We would like to take this opportunity to update you on the JobKeeper Payment Scheme. Last Wednesday, the Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 was introduced and passed both houses of Parliament. Unfortunately, it did not contain the finer detail of how the JobKeeper Payment Scheme (‘the Scheme’) will operate. What it did was set up a framework including giving the Treasurer the power to make rules, by way of Legislative Instrument, as to how the Scheme will work. These Rules are not currently available as we await the ATO to release them.
The JobKeeper scheme was announced by the Australian Government on 30 March 2020. It’s was part of a third round of stimulus and support to the economy, and follows previous announcements on 12 March 2020 and 22 March 2020. We note that a key condition of accessing the JobKeeper scheme is to demonstrate that your business turnover has fallen or will likely fall by 30% or more (for businesses with an aggregated turnover of less than $1 billion).
Under the JobKeeper scheme, the Government will pay eligible employers a wage subsidy, being a flat payment of $1,500 per fortnight for an estimated 6 million eligible employees. As the name suggests, the scheme is targeted at keeping employees in a job.
As part of employers accessing the JobKeeper subsidy, the employer must satisfy a wage condition or payment for each eligible employee per fortnight. This wage condition is that you must have paid each eligible employee at least $1,500 (pre-tax) during the fortnight you are wishing to claim the JobKeeper payment for. The first fortnight in this scheme commenced on 30 March 2020 and finishes on 12 April 2020, with the final period to start on Monday 14 September 2020 and end on Sunday 27 September 2020.
It appears that If you have not paid the minimum amount to each eligible employee during this period, then the employer will not be eligible for the JobKeeper payment in respect of that employee for the first JobKeeper fortnight. It is possible that where the employer has not paid the required $1,500 (pre-tax) to employees before 12 April 2020, it is hoped that employers will have until the 26 April 2020 to make catch-up payments in respect of this first fortnight period. Clarification and guidance has been sought given the compressed time frame for employers to comply.
More information will be provided as updates are received. To assist in your understanding of the JobKeeper eligibility, we refer you to the Government Link which contains updates as at 11 April 2020. The link provides a summary of JobKeeper Payments for both employers and employees in regards to the current eligibility criteria. We expect further detail to be released by the ATO in the coming days.
Please contact your relevant HTA advisor to discuss how these recent announcements may assist your business ,now and into the future.
As further announcements are made we will update you accordingly.