Yesterday afternoon, the PM & Treasurer announced the latest in what is now a long string of stimulus measures for the Australian economy in response to the rapidly evolving COVID-19 / CoronaVirus situation.
The ‘JobKeeper’ program (not to be confused with ‘JobSeeker’) is a wage subsidy program kicking off effective March 30 for up to six months. Our expectation is that the government will reassess this closer to the end date of September 30 to determine whether further assistance is necessary.
There is a lot of detail, of which we’ll highlight the key parts. How the scheme will be implemented is still a bit hazy, but here is what we know so far:
- Part of the government’s ‘business hibernation’ strategy. It will allow employees to retain their job and earn an income – even if their hours are cut and for employers to maintain their connection to their employees.
- Under the subsidy the Government will provide $1,500 per fortnight per eligible employee for a maximum period of up to 6 months.
- For businesses with annual revenue of less than $1B, revenue has reduced by more than 30 percent relative to a comparable period a year ago (of at least a month). i.e. March this year compared to March last year.
- Employers must have had an eligible employee on their payroll as at 1 March 2020 Not for profit entities (including charities).
- Self-employed individuals with annual revenue of less than $1 billion and revenue has reduced by more than 30 percent relative to a comparable period a year ago.
- Currently employed by the eligible employer (including those stood down or rehired) and were employed as at 1 March 2020.
- Employed as full time, part time or long-term casual (casual employed for > 12 months)
- Are an Australian citizen, holder of a permanent visa and a non-protected special category visa holder residing continually in Australia for 10 years or more.
- Not in receipt of JobKeeper program from another employer
- Eligible employers will be paid $1,500 per fortnight per eligible employee with payments commencing in May but backdated to 30 March.
- Eligible employees will receive minimum $1500 per fortnight (before tax) with an employer able to top up their payment.
- If an employee is paid > $1500 or more in per fortnight before tax, they will continue to receive their existing salary with JobKeeper payments assisting the employer in paying all or part of the income paid to their employee(s).
- If an employee is paid < $1500 in income per fortnight before tax – the employer must increase their wage to minimum $1500 per fortnight before tax (effectively passing on the full subsidy). It’s up to the employer if they want to pay super on the additional wage due to JobKeeper payments.
- Employees that have been stood down must be paid a minimum of $1500 per fortnight before tax with the same principle applying to employees let go and now are being re-engaged.
- Employers can register their interest via the ATO from 30 March 2020 here. We recommend doing this as soon as possible. Also let us know that you’ve done this so we can keep track of it!
- Further detail of how the information is given to the ATO in the coming days. Once we have a handle on how the scheme will be administered, we will be in touch.
As we gather more detail on this program, we’ll be forthcoming with more information. In the meantime, don’t hesitate to reach out to our team if you have any immediate questions.