Yesterday the Prime Minister and the Treasurer announced a wage subsidy to support employees and businesses. The JobKeeper Payment is designed to help businesses affected by the Coronavirus to cover the costs of their employees’ wages, so that more employees can retain their job.
The Government will provide $1,500 per fortnight per employee for up to 6 months.
The attached fact sheet outlines the proposed eligibility criteria and payment process. Like previous announcements of support, this is not yet law. The Prime Minister said yesterday that he expects the writing of the supporting legislation to take at least a week, after which a reduced parliament will need to convene to approve it. All of the advice provided in this email is based solely on the information contained in the fact sheet, and could change when the legislation is announced.
• Businesses with annual sales of less than $1 billion will be eligible for the subsidy if their turnover drops by 30% compared to a comparable period a year ago. This comparable period will need to be at least one month. For example, if your business’ sales in March are down by 30% or more compared to March 2019 then you will be eligible.
• To take part in the scheme you must register your interest with the ATO. You can do so by going to ato.gov.au and clicking “JobKeeper Payment” on the home page. It is our recommendation that every business should register their interest as soon as possible, regardless of their current thoughts on eligibility. The ATO will administer payments, which are not expected to be available until May. Eligible businesses will be back-paid to the date of their eligibility, so it’s important to register as soon as you think you qualify.
• All full-time and part-time employees that were employed as at March 1 will be eligible, as well as casuals with more than 12 months of service. All eligible employees will receive the full $1,500, even if they usually earn less than that.
• The self-employed will also be eligible. It is not yet clear if this only applies to sole traders or if it will extend to individuals self-employed through companies, trusts and partnerships. We eagerly await more information on this point.
• If you have stood down employees between March 1 and now, you can re-engage them to become eligible. It is unclear how the entitlements of employees that have been made redundant in this period will be treated but the Treasurer did suggest that redundant employees could also be re-engaged.
The one month (at best) lag between the announcement and the first payments to employers will create cash flow issues for businesses that have been forced to stand down staff. At ID Accounting & Wealth Solutions we are discussing the ways that employers might handle this issue and will endeavour to keep you updated.
We will also endeavour to provide updates as further information about the JobKeeper payment comes to light.