Third stimulus package – the “JobKeeper Payment” package
The Federal Government has this week announced a massive $130 billion extension to their Covid-19 stimulus packages. This announcement offers hope to both businesses and employees but at this stage there are only limited details available about it. Below are some links with implications for businesses, links to the Government websites and fact sheets on this, some FAQs of common questions that we are being asked and finally a link to the new Covid-19 section on our website.
JobKeeper raises hope but also a lot of questions
Yesterday Michael Crocker, Australian Tax Leader at Chartered Accountants Australia and New Zealand, made a speech where he said amongst other things that “Centrelink queues are to some extent being diverted to employer payroll departments” and “Although the ATO has established a site where employers can now lodge an expression of interest, details about employer eligibility, the delivery process and compliance obligations are still a work-in-progress. The ATO can’t pay a cent without legislation being passed.”
He recommends that “Employers who think they’re eligible should send a short email to employees indicating that JobKeeper entitlements are being explored, and decisions will be made as more information comes to hand.”
Government websites and fact sheets
The Federal government’s business website for information on this is Coronavirus Information and Support for Business.
Frequently asked questions by clients
1. Do I qualify?
Businesses need to have a turnover of less than $1 billion and their turnover has reduced by more than 30 percent relative to a comparable period a year ago. There is no more specific detail than this on what the comparable period has to be. If your March 2020 sales income is less than 70% of your March 2019 sales or if you estimate your April 2020 sales will be less than 70% of your April 2020 sales we would recommend that you register for the JobKeeper Payment.
2. What do I need to do now?
At the moment, the only thing businesses can do is to register their interest on the ATO website specially created for this purpose. The ATO will send you more information on the JobKeeper Payment when they have it.
3. What will I get?
The Government will provide $1,500 per fortnight (before tax) per employee for up to 6 months. This applies to any full time, part-time or casual employee (employed on a regular basis for more than 12 months) who were employed at 1 March 2020 (even if they have been stood down after that).
4. What is the timing of it?
The subsidy starts from 30 March 2020 but the first payments won’t be paid until the start of May 2020. Therefore businesses have until the end of April 2020 to register.
5. Will I get both the PAYGW credits and this JobKeeper Payment?
Yes if you are eligible.
6. What happens if an employee has two jobs?
Where employees have multiple employers, only one of the employers will be allowed to received the JobKeeper Payment. The employee will have to notify the employer if that employer is their primary employer. The primary employer will be able to claim the JobKeeper Payment.
7. What do I pay the employees if their normal wages are above or below this $1,500 a fortnight?
The JobKeeper Payment is a wage subsidy and may not cover the entire cost of the employee’s wage. For any employee earning more than $1,500 per fortnight, they will continue to receive the higher wage. It is a different scenario for employees earning less than $1,500 a fortnight. They will be paid their normal wage plus the employer will be required to top up the payment so that they receive $1,500 per fortnight before tax. A business is not allowed to profit from the JobKeeper Payment and keep the difference.
8. Do the employees have to work for this $1,500?
No they don’t. This JobKeeper Payment can be received and paid for employees who have been stood down from the business. If the employee has already applied for the JobSeeker Payment from Services Australia (formerly Department of Human Services) they will need to notify Services Australia that their employer has applied for the JobKeeper Payment on their behalf and they may not be eligible for income support from Services Australia.
9. What if the employees have already applied for Job Seeker from Services Australia?
LPC website – Covid-19 resources
With the overload of information (and mis-information on social media) coupled with the constantly changing environment surrounding Covid-19, we are wanting to help and support you however we can.
With this in mind, we have now added a Covid-19 Resources section to our website which contains information on Business Advice, Government Help, Latest Updates and Wellbeing. We will also be sending out a weekly newsletter that will provide you with a snapshot summary of the week’s events (The Weekly Digest).
We will be watching this constantly changing situation, especially in relation to government packages for businesses and employees and will be regularly updating this section to keep you informed, so please feel free to bookmark it. We will also work to add more resources for you every week.
Get in touch with us to find out more.