Key Elements of the JobKeeper Scheme.

It took the House of Representatives over 12 hours to decipher all the details and pass the JobKeeper legislation. It is great to see all members of parliament getting this organised so quickly.

Although we have previously informed you of the JobKeeper proposal in a prior Blog, we thought we would just summarise the key elements of the legislation and highlight the important areas you should be aware of to enable you to make a plan for your business now and in the coming months.

These are details that were previously unknown at the time the JobKeeper Payments Scheme was first announced.

Payment of JobKeeper Rebate

  • Eligible businesses will have JobKeeper amounts in their bank account from early May, backdated to payroll periods beginning on Monday 30 March 2020
  • ATO will credit the JobKeeper rebate into your nominated bank account where any tax refunds have been previously sent
  • Payments will be made to the employer monthly in arrears
  • Payments will NOT be offset against any outstanding or overdue tax amounts
  • Generally if you are overpaid, you must repay the amount unless the commissioner makes a written determination to this effect. This may be in cases where an honest mistake was made and no personal benefit was gained.

Wages

  • $1,500 gross payment (before tax) to be paid in each fortnight period, beginning Monday March 30.
  • Normal salaries and wages, including bonuses, loading, allowances, overtime/penalty, leave payments are all eligible wages that can be counted towards the $1,500 per fortnight of JobKeeper payments
  • Pay rates cannot fall below what was being paid prior to JobKeeper
  • Employee hours can be reduced to match the $1,500 JobKeeper payment (although the employer must provide written notice, 3 days in advance)

Superannuation

  • No superannuation guarantee payments are required to be paid on any additional payment made because of the JobKeeper Payment

Leave

  • Employees accrue ALL leave as normal during stand-down periods and through the JobKeeper period
  • Paid annual leave can be taken at half the pay rate, over twice the length, and still attract the JobKeeper payment -annual leave is accrued at the full rate, as though the annual leave was being taken at the full rate.
  • Subsequent redundancy payments or payments in lieu of notice are calculated as normal and as though full uninterrupted service had been given by the employee

Administration

  • You must inform your employees in writing if they are part of your business’ JobKeeper subsidy
  • JobKeeper payments are assessable income for the business, then the payment to the employees is tax deductible

Fairwork and Employment Arrangments

  • Employers can present workers with written stand down directions, including reducing hours of work, and will be empowered to direct employees to perform new duties not strictly outlined in their job descriptions, within reason.
  • A summary of the new employment arrangments have been outlined on the Business Australia website. Learn more here.

Unfortunately, the ATO still needs to provide directions as to how to register for the JobKeeper subsidy, and how to calculate the 30% decline in revenue (i.e from when, over what period etc). We will keep you updated when we know these details.

Here is a link to the Explanatory Memoradum if you are keen to read the 100 page document.

If you haven’t already registered your interest in the JobKeeper payments, here is the link. Remember, this is not the official registration process. We will let you know how to do that as soon as we know.

Here is the latest update from the ATO.

Let’s keep talking to ensure that your business is well placed to get through the coming months. We are here to listen to your concerns and answer your questions. We want to see all of our clients achieve longevity on the other side of this COVID-19 outbreak.