State and Federal Governments are producing a range of mechanisms to deal with the many implications of the COVID 19 situation.
If you run a business confronting any of the issues outlined below and, after reading this, have any questions, please feel free to contact me.
Supporting Business to Retain Jobs
- Federal government introduces subsidy program called JobKeeper Payment to help businesses affected by COVID19 cover or subsidise employees’ wages costs, so more employees can deeply job and continue to have an income.
- See summary below but the $1500 per employee is a gross subsidy payment, not a cash in hand payment to staff.
- The employer determines if they want to pay superannuation on any additional wage paid beyond the JobKeeper.
- Full detail and example can be found at Government website https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_supporting_businesses_4.pdf.
Jobkeeper Payments – Employers
- Employer to register intention to apply with ATO and determine whether they will experience required turnover decline.
- employers must provide information to ATO on eligible employees – number as it 1 March 2020, those continuing to be employed, though stood down et cetera.
- notify all eligible employees that they are to receive the JobKeeper payment.
- businesses suffering relevant turnover loss can claim $1500 (gross) per fortnight payment per eligible employee from 30 March 2020 for a period of up to 6 months.
- eligibility depends on turnover as follows: –
- turnover less than $1 billion, turnover reduced by more than 30% to comparable period a year ago;
- turnover more than $1 billion, and turnover reduced by more than 50% compared to corresponding period last year; and
- in either case, the business is not subject to Major Bank Levy.
- does not cover contractors as such.
- not for profits including charities and self-employed individuals meeting the turnover tests are eligible.
- employers apply through ATO website.
- eligible employers should receive 1st payments in the 1st week of May.
- employers need to identify eligible employees for JobKeeper payments.
- employers to ensure eligible employees receive at least $1500 per fortnight.
- employer to decide whether to pay superannuation on any additional wage paid because of JobKeeper payments
- businesses with no employees but with an ABN can apply but must provide Tax File number and declaration as to recent business activity.
- Full detail and examples can be found at Government website:- https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employers_0.pdf and https://treasury.gov.au/coronavirus/businesses .
Jobkeeper Payments – Employees
- Employees notified by Employer.
- No action needed by employee unless:-
- If multiple employers, they must tell primary employer.
- Non Australian employees must advise employer of visa status to decide whether they are entitled.
- If employee is receiving income support payments, they must notify Services Australia of new income.
- Employer can claim $1500 per eligible employee for 6 months from March 2020 – it is not tax free.
- Employer to decide on impact on superannuation.
- Some visa holders are not entitled.
- Full and part time employees covers but casual must have worked with particular employer for 12 months.
- Full detail and example can be found at Government website :-https://treasury.gov.au/sites/default/files/2020-03/Fact_sheet_Info_for_Employees_0.pdf .
- If employee stood down, employer to pay a minimum of $1500 per fortnight.
If employee received over $1500 per fortnight normally, the employer is to use the Jobkeeper payment to subsidise employee salary.