JobKeeper Payment Explained for Business Owners
The Australian Federal Government recently introduced the $130 billion JobKeeper Payment Scheme. The scheme is but one of many introduced in response to the COVID-19 crisis, such as the $1.6 billion Early Childhood Education and Care Relief Package.
But with so much information circulating in the media, it’s tricky to know what is available and whether you’re eligible. We’ve compiled and answered some common questions small business owners are asking!
1. What is the difference between JobSeeker and JobKeeper?
The JobSeeker Payment is for people searching for work that are between 22 and the Age Pension age, satisfy the income test and meet residence rules. In response to COVID-19, there have been changes to the JobSeeker Payment eligibility and application process. For more information please visit www.servicesaustralia.gov.au.
The JobKeeper Payment is a wage subsidy program to support employees and businesses. Businesses and not-for-profits impacted by COVID-19, can apply for the government to pay employee wages. The scheme will provide businesses with $1,500.00 per fortnight for each nominated employee.
2. Is my business eligible for the JobKeeper Payment?
According to the Australian Taxation Office (“ATO”), employers will be eligible if they meet all the below criteria:
· “On 1 March 2020, you carried on a business in Australia or were a not-for-profit organisation that pursued your objectives principally in Australia.
· You employed at least one eligible employee on 1 March 2020.
· Your eligible employees are currently employed by your business for the fortnights you claim for (including those who are stood down or re-hired).
· Your business has faced a
o 30% fall in turnover (for an aggregated turnover of $1 billion or less)
o 50% fall in turnover (for an aggregated turnover of more than $1 billion), or
o 15% fall in turnover (for ACNC-registered charities other than universities and schools).
· Your business is not in one of the ineligible categories.”
To find out how to calculate a fall in turnover, please visit https://www.ato.gov.au/General/JobKeeper-Payment/Employers/Eligible-employers/.
The ATO also provides ineligibility criteria. This includes that the entity is a company in liquidation, is a sovereign entity or the entity is an individual who has entered bankruptcy. Additional ineligibility criteria are provided on the ATO website.
3. Is my employee eligible for the JobKeeper Payment?
The ATO says employees will be eligible if they:
· are employed by an eligible business (this includes employees stood down or re-hired);
· were either:
o a permanent full-time or part-time employee at 1 March 2020; or
o a long-term casual employee as at 1 March 2020 and not a permanent employee of another employer. These employees must be employed on a regular and systemic basis for a minimum of 12 months.
· were at least 16 years old on 1 March 2020;
· were an Australian resident on 1 March 2020 (visit the ATO website for further information);
· Were not in receipt of the following payments during the JobKeeper fortnight:
o a government parental leave or Dad and partner pay; or
o a payment in accordance with Australian worker compensation law.
· agree to be nominated by the employer.
Employers will be unable to claim for employees who were first employed after 1 March 2020, left employment before 1 March 2020 or have agreed to be nominated by another employer.
4. Do business owners or employees apply for JobKeeper Payment?
The short answer is business owners.
Here is a list of the enrolment steps for the JobKeeper payment:
a. Register your interest on the ATO website.
c. Continue to pay at least $1,500.00 to each eligible employee per JobKeeper fornight (the first fortnight is from 30 March to 12 April)
d. Notify each eligible employee that you intend to nominate them under the JobKeeper payment. Your employee must agree by completing and returning to you, the “JobKeeper employee nomination notice.” This notice is located on the ATO website.
e. From 20 April 2020, enrol in the JobKeeper Scheme using an online form on the ATO website. Once enrolled, businesses will be required to submit further information.
You will then be required to confirm your eligible employees from 4 May 2020 onwards. Visit www.ato.gov.au for more information.
5. What if my employee has multiple employers?
Employees can usually choose which employer to nominate. But, if they are long-term casual and have another permanent employment, they must choose the permanent employer. Importantly, employees can only receive the JobKeeper payment from one employer.
6. What about employees who have been terminated?
Businesses can re-engage terminated employees and be eligible (provided they are eligible), if they terminated the employee after 1 March 2020.
To claim the JobKeeper Payment, businesses will need to:
· confirm the employee wants to be re-hired and be nominated by you for the JobKeeper scheme;
· re-engage the employee;
· request the re-engaged employee complete and return to you the JobKeeper employee nomination notice; and
· commence paying the employee a minimum of $1,500 (before tax) for each fortnight they are employed and you claim for.
Businesses will only receive the JobKeeper Payment from when they re-engage the nominated employee.
7. How much will I receive for my nominated employees?
If eligible, you will receive $1,500.00 per nominated employee.
8. How much do I pay my nominated employees?
All businesses will be required to pay their nominated employees a minimum of $1,500.00 per fortnight (before tax), even if your employee earns less or you re-hire them. You will not be eligible for the JobKeeper payment if you pay your employees less than $1,500.00 from 30 March 2020.
You must pay your employees $1,500.00 (plus tax) for each JobKeeper fortnight you intend to claim. The first fortnight than can be claimed is from 30 March to 12 April. The second fortnight is 13 April to 26 April. The ATO will accept late payment of the first two fortnights by employers until the end of April.
Once you receive the JobKeeper payment, you cannot pay your nominated employees less than the $1,500.00 per fortnight and keep the difference.
For more information on the JobKeeper Payment visit www.ato.gov.au.