On 30 March 2020, the Prime Minister announced a $130 billion "JobKeeper" support scheme. Under this scheme, the Federal Government will reimburse "Eligible Employers" an amount of $1,500 per fortnight per each "Eligible Employee" in employment (JobKeeper Payment). The scheme has been costed to run for a maximum 6 month period, commencing 30 March 2020.
At this stage, the legislation which supports this scheme has yet to be published. It will no doubt contain more detail regarding the operation of the scheme. It is anticipated that Federal Parliament will be recalled to pass the legislation in the week commencing Monday 6 April 2020. We have based the below summary on current Government announcements.
Who is eligible under the scheme?
For the purpose of the scheme:
"Eligible Employer" means an employer who can establish that their business is not subject to the Major Bank Levy and:
- if their business has a turnover of less than $1 billion - that their turnover has or will be reduced since 1 March 2020 by more than 30% relative to a comparable period a year ago (of at least a month); or
- if their business has a turnover of $1 billion or more - that their turnover has or will be reduced since 1 March 2020 by more than 50% relative to a comparable period a year ago (of at least a month).
An Eligible Employer may include Not-for-profit entities (including charities), sole traders and self-employed individuals where they meet the above requirements.
Where an employer is part of a broader corporate group, it is currently unclear whether any assessment of turnover must have regard for the turnover of the broader corporate group's business or whether this assessment will be confined to the business of employing entity that chooses to participate only. Future legislation may address this issue.
There is no clarity on whether employer eligibility, based on turnover, will be reassessed from time to time (e.g. on a month by month basis).
"Eligible Employee" means an employee who:
- is 16 years of age or over;
- is either a full time or part time employee, or a casual employee employed by an employer on a regular basis for more than 12 months' as at 1 March 2020;
- was and remains employed by an Eligible Employer as at 1 March 2020 (including employees who have been stood down or rehired);
- is 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 Australia for 10 years or more, or a Special Category (Subclass 444) Visa Holder; and
- is not in receipt of a JobKeeper Payment from another employer.
How do Employers apply?
To receive the benefit, Eligible Employers must first register an intention to apply with the Australian Taxation Office and provide the following information:
- an assessment regarding their actual or anticipated reduction in turnover for the month of March; and
- details of the number of Eligible Employees employed in the business (including employees who have been stood down or re-employed).
Employers will later be able apply for the scheme by means of an online application.
Beyond the initial application, Eligible Employers will need to provide monthly updates to the ATO regarding the number of Eligible Employees employed in the business each month.
When will the payments be made?
The first JobKeeper Payments will be received by employers from the ATO in the first week of May, backdated to 30 March 2020. Payments will be made in arrears.
What are my obligations as an employer?
Employers who are eligible to enrol and choose to do so are responsible for notifying all Eligible Employees employed by them that they will be receiving the JobKeeper Payment, and for ensuring that each Eligible Employee receives at least $1,500 per fortnight (before tax).
For Eligible Employers, this means 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 their 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, their employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
- If an employee has been stood down without pay pursuant to s. 524 of the Fair Work Act 2009 (Cth) (see here), their 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 employer must pay their employee, at a minimum, $1,500 per fortnight, before tax.
Employers must also continue to provide information to the ATO on a monthly basis, including as to the number of Eligible Employees employed by the business.
What about superannuation?
Employers must continue to pay superannuation on an employee's regular salary or wages but it will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment (e.g. the additional payments made to ensure that individual employees are receiving the full $1,500 per fortnight).
If you have any questions about the above, please do not hesitate to contact us.