On 30th March 2020, the Government announced their 3rd instalment to the COVID-19 stimulus package. The JobKeeper payment is intended to provide wage subsidies to businesses that are significantly affected by the Coronavirus, and will cost a total of $130 billion over 6 months.
The Morrison Government will provide a historic wage subsidy to around 6 million workers who will receive a flat payment of $1,500 per fortnight through their employer, before tax
Essentially, employers will be given the wage subsidy to help pay employees while their business is in hibernation.
What is JobKeeper?
The JobKeeper payment is intended to provide wage subsidies to businesses that are significantly affected by COVID-19. Under the JobKeeper Payment, businessses impacted by the Coronavirus will be able to access a subsidy from the Government to continue paying their employees. Affected employers will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
Is my business eligible?
You will be eligible if your business has turnover of less than $1 billion AND your turnover has reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month). Your business must have been in an employment relationship with eligible employees as at 1 March 2020, and you need to confirm that each eligible employee is currently engaged in order to receive JobKeeper Payments
Businesses will need to sign a declaration stating that their income has fallen by 30% or more.
30% decline in ‘a comparable period’
It is not clear which is the relative or comparable period, as the press release says ‘ turnover will be reduced by more than 30 per cent relative to a comparable period a year ago’.
It does, however, appear to be forward-looking, such that you may not yet have experienced a 30% decline but it ‘will be’ in the future.
Which employees are eligible to receive the subsidy?
Your business will receive a $1,500 per fortnight subsidy for all full time and part time employees, AND all casual employees that have been employed for at least 12 months (at 1st March 2020). These employees must not be in receipt of a JobKeeper Payment from another employer.
Employees must be at least 16 years of age, Australian citizen, 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.
Soletrading buisnesses with no employees, will also be eligible to recieve JobKeeper Payments if their revenue has dropped by 30 per cent or more.
Once a business starts recieving the JobKeeper Payments, they will need to provide information to the ATO on a monthly basis, and recieve the payments monthly in arrears.
You must pass on the full JobKeeper payment
For an employee earning less than $1,500 per fortnight, you will have to pass on the FULL $1,500 of the subsidy to that employee.
For employees earning more than $1,500 per fortnight, you will need to top up their wage to their normal level, so effectively their pay will be unaffected.
If you have already ‘stood down’ employees, you will need to apply for the payment and pass it on to your employees. If they have already registerd for the JobSeeker Allowance through Centrelink, then once you recieve the payments for them, they should advise Services Australia of their new income.
In short, participating employers will be required to ensure eligible employees will receive, at a minimum, $1,500 per fortnight, before tax.
Businesses will also need to notify all eligible employees that they are receiving the JobKeeper Payment.
Will superannuation be payable on the amount?
Yes, however you only need to pay super on their normal wage amount, not any additional JobKeeper amounts. It will be up to the employer if they want to pay superannuation on any additional wage paid because of the JobKeeper Payment.
Do I withhold PAYGW on the additional subsidy payments?
Yes, any subsidy that is passed on to the employee, even if it is above their usual wage, will have PAYG Withholding taken out.
If your business meets the criteria to receive the previously announced Cash Flow Boost Package (see our previous Blog), you will also receive amounts, of between $10,000 to $100,000, to offset the PAYG Withholding liability for these JobKeeper payments.
How do I register?
Follow this link to register your interest on the ATO website.
Please note that registration does NOT mean that you are accepted, it is merely a registration of interest.
Our team can register your interest on your behalf as soon as we find you meet the 30% revenue reduction criteria.
There was a reiteration of the 6-month moratorium on evictions for both commercial and residential tenants, with details of these arrangements are still to be released. However, Mr Morrison did say that there would be no other assistance or support for rental agreements and that landlords and tenants would need to sit down together on a case by case basis and work out the next 6 months together.
Please know, we are here to support all Clear Path Accounting clients. We want you to know that we are here for you, albeit remotely, to give you whatever support we can to get you through these difficult times.
Please do not hesitate to contact our team if you require further support, have any questions or simply want to talk about your business.
We would love to hear from you.