If you’re wondering how you will manage the enormous business challenges presented by the COVID-19 crisis, the Australian Government has announced unprecedented assistance to help businesses of all sizes manage their cashflow and retain their employees.
In a $130 billion assistance package announced on 30 March 2020, the government rolled out a six-month wage subsidy scheme designed to help employers retain or rehire their existing employees.
The new JobKeeper Payment of $1,500 a fortnight per employee will be paid to employers to help them, and their employees, survive the current tough trading conditions.
Eligibility for the JobKeeper Payment
The six-month JobKeeper Payment is made through the tax system and is available to small, medium and large businesses, and not-for-profits affected by the COVID-19 crisis.
The fortnightly payment is available regardless of whether your business is still trading, and your employees are working, or you have ceased trading and your employees have been stood down.
To be eligible, a small or medium-sized business with an annual turnover of less than $1 billion must have lost at least 30 per cent of its revenue since 1 March, over a minimum of a month-long period. For large businesses, the drop in revenue must be at least 50 per cent.
JobKeeper Payments can be used to help pay wages for full-time, part-time and long term casual staff employed for at least 12 months. Eligible employees must be aged at least 16 and be an Australian citizen or permanent, special category or Protected Special Category visa holder. Non protected PSC visa holders must have been in Australia for 10 or more years.
Employees made redundant since 1 March are still eligible for the JobKeeper Payment, provided you’re willing to rehire them.
The self-employed and businesses without employees are also eligible to apply.
Impact on employers and employees
The new JobKeeper Payment means many employers will be able to keep valued people on staff and not need to hire and train new employees when business conditions improve.
For employers, it’s important to note you won’t receive the first JobKeeper Payment until the first week of May, but it will be backdated to 30 March 2020. Subsequent payments will be made to you monthly in arrears by the ATO.
For employees, the new JobKeeper Payment replaces the previously announced JobSeeker Payment. If you have already applied for Centrelink support and your employer wants to rehire you, you will move onto the JobKeeper Payment.
Employees will need to inform Centrelink about their new income. You will only be eligible to receive a JobKeeper Payment from one employer, even if you have several jobs.
It’s also worth noting that it will be up to the employer if they want to pay super on any additional wage paid because of the JobKeeper Payment.
Applying for financial assistance
To receive the JobKeeper Payment, employers need to register and apply on the ATO website with information about their decline in turnover.
You will also need to provide information about your eligible employees. The Single Touch Payroll data held by the ATO can be used to pre populate your employee details.
Employers must ensure each of their eligible employees receives at least $1,500 per fortnight before tax, even if they normally earn less than that amount. Eligible employees must be notified that they are receiving the JobKeeper Payment and you will be required to confirm they remain engaged in order to continue receiving the fortnightly wage subsidy.
Employers must also continue providing information to the ATO on a monthly basis, including the number of eligible employees employed.
Businesses without employees also need to register online with the ATO. You must provide an ABN for the business, nominate an individual to receive the payment and their Tax File Number, and provide a declaration on recent business activity. If you are self-employed, you will need to provide a monthly update to the ATO declaring your continued eligibility. Monthly payments will be credited into your bank account.
Call us today if you need help managing your business cashflow or applying for government financial assistance during the current crisis.
Information in this article has been sourced from the Treasury website: https://treasury.gov.au/coronavirus/jobkeeper