What is the JobKeeper Payment?
The JobKeeper Payment is a wage subsidy that will be paid through the tax system (i.e., it will be administered by the ATO) to eligible businesses impacted by the Coronavirus. Under the scheme, eligible businesses will receive a payment of $1,500 per fortnight per eligible employee and/or for one eligible business participant (i.e., an eligible sole trader, partner, company director or shareholder or trust beneficiary).
The subsidy will be paid for a maximum period of six months (i.e., from 30 March 2020 up until 27 September 2020). It will be paid to eligible businesses monthly in arrears, with the first payments to employers commencing from the first week of May 2020.
When is an employer eligible for JobKeeper?
An employer will only be eligible to receive a JobKeeper Payment in respect of an 'eligible employee' (refer below) if, at the time of applying:
• for employers with an aggregated annual turnover of $1 billion or less - the employer estimates that their projected GST turnover has fallen (or is likely to fall) by 30% or more; or
• for employers with an aggregated annual turnover of more than $1 billion - the employer estimates that their projected GST turnover has fallen (or is likely to fall) by 50% or more; and
• the employer is not specifically excluded from the scheme (e.g., one that is subject to the Major Bank Levy, one that is in liquidation, etc.).
Where an employer is a charity registered with the Australian Charities and Not-for-profit Commission ('ACNC'), the employer will be eligible for the JobKeeper Scheme if they estimate that their turnover has fallen, or is likely to fall, by 15% or more relative to a comparable period.
Eligible employers must actually elect to participate in the JobKeeper Scheme via an application to the ATO.
There will also be some discretion and tolerance where employers have, in good faith, estimated at least a 30% (or 50%, as the case may be) fall in turnover.
Identifying who is an 'eligible employee'
A business can only claim a JobKeeper Payment in respect of an employee who is an 'eligible employee'.
An 'eligible employee' is an employee who satisfies the following requirements:
(a) The employee is currently employed by the employer (which includes an employee who has been stood down or re-hired after they had already lost their job).
(b) The employee was employed by the employer as at 1 March 2020.
(c) The employee is a full-time or part-time employee, or a long-term casual employee (i.e., one who has been employed by the employer on a regular and systematic basis for longer than 12 months as at 1 March 2020).
(d) The employee was at least 16 years of age on 1 March 2020.
(e) The employee was, on 1 March 2020, either: • a resident of Australia for social security purposes (e.g., an Australia citizen, a holder of a permanent visa or a holder of a protected special category visa); or • a resident of Australia for tax purposes and was a holder of a Subclass 444 (Special Category) visa.
(f) The employee has not given any other employer a nomination notice (refer below).
(g) If the employee is a long-term casual employee – they are not a permanent employee of any other employer.
(h) The employee is not in receipt of a government-funded parental leave pay or dad and partner pay and nor are they fully supported by a workers' compensation scheme.
Additionally, before an entitlement to the JobKeeper Payment arises, the ATO requires an employer to complete a JobKeeper employee nomination notice to notify eligible employees that the employer intends to participate in the scheme, and ask the employees to agree to be nominated and receive payments from them as part of the scheme.
Employers must pay eligible employees at least $1,500 per fortnight.
The minimum $1,500 (before tax) payment requirement will operate as follows:
(a) If an employee has been receiving at least $1,500 in gross salary income per fortnight since 30 March 2020, they will continue to receive their regular income according to their prevailing workplace arrangements. In this case, the JobKeeper Payment will effectively subsidise the first $1,500 of the employee's gross fortnightly salary income.
(b) If an employee has been receiving less than $1,500 in gross salary income per fortnight since 30 March 2020, the employer must pay the employee a 'top-up' payment to ensure the employee has been paid at least $1,500 per fortnight to be eligible to receive the JobKeeper Payment. This means some employees will receive more than their ordinary salary and wages derived from the employer.
(c) If an employee has been stood down without pay after 1 March 2020 their employer must pay the employee a minimum gross fortnightly salary income of $1,500 from 30 March 2020, to be eligible to receive the JobKeeper Payment in respect of the employee.
(d) If an employee was employed on 1 March 2020, has subsequently ceased employment with their employer, and then has been re-engaged by the same employer, the employer must pay the employee a minimum gross fortnightly salary of $1,500 under the JobKeeper Scheme.
The minimum payment must be made by the last day of the fortnight. However, the ATO has already exercised its discretion to allow employers to make the minimum payment for the first two fortnights by the end of April 2020. Going forward, the minimum payment will need to be strictly made by the end of the relevant fortnight.
More flexibility for employers receiving the JobKeeper Payment under the Fair Work Act 2009 Amendments have also been made to the Fair Work Act 2009 to support the practical operation of the JobKeeper Scheme and to facilitate a range of flexible working arrangements designed to support the continued operation of businesses and the ongoing employment of employees.