
How long will the JobKeeper 2.0 extension go for?
There are two extensions of JobKeeper. The first extension is until 3 January 2021. The second extension is from 4 January to 28 March 2021.
JobKeeper 2.0 will provide a two-tiered payment to employees who qualify. The new rate will depend on the hours worked and will be categorised by under 20 hours per week or 20 hours per week or more.
From the 28th of September 2020 until the 3rd of January 2021, the two fortnightly payments will be:
- $1200 (20 hours or more worked per week)
- $750 (under 20 hours worked per week)
From the 4th of January 2021 to the 28th of March 2021, the two fortnightly payments will be:
- $1000 (20 hours or more worked per week)
- $650 (under 20 hours worked per week)
The hours worked per week must be tallied based on hours worked in February 2020. If an employee worked at least 20 hours on average per week during February 2020, they will receive the larger amount. If they worked less than 20 hours per week during February 2020, they will receive the lesser amount.
Employers are responsible for correctly classifying their employees.
What are the key dates?
Am I eligible for the JobKeeper extension?
To be eligible for the JobKeeper extension, businesses have to see a reduction in turnover of 30% or 50% (depending on their size) and a reduction of 15% for charities. The reduction in turnover test has remained the same as the initial JobKeeper eligibility criteria, however, will be reapplied at the end of September and again at the start of January.
What does the extension mean for casual and part-time workers?
Initially, employees received the JobKeeper payment based on their employment type (casual or permanent). From 28 September, eligible employees will receive one of two pay rates based on whether or not they worked on average 20 hours per week in February 2020.
Will the original JobKeeper directives still apply under JobKeeper 2.0?
Yes. This is an extension of JobKeeper, not a new scheme. The directives only state you need to qualify for JobKeeper.
Want more information on JobKeeper 2.0 from industry experts?
We know that times are challenging and navigating your way around complex changes can be stressful. To help you better understand the changes and what it means for your business, we’re holding a live Q&A with industry experts to unpack the JobKeeper 2.0 extension.
Join Ben Thompson (CEO and founder at Employment Hero), Shane Duffy (CEO at Employment Innovations) and Simon Obee (Head of Legal at EI Legal) as they talk about the recent JobKeeper extension announcement and what it means for your business.
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
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.
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 and facts
How does the JobKeeper payment work? 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 https://www.ato.gov.au/general/jobkeeper-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.
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.