• Deborah Roscoe

Job Keeper Payments - to subsidise wages of employees

The Federal Government announced on 30.03.2020 an additional stimulus package, being the Job Keeper Payment:

Job Keeper Payments - to subsidise wages of employees

(note yet to be legislated, but Labor has said they will agree to the proposal)

These are to be paid directly to employers of employees to keep people in jobs and amounts to:

  • $1,500 per fortnight, per eligible employee.

  • For all Businesses including Not For Profits.

  • It is also available to the Self Employed.

  • The scheme will start from 30 March 2020 for 6 months.

  • Payments will be made monthly in arrears by the Tax Office.

  • Payments will start from 1 May 2020.

  • It appears that these payments are made before tax, and thus are likely to be taxable to the employee.

  • The Employer must notify the employee that they are claiming these payments on the employees behalf.

  • Where employees were usually paid less than the $1,500 per fortnight, the Employer must still pass on the full $1,500 to each of those employees.

  • Stood down employees, who are subsequently re-engaged by their employers, must be paid the full $1,500 Job Keeper Payment.

Eligible Employees:

  • Casual employees - who have been with their employer for at least 12 months prior to 1 March 2020.

  • Full-time or part-time employees.

  • Stood down staff that are re-engaged by the Employer, where they were employed by that employer on 1 March 2020.

  • Employees with multiple employers must elect which employer is the primary employer for these payments and if receiving JobSeeker payments or other income support already, need to advise Service NSW.

  • It is likely that the employer you are claiming the tax free threshold through will be the primary employer.

  • Employees must be Australian citizens, permanent residents or special category visa holders to be eligible for these payments.

For Business with T/Over < $1Billion (other rules apply for T/O > $1B)

Who is Eligible?

  • For businesses that have a turnover of less than $1Billion; AND

  • The turnover has decreased by greater than 30% compared to the same time last year, being a minimum of at least a month.

  • Self Employed individuals are also eligible to receive the Job Keeper Payment where they have suffered or expect to suffer a 30% decline in turnover compared to the prior period, being at least one month compared to that month from the prior year.

  • For Example, my interpretation is if March 2019 sales were $100k and for March 2020 they were less than $70k, then your business is eligible for this payment to employees. If the Sales for the March 2020 quarter are over 30% lower than the Sales for the March 2019 quarter, then the business would be eligible, so as long as it meets this requirement at the minimum comparable period of one month, the business is eligible.

How to Apply?

  1. Employers MUST elect to enter into this payment scheme.

  2. This is done by way of an application with the Australian Tax Office.

  3. Supporting information must be provided to show a downturn in their business.

  4. Businesses will be able to register their interest in participating in this Payment scheme from 30 March 2020 via the ATO website:

  5. Employers must report the number of eligible employees employed by the business on a monthly basis.

Uncertain Areas of Scheme

Given this information has just been released, there are some questions raised:

  • Super does not appear payable on these Job Keeper Payments.

  • If employers top up these payments with additional wages, the Government has stated that it is "up to the employer" if they wish to pay super on that additional wage. So whether super is not payable, remains to be clarified.

  • For the greater than 30% reduction in turnover minimum requirement being one month at least, is it like for like, ie March 2019 versus March 2020, as it has been stated, or is a "typical" month be sufficient. This needs to be clarified.

  • For Self Employed persons, does this apply to businesses operating via a structure, ie company, trust or other, versus as a sole trader.