JOBKEEPER PAYMENT TO KEEP EMPLOYERS AND EMPLOYEES TOGETHER
SUMMARY
Payment of $1,500 per fortnight for eligible businesses to pass onto employees.
POLICY
The Government has realised the link between employer and employee is critical, and it will be much harder to get the economy going if people have left businesses.
The Government has introduced a Jobkeeper payment of $1,500 per fortnight for each employee that is paid to businesses, and then passed onto employees. This is a higher amount than the Jobseeker payment, which is up to $1,115 per fortnight. To be eligible a person must have been an employee as at 01Mar20, and a person can only receive the payment from one employer (ie a person can’t receive multiple payments).
This payment of $1,500 per employee is taxable and payable for six months from 30 March 2020. Payments will be made to the employer monthly in arrears by the ATO. However, for the month of April, the Commissioner can make an advance payment. The first payments will be received in the first week of May.
The business or employer must meet the following conditions:
Eligible employers include businesses structured through companies, partnerships, trusts and sole traders. Not for profit entities, including charities, will also be eligible.
The business must experience a drop in earnings, relative to the same period 12 months ago. Note that the earnings may not have dropped for some businesses in the first month, and they can apply in a subsequent month.
Business with revenue of less than $1 billion: sales need to drop by at least 30 per cent.
Business with revenue greater than $1 billion: sales need to drop by at least 50 per cent
Employers are required by law to pass the payment onto employees.
The employer must keep the employee on the books, even if the business goes into hibernation and the employee doesn’t actually do work.
Self employed people are also eligible.
The usual 9.5% superannuation is not paid on the $1,500pfn as it is a Government payment, however, if an employer tops this the employer can decide if they pay superannuation on this top up amount.
Second, the individual or employee must meet the following conditions:
The employee must be an Australian citizen or meet visa conditions detailed here, and at least 16 years of age.
The employee can be a full time worker, part time employee, sole trader or casual.
Employees can only claim the payment with one employer (called the primary employer).
The employee must have been employed by the business on 1st March 2020. A casual employee must have been employed on a regular basis for 12 months as at 1 March 2020.
An employee cannot receive the Jobseeker (formally Newstart) and Jobkeeper payment at the same time.
If employees receive other income support payments they must notify Centrelink they are receiving Jobkeeper.
Other important points to note:
What if I lost my job before the announcement and have already applied for Jobseeker (Newstart)? You must have been employed on 1 March 2020. Your previous employer must then sign up for the program and put you back on their books.
If your employer won’t put you back on the books you can apply for the Jobseeker payment (subject to meeting eligibility).
What happens if I normally earn more than $1,500pfn? The Government does not expect you to take a pay cut and your employer should make up the difference. For example if you normally earned $2,000pfn the Government would pay the first $1,500pfn (through Jobkeeper) and your employer would pay $500pfn (all before tax).
What happens if I normally earn less than $1,500pfn? You employer must pay you at least $1,500pfn (before tax).
What happens if I work more than one job? If you work two or more part time jobs you can only claim Jobkeeper from one employer. This will be classified as your ‘primary’ employer and is generally the one where you claim the tax free threshold. This employer will pay you a minimum of $1,500pfn and work you do in other jobs won’t change your entitlement.
What happens if I am self employed? If you are self employed without employees, and meet eligibility criteria, you can received the payment.
MORE INFORMATION
Refer to the following Treasury pages for more information:
Protecting integrity (09Apr20) - Overview of ATO framework to prevent fraud, double payment and exploitation
Supporting businesses to retain jobs (11Apr20) - eligibility and payment process
Frequently asked questions (11Apr20) - 20 pages of FAQs for employers, employees and self employed
Information for employers (11Apr20)
Information for employees (11Apr20)
HOW TO APPLY
The application is made by the employer through the ATO. The employer receives the money and passes it onto the employee.
The ATO is developing the systems to apply for the payment. At this stage you can register your interest on the ATO website here.